As you may recall, the lenders in the U.S. lobbied hard to the U.S. government to keep lending standards low, in turn bringing rates lower. The result of the blowup were spectacular.
It would appear that the Canadian bankers do not want to achieve short term glory by sacrificing long term stability.
“Banks have contributed with their own economic research to the ongoing public discussion about household borrowing and debt levels in Canada, and there is broad agreement that this is a matter that merits close attention,” said Terry Campbell, vice-president of policy at the Canadian Bankers Association.
The banks first approached Ottawa asking for tighter lending rules at the start of the year. In February, Finance Minister Jim Flaherty gave them what they wanted, unveiling a list of changes to mortgage rules, including a requirement forcing all homebuyers to meet the standards for a five-year, fixed-rate loan even if they chose a variable mortgage with a shorter term. There were also rules lowering the maximum amount consumers could borrow against their homes to 90% from 95%.
For his part, Mr. Downe said, he’s not trying to tell the Department of Finance what to do.
“I’m not prescriptive but I think those kinds of ideas [such as shortening amortizations] resonate,” he said in an interview earlier this week.
Moving to shorter amortizations would likely have a significant impact on the market. Statistics Canada finds 42% of all new mortgages are for amortization periods of more than 25 years.
http://www.financialpost.com/news/Bankers+sound+alarm+loans/3954536/story.html#ixzz17pkbJXVf
Advertisement
Like this:
Be the first to like this post.
Bankers concerned about debt?!! Only in Canada my Friend!
As you may recall, the lenders in the U.S. lobbied hard to the U.S. government to keep lending standards low, in turn bringing rates lower. The result of the blowup were spectacular.
It would appear that the Canadian bankers do not want to achieve short term glory by sacrificing long term stability.
“Banks have contributed with their own economic research to the ongoing public discussion about household borrowing and debt levels in Canada, and there is broad agreement that this is a matter that merits close attention,” said Terry Campbell, vice-president of policy at the Canadian Bankers Association.
The banks first approached Ottawa asking for tighter lending rules at the start of the year. In February, Finance Minister Jim Flaherty gave them what they wanted, unveiling a list of changes to mortgage rules, including a requirement forcing all homebuyers to meet the standards for a five-year, fixed-rate loan even if they chose a variable mortgage with a shorter term. There were also rules lowering the maximum amount consumers could borrow against their homes to 90% from 95%.
For his part, Mr. Downe said, he’s not trying to tell the Department of Finance what to do.
“I’m not prescriptive but I think those kinds of ideas [such as shortening amortizations] resonate,” he said in an interview earlier this week.
Moving to shorter amortizations would likely have a significant impact on the market. Statistics Canada finds 42% of all new mortgages are for amortization periods of more than 25 years.
http://www.financialpost.com/news/Bankers+sound+alarm+loans/3954536/story.html#ixzz17pkbJXVf
Share this:
Like this: