Canada tightens mortgage rules to stop housing bubble

SirJosephPorter

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Normally I have very low opinion of Harper and even a lower opinion of Flaherty (he is the one who put Ontario’s economy in the tank, under Mike Harris). However, for once they are doing something right.

Canada is tightening the mortgage rules to prevent another housing bubble.

“The government plans to require all borrowers meet standards for a five-year fixed-rate mortgage, even if they opt for a loan with a lower rate and shorter term,”

“The maximum amounts that can be withdrawn in refinancing a mortgage has been cut to 90% from 95% and a minimum down payment of 20% will be required for government-backed mortgage insurance on properties bought for speculation.”

The housing market has recovered nicely in Canada and currently nobody is anticipating a housing bubble. However, now is the time to take preventive measures.

Hopefully this will prevent another housing bubble from occurring, and when the next housing bubble occurs in USA (and it most certainly will, Americans have a visceral dislike of regulation of any kind), we will be shielded from it here in Canada.

Canada tightens mortgage rules to stop housing bubble
 

countryboy

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Normally I have very low opinion of Harper and even a lower opinion of Flaherty (he is the one who put Ontario’s economy in the tank, under Mike Harris). However, for once they are doing something right.

Canada is tightening the mortgage rules to prevent another housing bubble.

SirJP - What do you mean, "for once?" These astute individuals have steered a course through the recession that is the envy of the world. Their hard work has resulted in Canada being positioned to come out of this worldwide mess, stronger than ever.

Now that you're beginning to see how capable they really are, you might just be subconciously be getting ready to change your vote in the next election, thus supporting these wonderful people on their way to a solid majority and a bright and prosperous future for all of us!

Thank you for your support!
 

SirJosephPorter

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SirJP - What do you mean, "for once?" These astute individuals have steered a course through the recession that is the envy of the world. Their hard work has resulted in Canada being positioned to come out of this worldwide mess, stronger than ever.

Astute nothing. There are two reasons why downturn in Canada was not as severe as that in USA. One was that Liberals had left the economy of the country in very good shape; Harper inherited a robust economy, with healthy surpluses.

While Harper did indeed follow Bush part of the way, he fortunately did not follow Bush all the way. Harper did enact huge tax cuts mostly favoring the rich, same as Bush did. However, while Bush ranked up sky high deficits while doing so, Harper only got rid of Liberal surplus, he did not put the country into hock like Bush did with USA.

So Canadian economy was in a much better position to weather the storm, no thanks to Harper. Harper made the matters a little worse (blowing away all the surplus for tax cuts for the rich), but not a whole lot worse as Bush did.

Another reason we had a relatively mild downturn was the robust, sound economic state of Canadian banks. The government did not need to spend any money bailing out banks (they had to spend hundreds of billions of dollars in USA).

So the downturn is much milder in Canada compared to USA, no thanks to Harper. It was due to the hard work done by Liberals and Canadian banks.

Harper gets credit only to the extent that he did not make huge blunders like Bush did, he only made small mistakes (like blowing away the surplus). Other than that one mistake (but as a Conservative, I suppose he has to pander to the rich, that is the nature of the beast), Harper pretty much followed in liberal footsteps.
 

JLM

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SirJP - What do you mean, "for once?" These astute individuals have steered a course through the recession that is the envy of the world. Their hard work has resulted in Canada being positioned to come out of this worldwide mess, stronger than ever.

Now that you're beginning to see how capable they really are, you might just be subconciously be getting ready to change your vote in the next election, thus supporting these wonderful people on their way to a solid majority and a bright and prosperous future for all of us!

Thank you for your support!

Not so fast CB- he may be running a fever, someone should check his temperature. I've never had any problem with Flaherty, always talks common sense from what I can see. However S.J. is right in tightening up the rules. Buying a house with nothing or 5% down makes no sense.

Personally I would like to see at least 10% down and 6 months worth of mortgage payments in a trust account, just to protect against things like sickness or loss of job. It's just less stressful for everyone concerned.
 

JLM

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"Harper gets credit only to the extent that he did not make huge blunders like Bush did, he only made small mistakes (like blowing away the surplus)"- THAT is a very dumb statement. One of the main reasons to run a surplus is to have money in the bank for a "rainy day", and a world wide recession counts as a rainy day in my books and that's exactly what Harper used the money for. NOthing wrong with that. Makes a lot more sense than raising taxes and putting the people (who are also in a recession) in a more stressful position. People have a lot more wisdom when it comes to spending money than what the Gov't. has- sensible people anyway.
 

countryboy

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Not so fast CB- he may be running a fever, someone should check his temperature. I've never had any problem with Flaherty, always talks common sense from what I can see. However S.J. is right in tightening up the rules. Buying a house with nothing or 5% down makes no sense.

Personally I would like to see at least 10% down and 6 months worth of mortgage payments in a trust account, just to protect against things like sickness or loss of job. It's just less stressful for everyone concerned.

