Ottawa to buy another $50B in residential mortgages

Deficit Jim strikes again!

for the uninformed

"The money will be borrowed in capital markets primarily from pension funds. Pension funds need high quality investments. As Ottawa's and CMHC's borrowing costs are less than that of the Banks, Ottawa will make a profit. As the assets are matched by liabilities, this transaction is "off balance sheet" and does not put the government into a deficit. As the mortgages are currently insured by CMHC, there is no change in the "risk" to the government."

".This is NOT a bail out. ...Canada does not have a real estate crisis. This is simply allowing banks to have the confidence to lend "joe six-pack" and small companys money. Then he/she/they spend to stimulate the economy. As this happens, jobs are created, people start to buy. That creates more jobs. ANYONE who thinks that this is the government following the US, or the government is helping the banks over people, obviously haven't a clue of what this is.
...The government may even make money on this, as real estate prices start to rise in the coming years."

these type of media stories need greater explanation so "joe six-pack " can understand them.

Not yet, anyway.
Not entirely sure that's going to happen.

Oh, prices will rise, but in how long? 1 year? 2 years? 5 years? It all depends on how bad the recession we have is.

As long as oil sits at $59 barrel, there is the potential for a lot of people who moved from Ontario recently to walk away from them (like many did in 1980s). Not that there's job there either, but without high paying jobs (funded by $80+ oil), how many won't move back home and hang out with their family/friends, collecting pogey?

I can see Alberta taking hard on the chin in the next couple of years. It might not be as bad as the 80s, but it's not going to be as good as it was the last six or seven either. Good thing we diversified our economy with the Heritage Fund...oh wait, 90% is invested in the petrochemical industry...whoops!

About the time this recession is over, baby boomers will be looking to free up the equity in their homes. Baby boomers have something like 80 or 90 percent of their equity in real estate. They'll be looking to retire.

So, recession ends, and baby boomer homes hit the market... ...when did you say prices will be going up and why?

I don't know when they'll go up, but unless the world ends tomorrow, it will happen. Real estate prices always rise in the long run, it's just a question of when, not if.

1) There is always risk. Mortgage companies get loan defaulters all the time, illegal sales, or just plain market problems.

2) They are using the pension fund to do this. The pension fund just recently lost 10 billion.

3) Sounds alot like the govt using assets from a dept they are not allowed to in order to use it elsewhere. At least when the Libs and Harper did it with the EI fund they paid down the debt. This just locks 75 billion up for 20 years although I realize that its far better then a simple give-away bail out.

better hope especially if you have 40 year mortgage and just bought a place in the last 2 years.

That coupled with having to put in your car must be a real kick in the ass

better hope especially if you have 40 year mortgage and just bought a place in the last 2 years.

That coupled with having to put in your car must be a real kick in the ass

Not at all. I'm doing great. We've got plenty of equity in it and are building more everyday. My renters pay the entire mortgage, so I could care about the term right now. I pay the condo fees (which I can write off as a loss), so I'm laughing.

I plan on selling that condo either for my retirement in 25-30 years or my kids can sell it after I'm dead. It could be worth $100,000 less than I paid (not that it is), and I wouldn't care. Whatever happens, my renters will have paid it off by then anyways.

Given that diesel was 20 cents cheaper all summer long when I do 75% of my driving (to the mountains and for vacations), I couldn't care that it's higher now. It's always higher in the winter anyways...but I get 100% more mileage than most American made gas hogs anyways, so it's all good. In fact, I spend less on gas now than I did three years ago with a Ford.

Cheers!

better hope especially if you have 40 year mortgage and just bought a place in the last 2 years.

That coupled with having to put in your car must be a real kick in the ass

Not at all. I'm doing great. We've got plenty of equity in it and are building more everyday. My renters pay the entire mortgage, so I could care about the term right now. I pay the condo fees (which I can write off as a loss), so I'm laughing.

I plan on selling that condo either for my retirement in 25-30 years or my kids can sell it after I'm dead. It could be worth $100,000 less than I paid (not that it is), and I wouldn't care. Whatever happens, my renters will have paid it off by then anyways.

Given that diesel was 20 cents cheaper all summer long when I do 75% of my driving (to the mountains and for vacations), I couldn't care that it's higher now. It's always higher in the winter anyways...but I get 100% more mileage than most American made gas hogs anyways, so it's all good. In fact, I spend less on gas now than I did three years ago with a Ford.

Cheers!

shouldn't have listened to the Misses and bought that toyota just think how much you would save all year

The amount of rent you have to pay has been going down in many places in the US... ...real estate troubles are just starting in Canada, hopefully they won't be quite as wide spread up here.

We bought at the wrong time, but we bought small and stuck to a conventional mortgage, despite their best efforts to convince me otherwise, so we won't be as bad off as some.

MLS home sales plunge to weakest level since 2002

Here we go! We may not use the term 'sub prime' but our banks were doing the exact same thing up here with zero down and 40 year ammortization.

not any more Bootlegga got in under the wire

http://www.cbc.ca/consumer/story/2008/1 ... -year.html

Effective Oct. 15, the maximum mortgage amortization period for new mortgages will be reduced from 40 years to 35 years. All mortgages must have at least a five per cent down payment. Homebuyers must have a minimum credit score of 620 and a maximum of 45 per cent total debt service ratio (the amount of gross income that is spent on servicing debt and housing-related expenses such as heat or condo fees).