Jerry J. Fortin Posted January 5, 2009 Report Share Posted January 5, 2009 Disagree on the exemption for mortgage interest.It provides a tax break only to property owners and is discriminatory in that sense. It is also factored into calculations for qualification for obtaining mortgages in the US, which helps create the porperty bubbles we are watching bursting. You don't actually need it, because there is the Smith Manuever sanctioned by the court system. Quote Link to comment Share on other sites More sharing options...
Progressive Tory Posted January 5, 2009 Author Report Share Posted January 5, 2009 Disagree on the exemption for mortgage interest.It provides a tax break only to property owners and is discriminatory in that sense. It is also factored into calculations for qualification for obtaining mortgages in the US, which helps create the porperty bubbles we are watching bursting. What if it was incorporated into a Tax Credit? In Ontario we fill out a separate form for Ontario Tax Credits that include a section for 'Property'. Right now it is only property taxes or rent that are eligible, and then you have to deduct a portion of your income, so most people don't really benefit. What if a federal tax credit included rental payments and/or mortgage interest (only on the dwelling where you reside)? Would you agree with that? Quote Link to comment Share on other sites More sharing options...
Jerry J. Fortin Posted January 5, 2009 Report Share Posted January 5, 2009 I would! Simply because I think it would help with bolstering the market. Lots of jobs in construction, and a lot of little guy capital tied up in real estate. In my view the thing to do is spur consumer spending and the way to do that is increasing disposable income. Take a freaking source deduction and realize a raise every payday. Quote Link to comment Share on other sites More sharing options...
Moonbox Posted January 7, 2009 Report Share Posted January 7, 2009 I would! Simply because I think it would help with bolstering the market. Lots of jobs in construction, and a lot of little guy capital tied up in real estate. In my view the thing to do is spur consumer spending and the way to do that is increasing disposable income. Take a freaking source deduction and realize a raise every payday. Yes...trying to bolster the economy by investing in a housing market already well over capacity seems like a really good idea to me. While we're at it let's build some new Chevrolet and GM plants here. Quote Link to comment Share on other sites More sharing options...
fellowtraveller Posted January 7, 2009 Report Share Posted January 7, 2009 Would you agree with that? If your intent is to provide a tax cut, there is no need for all the dog and pony show. Just cut income tax, federal and /or provincial. Quote Link to comment Share on other sites More sharing options...
Jerry J. Fortin Posted January 7, 2009 Report Share Posted January 7, 2009 Yes...trying to bolster the economy by investing in a housing market already well over capacity seems like a really good idea to me. While we're at it let's build some new Chevrolet and GM plants here. Over capacity? You must be joking! What of the homeless folks, and all of the folks who rent because they can't afford to buy? Your view is very short term and fixed upon your own specific situation. You most likely either own your home outright as in are mortgage free or choose to rent instead of buying for you own reasons. Quote Link to comment Share on other sites More sharing options...
85RZ500 Posted January 7, 2009 Report Share Posted January 7, 2009 Baloney, and dangerous baloney at that. 'Hey. lets get the sheep stampeding for no good reason"Here is the key "Those sources estimated that 10 per cent of the mortgages, worth about $10-billion, were taken out with no money down." Those are the mortgages at risk, and they won't be at risk until they come due, which will be for the most part in about two to five years, since they were available and popular only for a couple oif years and nearly all will be at a five year term. Taking a mortgage over 40 years is no more risky than taking one for 25 years, in neither case do you pay off any prinicpal for many years. The risk is the same, essentially. People who get 40 year mortages must qualify within strict CMHC guidelines, No qualify, no mortgage, same as always. You still need good income and good credit. The length of the amortization has nothing to do with either of those qualifying factors. More deception: GE has been in the mortgage insurance business as a competitor to CMHC for many years. They have the well earned reputationof being cherrypickers: they are even more strict than CMHC about taking on mortgages. If anything is shaky about your application, they are not interested. The people at risk are those who have no equity by taking zero down mortages, and their risk will come when they renew, which for the majority will be in two to five years. Of course, not all or even the majority will default. This also assumes that property values will be lower in that time frame, nwhich is far from certaion. The defaults will be some portion of the $10 billion, which is negligible in the grand scheme. LOL, Baloney! The mortgages at risk are the fools who have bought houses in the past 3-4 yrs. The ones with the CMHC/GE insured hi-ratio mortgages. Property values here have justdropped 11%, dosen't take much imagination to see that these folks are upside down on their mortgages. Then there is job loss, and the increased costs of consumables brought on by increased transportation costs, in turn brought on by the high cost of fuel. There are dark clouds brewing. Quote Link to comment Share on other sites More sharing options...