I think you're right on the tightening up of rules. What you suggest would be less stressful but would also "cool off" some of the stupid speculation (gambling) that throws things out of whack in a hurry.
 

countryboy

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"Harper gets credit only to the extent that he did not make huge blunders like Bush did, he only made small mistakes (like blowing away the surplus)"- THAT is a very dumb statement. One of the main reasons to run a surplus is to have money in the bank for a "rainy day", and a world wide recession counts as a rainy day in my books and that's exactly what Harper used the money for. NOthing wrong with that. Makes a lot more sense than raising taxes and putting the people (who are also in a recession) in a more stressful position. People have a lot more wisdom when it comes to spending money than what the Gov't. has- sensible people anyway.

I seem to recall the Libs and NDP screaming their heads off about the government "doing something" to cushion the effects of the economic downturn, so they did. I guess "some people" don't agree with the Libs or the NDP on this, as they seem to think nothing should have been done...no money spent to help the people. A stance like that is more heartless than a fundamentalist, far-right Christian extremist. Surprising, really.

And yeah, you're right on the people having more wisdom than any government when it comes to spending money. I guess that's why I've always been in favour of having less of it (government, that is)... :lol:
 

SirJosephPorter

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"Harper gets credit only to the extent that he did not make huge blunders like Bush did, he only made small mistakes (like blowing away the surplus)"- THAT is a very dumb statement. One of the main reasons to run a surplus is to have money in the bank for a "rainy day", and a world wide recession counts as a rainy day in my books and that's exactly what Harper used the money for. NOthing wrong with that. Makes a lot more sense than raising taxes and putting the people (who are also in a recession) in a more stressful position. People have a lot more wisdom when it comes to spending money than what the Gov't. has- sensible people anyway.

Harper blew away all the surplus long before the meltdown appeared, JLM. Just as one of the first acts of Bush when he came to power was huge tax cuts racking up huge deficits, one of the first acts of Harper was huge tax cuts (mostly favoring the rich) wiping out all the surplus.

Then when the downturn hit us, Harper had nowhere to go but to rack up huge deficits, the largest in Canadian history. If he had continued with the healthy surplus which he inherited, the deficit would be much smaller than it is today.

Harper giving tax cuts mainly to the rich and blowing away all the surplus had nothing to do with the economic meltdown, it happened long before that.

And you may think that Flaherty is the greatest economist who ever lived, in my opinion, he is the bungler of the worst kind, a total moron. He was in Mike Harris’ cabinet, and he was responsible for Ontario running a huge, 6 billion $ deficit (which Tories lied about during the election campaign, they claimed it was only 2 billion).

But then most conservatives don’t think that budget deficit is a big deal anyway. Budget deficit normally doesn’t bother conservatives. If you belong to that school, no wonder you look at Flaherty with awe and admiration.
 

JLM

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Harper blew away all the surplus long before the meltdown appeared, JLM. Just as one of the first acts of Bush when he came to power was huge tax cuts racking up huge deficits, one of the first acts of Harper was huge tax cuts (mostly favoring the rich) wiping out all the surplus.

Then when the downturn hit us, Harper had nowhere to go but to rack up huge deficits, the largest in Canadian history. If he had continued with the healthy surplus which he inherited, the deficit would be much smaller than it is today.

Harper giving tax cuts mainly to the rich and blowing away all the surplus had nothing to do with the economic meltdown, it happened long before that.

And you may think that Flaherty is the greatest economist who ever lived, in my opinion, he is the bungler of the worst kind, a total moron. He was in Mike Harris’ cabinet, and he was responsible for Ontario running a huge, 6 billion $ deficit (which Tories lied about during the election campaign, they claimed it was only 2 billion).

But then most conservatives don’t think that budget deficit is a big deal anyway. Budget deficit normally doesn’t bother conservatives. If you belong to that school, no wonder you look at Flaherty with awe and admiration.

I know very little about Mike Harris, but I do know for a fact his predesessor Bob Rae put the province in terrible straits, so I doubt if Harris deserves all the blame.
 

SirJosephPorter

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I seem to recall the Libs and NDP screaming their heads off about the government "doing something" to cushion the effects of the economic downturn, so they did. I guess "some people" don't agree with the Libs or the NDP on this, as they seem to think nothing should have been done...no money spent to help the people. A stance like that is more heartless than a fundamentalist, far-right Christian extremist. Surprising, really.

Yes, it is comforting to rewrite history to suit one’s own side, isn’t it? Harper blowing away all the surplus had nothing whatever to do with Libs or with NDP. Harper did that long before there was even an inkling of the economic meltdown.

As soon as Harper came to power, one of his first acts was tax cuts mainly for the rich, and he brought down the budget surplus from over10 billion to under 1 billion. Liberals opposed the tax cuts, especially the GST cuts (which disproportionately favors the rich).

Later on when economic downturn came, both Libs and NDP were demanding that something be done. But nobody was demanding that Harper give tax cuts to the rich and blow away all the surplus (well, Conservatives were demanding that, as I said before, Conservatives are not really bothered by budget deficits).

