Thread: Vacant Home Tax
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  #48  
Old 11-09-2017, 05:12 PM
The Elkster The Elkster is offline
 
Join Date: Oct 2007
Posts: 2,358
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CHMC is most definitely THE single biggest factor in the RE run up. Without it banks would not be lending the stupid amounts of money to marginal borrowers. The money that is allowing people to continually bid up prices to stupid levels. CMHC has skewed the risk factor that should be inherent with lending. Recently banks have actually been supportive of slowing the RE freight train. Funny enough their change in stance coincides with the growing trend of people avoiding CMHC coverage by using third party lenders and the bank of M&D to make up the minimum to avoid it thereby increasing the uncovered liability risk to all banks. Go figured they'd want to slow things down when their azz is on the line.

CMHC has to be wound down by slowly and continually reducing coverage and stiffening rules leaving banks to lend based on full risk assessment. Yes there will be pain. Unwinding that much market manipulation comes with a price. No it will not put prices out of reach for everyone. Given time it will lead to a decrease in lending and consequently a decrease in prices until such time as prices come in line with real wages/affordability. Current owner/sellers will take a hit but then again most have also made significant profits on the back of stupid lending which helps offset the net affect. That is unless they spent all their gains in the form of HELOC's...
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