Jerry J. Fortin Posted January 7, 2009 Report Share Posted January 7, 2009 LOL, Baloney! The mortgages at risk are the fools who have bought houses in the past 3-4 yrs. The ones with the CMHC/GE insured hi-ratio mortgages. Property values here have justdropped 11%, dosen't take much imagination to see that these folks are upside down on their mortgages. Then there is job loss, and the increased costs of consumables brought on by increased transportation costs, in turn brought on by the high cost of fuel. There are dark clouds brewing. You really think so? Quote Link to comment Share on other sites More sharing options...
Progressive Tory Posted January 7, 2009 Author Report Share Posted January 7, 2009 I know that high-risk mortgages require default insurance, but am still concerned that American firms who have been allowed to benefit from that insurance, backed by our own taxdollars. Especailly AIG. http://online.wsj.com/article/SB1221565619...l_page_campaign 2008_mostpop It was too high a risk and Flaherty's recent action to stop them is like locking the barn door after the horse got out. The gatekeeper has failed. Quote Link to comment Share on other sites More sharing options...
Wilber Posted January 7, 2009 Report Share Posted January 7, 2009 LOL, Baloney! The mortgages at risk are the fools who have bought houses in the past 3-4 yrs. The ones with the CMHC/GE insured hi-ratio mortgages. Property values here have justdropped 11%, dosen't take much imagination to see that these folks are upside down on their mortgages. Then there is job loss, and the increased costs of consumables brought on by increased transportation costs, in turn brought on by the high cost of fuel. There are dark clouds brewing. It doesn't really matter when you bought a house but whether you can afford it. Booms in residential property values are usually accompanied by high rents and a shortage of decent rental properties. People need places to live. Will you be able to make the payments if interest rates have increased a couple of percent when you go to renew? Will you be able to afford ever increasing utility and property tax rates? Can you afford to maintain it? Things to seriously consider before you buy. Fellowtraveller is right when he says a 40 year amortization should be no riskier than a 20 year as long as the qualifications are the same but of course in many cases they weren't. Zero down mortgages are inherently risky no matter what the owners ability to pay. If they have no equity of their own in the place, it is little more than rent and the incentive to walk away if prices drop is much greater than if they had to put 40 grand or so of their own money up front to get it in the first place. Quote Link to comment Share on other sites More sharing options...
fellowtraveller Posted January 7, 2009 Report Share Posted January 7, 2009 It doesn't really matter when you bought a house but whether you can afford it. Booms in residential property values are usually accompanied by high rents and a shortage of decent rental properties. People need places to live. Will you be able to make the payments if interest rates have increased a couple of percent when you go to renew? Will you be able to afford ever increasing utility and property tax rates? Can you afford to maintain it? Things to seriously consider before you buy. Fellowtraveller is right when he says a 40 year amortization should be no riskier than a 20 year as long as the qualifications are the same but of course in many cases they weren't. Zero down mortgages are inherently risky no matter what the owners ability to pay. If they have no equity of their own in the place, it is little more than rent and the incentive to walk away if prices drop is much greater than if they had to put 40 grand or so of their own money up front to get it in the first place. The 40 years are riskier for one reason : no equity to weather the ups and downs of the market. That is why they were only around for a couple of years (both zero down and 40 year amort), CMHC recognized that risk and eliminated it. Quote Link to comment Share on other sites More sharing options...
fellowtraveller Posted January 7, 2009 Report Share Posted January 7, 2009 LOL, Baloney! The mortgages at risk are the fools who have bought houses in the past 3-4 yrs. The ones with the CMHC/GE insured hi-ratio mortgages. Property values here have justdropped 11%, dosen't take much imagination to see that these folks are upside down on their mortgages. Then there is job loss, and the increased costs of consumables brought on by increased transportation costs, in turn brought on by the high cost of fuel. There are dark clouds brewing. Nearly all first time buyers have CMHC insured mortgages, which now means anything between 80% and 95%. It was ever so, nobody can save that much to get started in good times or bad. If you aren't CMHC insured, that means you have at elast 20% equity in your home. There are no other alternatives. Either way, the banks and CMHC are sheltered and relatively safe. And it varies from marklet to market, if you bought a house here before May 2007 with or without a deposit, you have equity. If you bought since then, maybe not, but if you are on CMHC your mortgage won't come up for renewal for 3 1/2 to 5 years from today. If youb are not on CMHC, you had equity from the very start. You'd have us running around like chickens with their heads cut off.......... The rest of your post is meaningless in the context of this thread. Quote Link to comment Share on other sites More sharing options...
Wilber Posted January 7, 2009 Report Share Posted January 7, 2009 The 40 years are riskier for one reason : no equity to weather the ups and downs of the market. That is why they were only around for a couple of years (both zero down and 40 year amort), CMHC recognized that risk and eliminated it. Exactly, the risk isn't the term itself but the reason the term was established. If the value of a house doesn't go up in 40 years, that is probably the least of our financial problems. Quote Link to comment Share on other sites More sharing options...