So Harper giving tax cuts to the rich and blowing away all the surplus, you most certainly cannot blame that on NDP or the Libs.
 
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SirJosephPorter

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I know very little about Mike Harris, but I do know for a fact his predesessor Bob Rae put the province in terrible straits, so I doubt if Harris deserves all the blame.

Quite so. I suppose it is the same logic whereby Bush supporters blame the dot com meltdown (2001 - 2002) on Clinton and the current meltdown on Obama (and on Clinton, Carter and Johnson).

After almost two terms in office by Mike Harris, Ontario had a deficit of 6 billion $. Now, no doubt to you that was the fault of Bob Rae (is a conservative really responsible for anything bad?), but to me (and to most Ontarians), it was Mike Harris (and yoru hero, Flaherty) that were to blame.
 

Liberalman

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Here we go again another Conservative effort in futility.

The banks are the problem but the government will not address that issue.

The banks are only paying 2% to 3% for savings, which is ridiculous meanwhile they are making lots of money on credit card interest and ATM service fees and all the other service fees while using our money and they are paying very little.

The banks should be paying at least 8% to 9% on savings and term deposits.

It’s time to raise the interest rates so people can make more money on savings.

Since Canada is more stable, the banks should start to raise the interest rates so they can take advantage of foreign money coming into the country.

With new money coming into the country means new money for investments in new businesses that creates new jobs so the people can pay their mortgages and for the ones that can’t then it’s time to sell and downgrade.

Except for resource investors most other investors are bypassing Canada which means that this country losing growth opportunities.
 

JLM

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"The banks should be paying at least 8% to 9% on savings and term deposits."-

Um huh, and when that happens you can kiss Wall St. and the TSX good bye. No idiot is going to put their money where there is any risk.
 

Tonington

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"The banks should be paying at least 8% to 9% on savings and term deposits."-

Um huh, and when that happens you can kiss Wall St. and the TSX good bye. No idiot is going to put their money where there is any risk.

Could you expand on that JLM? Do you mean nobody would invest in the stock markets when interest bearing bank accounts are paying 8%? I'm pretty sure there would still be assets in the market that would yield better risk adjusted returns.

It's equally as important (I think) to have diverse exposure to risk, as for a diverse portfolio.
 

JLM

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Could you expand on that JLM? Do you mean nobody would invest in the stock markets when interest bearing bank accounts are paying 8%? I'm pretty sure there would still be assets in the market that would yield better risk adjusted returns.

It's equally as important (I think) to have diverse exposure to risk, as for a diverse portfolio.

That's EXACTLY what I meant, shouldn't need explaining. Sure there will always be a few greedy bastards who aren't satifsfied with 8 or 9%. But not enough to support Wall st. and BAy St.
 

Tonington

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That's EXACTLY what I meant, shouldn't need explaining. Sure there will always be a few greedy bastards who aren't satifsfied with 8 or 9%. But not enough to support Wall st. and BAy St.

Financial markets would get along. I doubt everyone is going to throw all their investments into interest bearing bank accounts..
 

JLM

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Financial markets would get along. I doubt everyone is going to throw all their investments into interest bearing bank accounts..

Every wise investor (well, maybe not Warren Buffet) puts some money into fixed income, most people roughly 50/50, so if savings accounts are paying 8% you can bet the ratio is going to rise dramatically. If Savings Accounts are paying 8% mortgages are going to be costing us 10%, and bang there goes inflation into the stratosphere.
 

Avro

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SirJP - What do you mean, "for once?" These astute individuals have steered a course through the recession that is the envy of the world. Their hard work has resulted in Canada being positioned to come out of this worldwide mess, stronger than ever.

Now that you're beginning to see how capable they really are, you might just be subconciously be getting ready to change your vote in the next election, thus supporting these wonderful people on their way to a solid majority and a bright and prosperous future for all of us!

Thank you for your support!

Wow, what a pile of BS that is.:roll:

Tell me, what exactly did they do that makes them the envy of the world when it comes to the financial crisis?
 

Avro

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That's EXACTLY what I meant, shouldn't need explaining. Sure there will always be a few greedy bastards who aren't satifsfied with 8 or 9%. But not enough to support Wall st. and BAy St.

:lol:

You say this like it's true.
 

Avro

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"Harper gets credit only to the extent that he did not make huge blunders like Bush did, he only made small mistakes (like blowing away the surplus)"- THAT is a very dumb statement. One of the main reasons to run a surplus is to have money in the bank for a "rainy day", and a world wide recession counts as a rainy day in my books and that's exactly what Harper used the money for. NOthing wrong with that. Makes a lot more sense than raising taxes and putting the people (who are also in a recession) in a more stressful position. People have a lot more wisdom when it comes to spending money than what the Gov't. has- sensible people anyway.

Again wrong, the only reason to run a surplus is to pay off debt.