Vive Le Canada

Letter Suggests Enmity Between Bank Of Canada, Housing Corporation

Posted on Monday, October 30 at 08:51 by jensonj
The corporation's actions are likely to drive up house prices and make homes less affordable, not more, Dodge says in the blunt missive, uncharacteristic of the usually tempered language of the central bank. By stoking inflation with proposed new policies, the CMHC is undermining the work of the central bank with "very unhelpful" actions, said Dodge. The letter then upbraided the agency for blindsiding key government institutions. "I would have thought that as a Crown corporation, you would feel a responsibility to consult with the Bank of Canada and the Department of Finance before taking actions which could make the macro management of the economy more difficult and which have implications for overall financial stability." The June 30 letter, obtained by The Canadian Press under the Access to Information Act, was copied to Jim Flaherty, minister of finance, and Diane Finley, minister of human resources. http://www.cbc.ca:80/cp/business/061029/b102910.html [Proofreader's note: this article was edited for spelling and typos on October 30, 2006]

Note: http://www.cbc.ca:80/cp...

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  1. by avatar Jacob
    Mon Oct 30, 2006 7:26 pm
    Years ago, people took pride in paying off the mortgage on their residence, and "burning it" with a party. I guess this does not happen often anymore, particularly because mobility has increased.

    Any changes to ensure that people pay "till death" (as the word mortgage signifies) cannot be considered sustainable. Mr. Dodge's original comment is laudable.

    For CHMC to investigate comparions with the US situation, where 20% of the people have no net equity, is not a good sign.

  2. by
    Mon Oct 30, 2006 7:51 pm
    PondPine does good coverage on housing issues.<br />
    <br />
    <br />
    <a href="http://pondpine.blogspot.com/">http://pondpine.blogspot.com/</a>

  3. by Rural
    Mon Oct 30, 2006 9:57 pm
    Well…….it would not do to give those that really need a house a chance would it! As house prices go up there has to be a fresh look at how we pay for them, we are a VERY long way from the pressures on the housing market that Great Britain sees, but it coming. Even 40 odd years ago when I left for greener pastures in Canada most families took 2 generations to pay off a mortgage ……. No that’s not true, most folk had NO chance of even dreaming of owning their own home, and given the prices I’ve seen and their typical income its not gotten any better. With house prices in even the less pressured markets stating around $200,000 (in Ontario anyway) we need to give young folk a chance to get started and one thing is for sure ………. The bank will want not only want their pound of flesh, the lien on the property, but probably every thing else you own before they will consider loaning you any money on this secured property. Good for CMHC!

    ---
    When you are up to your ass in alligators it is difficult to remember that the initial objective was to drain the swamp

  4. by Wraun
    Tue Oct 31, 2006 12:43 am
    I see a 35 year amortization as a good thing as long as existing prepayment options are not curtailed or better yet, if they are enhanced.
    One can save a lot of money in interest by choosing the longer amortization and making extra payments.

    ---
    Everybody got to deviate from the norm

  5. by avatar Jacob
    Mon Nov 06, 2006 11:52 pm
    Have a careful look at the following economist's views on housing prices and mortgages:<br />
    <br />
    <a href="http://www.agaryshilling.com/">http://www.agaryshilling.com/</a> and then click on the INSIGHT Newsletter on the left sidebar.<br />
    <br />
    My question: Would the same doom and gloom apply to Canada?



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