White Doors Posted January 7, 2009 Report Share Posted January 7, 2009 (edited) Nearly all first time buyers have CMHC insured mortgages, which now means anything between 80% and 95%. It was ever so, nobody can save that much to get started in good times or bad. If you aren't CMHC insured, that means you have at elast 20% equity in your home. There are no other alternatives. Either way, the banks and CMHC are sheltered and relatively safe. And it varies from marklet to market, if you bought a house here before May 2007 with or without a deposit, you have equity. If you bought since then, maybe not, but if you are on CMHC your mortgage won't come up for renewal for 3 1/2 to 5 years from today. If youb are not on CMHC, you had equity from the very start. You'd have us running around like chickens with their heads cut off.......... The rest of your post is meaningless in the context of this thread. They are the jealous rantings of an insecure renter. Edited January 7, 2009 by White Doors Quote Link to comment Share on other sites More sharing options...
Shady Posted January 7, 2009 Report Share Posted January 7, 2009 Well, we're living in the aftermath of the private sector solution and we're in a world wide recession. Now you know the lesser of two evils. Nope. What were seeing is the result of Government interfering in private sector economics. Government forcing banks to loan money to people who didn't qualify for loans isn't part of free markets. What were actually seeing is the negative consequences of so-called good intentions, and so-called affordable housing. Thank you Chuck Schumer, thank you Chris Dodd, thank you Barney Frank. Quote Link to comment Share on other sites More sharing options...
Vancouver King Posted January 7, 2009 Report Share Posted January 7, 2009 Nope. What were seeing is the result of Government interfering in private sector economics. Government forcing banks to loan money to people who didn't qualify for loans isn't part of free markets. What were actually seeing is the negative consequences of so-called good intentions, and so-called affordable housing. Thank you Chuck Schumer, thank you Chris Dodd, thank you Barney Frank. What we are seeing is the logical outcome of conservative govts removing all meaningful oversight to banks creating lucrative but poisoned mortgage-related financial instruments, packaging and reselling these high risk loans as sound investments thoughout the world financial system. Harper & Co., again emulating Bush Republicans, encouraged - even guaranteed - this type of predatory mortgage lending by thowing open the border to the same con artists. Quote Link to comment Share on other sites More sharing options...
blueblood Posted January 7, 2009 Report Share Posted January 7, 2009 What we are seeing is the logical outcome of conservative govts removing all meaningful oversight to banks creating lucrative but poisoned mortgage-related financial instruments, packaging and reselling these high risk loans as sound investments thoughout the world financial system. Harper & Co., again emulating Bush Republicans, encouraged - even guaranteed - this type of predatory mortgage lending by thowing open the border to the same con artists. By that logic every single Dragon in the Den would be forking out money to every far fetched pitch on the show. If we lend out money to everybody, we will get really rich for sure . No conservative in their right mind would take a risk on skids trying to buy a 300K house, they can live in crap appartments like the rest of them. Quote Link to comment Share on other sites More sharing options...
85RZ500 Posted January 8, 2009 Report Share Posted January 8, 2009 Nearly all first time buyers have CMHC insured mortgages, which now means anything between 80% and 95%. It was ever so, nobody can save that much to get started in good times or bad. If you aren't CMHC insured, that means you have at elast 20% equity in your home. There are no other alternatives. Either way, the banks and CMHC are sheltered and relatively safe. And it varies from marklet to market, if you bought a house here before May 2007 with or without a deposit, you have equity. If you bought since then, maybe not, but if you are on CMHC your mortgage won't come up for renewal for 3 1/2 to 5 years from today. If youb are not on CMHC, you had equity from the very start. You'd have us running around like chickens with their heads cut off.......... The rest of your post is meaningless in the context of this thread. "It was ever so"? Huh? I've been retired for a while but previously spent over twenty years in the mortgage biz. You had to have 25% down to have a conventional mortgage. Think about it you buy a house for say $200K, put 5% 0r $10 K down. Now add the ins premium and the costs to close. How many years do we really have to go back to show that someone has built equity in the home? I said 3-4 yrs, just a guess but there's a lot of folks right now and more to come that are upside down on their mortgages. The 11% drop in values(in this area) is just a start. Then there's the folks who've bought today with occupancy 10-12 months from now. Quote Link to comment Share on other sites More sharing options...
