Most Canadians say Canada is Broken

[cannuck]

21 minutes ago, Dougie93 said:

Also be aware that in Canada it's not like America ; you can't walk away from your mortgage in Canada, they will pursue to the ends of the earth for the balance.

that is NOT what a mortgage allows.  The concept under British law goes back centuries.  When you write a mortgage, there are two names on the title: the borrower and the lender.  There are only two ways to take the second name off: pay mortgage out and lender goes away, stop paying and borrower goes away - losing equity (if any) as well as the house.   There is no deficiency or surplus payment made to either borrower or lender.  Borrower's name just goes away.

If someone is chasing after a shortfall (or surplus equity), it is NOT a mortgage.

[Dougie93]

3 minutes ago, cannuck said:

that is NOT what a mortgage allows.  The concept under British law goes back centuries.  When you write a mortgage, there are two names on the title: the borrower and the lender.  There are only two ways to take the second name off: pay mortgage out and lender goes away, stop paying and borrower goes away - losing equity (if any) as well as the house.   There is no deficiency or surplus payment made to either borrower or lender.  Borrower's name just goes away.

If someone is chasing after a shortfall (or surplus equity), it is NOT a mortgage.

In most states in America, you can walk away from your mortgage.  You just throw the keys into the house and walk away, they can't pursue you for the balance.

This is not the case in Canada, in Canada they can sue you for the balance, then your wages will be garnished until the balance is paid.

Lots of Canadians buying way more house than they can afford, and there's no easy way out if they can't cover.

Edited December 1, 2019 by Dougie93

[Dougie93]

It's like I don't live in a mansion, it's just me and my wife and two dogs, so we didn't buy a big house, it's a nice house in a nice neighborhood, but it's a modest middle class house.

This house is worth $800,000    How many Canadians can afford that ? 

They can't, but they're buying them right now, because interest rates are being kept artificially low, historical lows, near negative interest rates, 1.75%

[cannuck]

5 minutes ago, Dougie93 said:

In most states in America, you can walk away from your mortgage.  You just throw the keys into the house and walk away, they can't pursue you for the balance.

This is not the case in Canada, in Canada they can sue you for the balance, then you wages will be garnished until the balance is paid.

Lots of Canada buying way more house than they can afford, and there's no easy way out if they can't cover.

Much to my surprise, and I assume as well yours - recovery of deficits in mortgage foreclosures are NOT consistent throughout Canadian and US privinces/states.

file:///C:/Users/User/Downloads/2018CanLIIDocs364.pdf

I am only familiar with what I have seen in Saskatchewan (we once dealth extensively with illegal foreclosures by banks) but did not realize that other provinces and states don't apply similar restrictions.

So: you CAN walk away from your mortgage in some provinces and states, but not all.

[bush_cheney2004]

7 minutes ago, Dougie93 said:

In most states in America, you can walk away from your mortgage.  You just throw the keys into the house and walk away, they can't pursue you for the balance.

 

True, but it is even better than that.   Many lenders will pay for the keys as an incentive to abandon the house without stripping or vandalizing the property.

[Dougie93]

Just now, bush_cheney2004 said:

 

True, but it is even better than that.   Many lenders will pay for the keys as an incentive to abandon the house without stripping or vandalizing the property.

Yeah, just get that angry American out of there before he wrecks the place, God love him. lol

[Dougie93]

3 minutes ago, cannuck said:

So: you CAN walk away from your mortgage in some provinces and states, but not all.

I wouldn't rely on being able to walk away.   Mind you, I paid my mortgage off all at once, thanks to Steve Jobs, so I'm not paying much attention to it anymore.

[cannuck]

3 minutes ago, Dougie93 said:

It's like I don't live in a mansion, it's just me and my wife and two dogs, so we didn't buy a big house, it's a nice house in a nice neighborhood, but it's a modest middle class house.

This house is worth $800,000    How many Canadians can afford that ? 

They can't, but they're buying them right now, because interest rates are being kept artificially low, historical lows, near negative interest rates, 1.75%

I have a business associate/friend who lives in downtown Hogtown.  He had been renting for many years, but decided they needed to own (this was quite a way back the real estate inflation curve).  In his neighbourhood, most were very large prewar brick (3 story) that when sold were knocked down due to the value of the lot (then approach a million).  I asked how he and others of his age +/- from 40) could afford that.  He told me that everyone in his neighbourhood his age that had purchased did so with financial support of some kind from their family.  Every young person I know in Hongcouver tells me the same story.

[Dougie93]

1 minute ago, cannuck said:

I have a business associate/friend who lives in downtown Hogtown.  He had been renting for many years, but decided they needed to own (this was quite a way back the real estate inflation curve).  In his neighbourhood, most were very large prewar brick (3 story) that when sold were knocked down due to the value of the lot (then approach a million).  I asked how he and others of his age +/- from 40) could afford that.  He told me that everyone in his neighbourhood his age that had purchased did so with financial support of some kind from their family.  Every young person I know in Hongcouver tells me the same story.

It's not just in the big cities though, like I live an hour outside of Toronto, and those Toronto prices are here now.

I moved out here and bought for $400,000

I was offered $800,000 for this house, five years later.

At 1.75% mortgage rates, it's a feeding frenzy, even out here in the boonies.

[Dougie93]

But what is the historical average rate, take away the policy stimulus ?  8%

Never mind that my father was paying 22% back in the 1980's,

Just think what happens if it just returns to normal ; 8%

These people are $200  away from bankruptcy, even just a return to normal will break them.

