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Originally Posted by Cowboy89
We do not have subprime rates in intentional strcutures
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I'm pretty sure I've seen some condo developments in Vancouver that had ads for teaser rates/sup prime style mortgages. I was working for a developer at a project in Port Moody and remember seeing signs at the site next door advertising them. You're starting to see developers waiving strata fees etc for the first few years which is basically the same thing.
I agree about the CMHC being the main problem with the market in Canada and will ultimately be the reason for any "correction" that will occur.
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Its main function is to provide mortgage insurance for prospective homeowners who put less than 20 per cent down on their houses, protecting the banks in the event of defaults. The CMHC also helps to spread risk by finding investors to buy CMHC-insured mortgages that have been pooled together into so-called mortgage-backed securities. All of this is guaranteed by the government.
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Isn't this awfully similar to what happened in the US?
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home prices are likely overvalued by as much as 20 per cent in some Canadian markets thanks to CMHC policies that encouraged banks to lend far too much money to people to whom they shouldn’t have.
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again, same thing in the US.
I'm really not convinced our banks are any better regulated than those in the US.