Wilber Posted January 8, 2009 Report Share Posted January 8, 2009 What we are seeing is the logical outcome of conservative govts removing all meaningful oversight to banks creating lucrative but poisoned mortgage-related financial instruments, packaging and reselling these high risk loans as sound investments thoughout the world financial system. Harper & Co., again emulating Bush Republicans, encouraged - even guaranteed - this type of predatory mortgage lending by thowing open the border to the same con artists. I'm having some difficulty with the "conservative govts" aspect when Democrat governments in the US were at least as culpable when in comes to encouraging lending to those who couldn't afford it. European banks have been much harder hit by this crisis than Canadian banks and they are regulated by more socialist governments in the main. While Canadian banks haven't been completely immune they are still among the best capitalized in the world. Quote Link to comment Share on other sites More sharing options...
Vancouver King Posted January 8, 2009 Report Share Posted January 8, 2009 I'm having some difficulty with the "conservative govts" aspect when Democrat governments in the US were at least as culpable when in comes to encouraging lending to those who couldn't afford it. From Carter forward all administrations placed high priority on continuing the American dream - home ownership for all. This was not the issue that has America's economy on its knees. The securitization of sub-prime mortgages by investment banks and their toxic global spread is the problem - instruments created and imploded on Bush Republican watches. Where was the oversight? Quote Link to comment Share on other sites More sharing options...
Wilber Posted January 8, 2009 Report Share Posted January 8, 2009 From Carter forward all administrations placed high priority on continuing the American dream - home ownership for all. This was not the issue that has America's economy on its knees.The securitization of sub-prime mortgages by investment banks and their toxic global spread is the problem - instruments created and imploded on Bush Republican watches. Where was the oversight? Home ownership for all is an impossibility for starters. Unless government directly subsidizes certain designated housing for people who would not otherwise be able to do so in the open market, all it results in is inflated prices and the lending of money to people who should not be borrowing it and quite possibly will not be able to pay it back. Sure regulators should have been more vigilant, but no one was holding a gun to the heads of the foreign institutions which bought the stuff. Where was the oversight in the UK and other European countries who's banks got hammered? You should be happy that ours came out relatively unscathed. Even though some of our major banks have taken hits to a degree, all of them are profitable and in no danger of failing. In fact, their strong financial position may be putting them in a position to acquire US assets at bargain prices. Quote Link to comment Share on other sites More sharing options...
Shady Posted January 8, 2009 Report Share Posted January 8, 2009 What we are seeing is the logical outcome of conservative govts removing all meaningful oversight to banks creating lucrative but poisoned mortgage-related financial instruments, packaging and reselling these high risk loans as sound investments thoughout the world financial system. Name specific oversight that was removed by Bush and Republicans in the last several years. I dare you. And bending the rules in favour of the poor sounds like such a Republican ideal doesn't it? Sorry, but this financial meltdown has liberal finger prints all over it. Forcing banks to lend money to people who don't qualify, isn't a free market concept, and isn't a conservative concept either. The global economy has been severely screwed up, thanks to bleeding heart liberals and their so-called good intentions related to so-called 'affordable housing.' Yeah, it's been really affordable hasn't it? We've just had to have 2 huge bailouts in America, and recession worldwide. So much for 'affordable.' Quote Link to comment Share on other sites More sharing options...
Vancouver King Posted January 9, 2009 Report Share Posted January 9, 2009 Name specific oversight that was removed by Bush and Republicans in the last several years. I dare you. And bending the rules in favour of the poor sounds like such a Republican ideal doesn't it? They removed the oversight that should have prevented packaged sub-prime mortgages from being flogged as investment grade securities. Without regulation and carte blanche from credit granting agencies, Wall Street ran amock, creating financial instruments that Warren Buffett described as "weapons of mass financial destruction". Bending the rules in favor of the poor? Nonsense. Retail mortgage merchants, and in turn Wall St. investment bankers, lined their pockets with exorbitant mortgage rates and fees directed at the most vulnerable in the housing market. From, How It All Began, by Sinclair Stewart and Paul Waldie, writing for the Globe & Mail: "One judge later said the [sales] presentation by First Financial "was so well performed that borrowers had no idea they were being charged points and other fees and costs averaging 11% above the amount they thought they agreed to borrow". "While most banks were lucky to make $4,000 in fees on a $100,000 loan, First Alliance pocketed as much as $20,000, according to state regulators." Yup, this was a real bonanza for the poor. Quote Link to comment Share on other sites More sharing options...
bush_cheney2004 Posted January 9, 2009 Report Share Posted January 9, 2009 (edited) The securitization of sub-prime mortgages by investment banks and their toxic global spread is the problem - instruments created and imploded on Bush Republican watches. Where was the oversight? How would the Americans exercise such global "oversight"? Even if they did, it wouldn't have mattered. The Enron bust also happened on "Bush's watch". Edited January 9, 2009 by bush_cheney2004 Quote Link to comment Share on other sites More sharing options...
Shady Posted January 9, 2009 Report Share Posted January 9, 2009 They removed the oversight Which oversight? When was it removed? Quote Link to comment Share on other sites More sharing options...
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