[Dougie93]

Now bear in mind that I am not saying that this global leverage problem is Canada's doing.

This is a world wide addiction to policy stimulus, the ECB is going back into QE simply to stave off a normal correction.

No government anywhere is willing to allow a normal correction, it's clear that the central banks have been captured by political expedience.

But Canadian governments are making it worse for Canadians.  Canada is particularly vulnerable to the slightest shock,

because policy in Canada is pushing Canadians to the brink., when times are good, the shit hasn't even hit the fan yet, and Canadians are already hanging on by their fingernails

That's this Elite Consensus which you can never vote out, they live in la-la-land up in their Ivory Towers, they're running Canadians into the ground, because they are detached from it all.

[Guest ProudConservative]

The unaffordablity in houses will lead to more and more young people living in their parents basements. No one gives a damn about the youth anyways.

[Dougie93]

1 minute ago, ProudConservative said:

The unaffordablity in houses will lead to more and more young people living in their parents basements. No one gives a damn about the youth anyways.

Until there is a massive correction resulting in contagion and the government is broke and can no longer afford the policy stimulus.

Then interest rates will rise, and many of those parents will lose their houses; no more basement for the kids to live in.

[Dougie93]

Don't forget how much of the economy is reliant upon consumer spending.

If the 50% of Canadians who are on the brink default, there goes the spending, and there goes the government revenues with it.

Then the provinces are in trouble, then the feds have to bail them out, then the hard times will be here.

The governments in Canada are driving the prices of everything up, then they are having to blow their wad when times are good to keep Canadians happy.

In the event of global contagion, Canada won't have the means to bail the public out, the government is not going to save them.

It's just a matter of time until there is another massive correction, they come around again, overinflated bull markets don't last forever.

What goes up, will come down, the more you inflate it, the harder it will correct. 

Edited December 1, 2019 by Dougie93

[Zeitgeist]

2 hours ago, Dougie93 said:

It's not so much that people are not sensible, they're just trying to maintain a middle class lifestyle in the face of mounting costs of living incited by the government.

The policies of the governments in Canada are driving the prices of everything up across the board.  Way more so than in other countries.

Canada is one of the most expensive countries in the world.  It's much more expensive than in America.

So the net result in Canada is a cost of living crisis.   

These people are not on the brink of bankruptcy because they are being crazy reckless, but just to be middle class in Canada, is driving them deep into debt.

Canadians are not blowing money on crazy things, just buying a house in Canada, then running it, that alone is beyond the means of most Canadians now.

They still want to do it, you can't blame them, but if they can't cover when the shit hits the fan, they're gonna be homeless.

And like I said, the banks in Canada are not going to let them walk, they will garnish whatever wages they make, until those mortgages are paid.

Except that prices will keep climbing for the next two centuries, to the end of time at least.  Get in on the ground floor.  

[Dougie93]

Just now, Zeitgeist said:

Except that prices will keep climbing for the next two centuries, to the end of time at least.  Get in on the ground floor.  

Well the prices will tank when interest rates go up, so that will feed the crisis, as homeowners who are not defaulting none the less rein their spending in too.

In terms of returns on houses, inflation adjusted they're not that profitable, if you're looking for returns, the stock market is the way to go.

A house is more like a savings account, which you can live in.

[Dougie93]

For example if you are living in your parents basement saving up for a down payment, what you should do is this;

When the stock market tanks, 20% correction, take your down payment and buy stock.

Then it when comes back up, you will have enough money buy a house, with cash.

[bush_cheney2004]

10 minutes ago, Dougie93 said:

Well the prices will tank when interest rates go up, so that will feed the crisis, as homeowners who are not defaulting none the less rein their spending in too.

 

Yep...raise interest rates...reward the savers...punish the debtors.

[Dougie93]

1 minute ago, bush_cheney2004 said:

 

Yep...raise interest rates...reward the savers...punish the debtors.

Well, I made out like a bandit, so I can't complain.  I bought into the market before 2008

When it was tanking, my father was dying, so I just ignored it, I couldn't deal with stocks at that moment.

After they bailed it out, it's gone on the longest and biggest run of all time.

It's like I bought AAPL just when Steve Jobs came back. dirt cheap.

When I sold it, I used that to pay off my mortgage.

[Dougie93]

But by all means, let's have another correction.

Corrections are a good thing, buy low, sell high.

This will be the Millennials big chance to make a mint

If they have cash saved to buy low when the time comes.

I mean,  it's just flat line right now,  the policy stimulus is tapped out.

A 1987 style 20% correction would be a generational buying opportunity

Edited December 1, 2019 by Dougie93

[Zeitgeist]

Sounds like Marxism.  Fuck that.  Keep prices high. Lol.  

[Yzermandius19]

2 minutes ago, Zeitgeist said:

Sounds like Marxism.  Fuck that.  Keep prices high. Lol.  

Constant government intervention in the market sounds like Marxism. F*ck that. Bring on the correction.

[Zeitgeist]

I tease.  We need periodic corrections.  Just be sure to float all boats.  No winners and losers. Grow the pie.  That’s where my inner republican comes out.  

Edited December 1, 2019 by Zeitgeist

[Dougie93]

The issue is the government intervention to try to prevent the correction.

No politician wants a correction on their watch.

The central banks are supposed of be arms length, but really they're not, I mean obviously.

So then what happens is that it becomes overinflated.

Then the pressure builds up, like tectonic forces.

Then the corrections can be like earthquakes.

[Zeitgeist]

Fuck that.  Break the bank.  Print the money.  Float all boats.  Information Age.  It’s all fake news.