Real Estate

B20 rules showing its effects early....

  • Last Updated:
  • Feb 6th, 2018 4:17 pm
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[OP]
Deal Addict
Jul 3, 2007
3383 posts
3716 upvotes
Toronto

B20 rules showing its effects early....

http://business.financialpost.com/real- ... lt-lenders

These borrowers are getting quotes from 5% - 9% if its alternative lenders and private market funds....and they want 25% down on average,...... that will make
most people think twice about buying in this market....
36 replies
[OP]
Deal Addict
Jul 3, 2007
3383 posts
3716 upvotes
Toronto
they got bailed out by morneau and trudeau with a loan shark..... whats your point?
Deal Addict
Dec 4, 2016
1903 posts
929 upvotes
Overall, B20 is a cooling measure, which in the long run helps strengthen the Canadian banking system, providing greater confidence to investors. When you add up all the credit tightening regulations implemented since 2008, Canada now has extremely stringent mortgage requirements, which means a sub-prime collapse is becoming less and less likely. Is it now time to invest in Home Capital and similar lenders?
Member
Jul 25, 2005
436 posts
129 upvotes
When are we expected to really see the effects of B20? If the rules came into effect on Jan 1, 2018... presumably smart buyers could have been pre-approved in a pre-B20 rate/approval on Dec 31, 2017 and use that until the end of March (3 months). Am I missing something, or would they still have to qualify on B20 rules if the purchase was made after Jan 1? Maybe we haven't even seen the full effects of B20 yet ...

I suspect spring will be a very interesting time for real estate.
Deal Guru
Feb 22, 2011
10417 posts
12949 upvotes
Toronto
joepipe wrote: they got bailed out by morneau and trudeau with a loan shark..... whats your point?
My point was they were wrong, HC were struggling with liquidity and everyone was going on and on about how it showed problems in the market and how it was going to be a catalyst. Now that it's back to normal no one wants to talk about that. So now everyone latches on to something else, when it normalizes they will latch on to something else.
Deal Guru
Feb 22, 2011
10417 posts
12949 upvotes
Toronto
rjg4235 wrote: My point was they were wrong, HC were struggling with liquidity and everyone was going on and on about how it showed problems in the market and how it was going to be a catalyst. Now that it's back to normal no one wants to talk about that. So now everyone latches on to something else, when it normalizes they will latch on to something else.
Oh turns out OP was the one trying to say HCG would crash the market last summer. That didn't work so I guess it's B20 this time lol. Do you get tired of being wrong?

Hometrust getting closer to bankruptcy...raising GIC rates
"Game over in possibly 1 or 2 months....government bailout would be too risky for Liberals "
http://forums.redflagdeals.com/hometrus ... #p27828492
[OP]
Deal Addict
Jul 3, 2007
3383 posts
3716 upvotes
Toronto
rjg4235 wrote: Oh turns out OP was the one trying to say HCG would crash the market last summer. That didn't work so I guess it's B20 this time lol. Do you get tired of being wrong?

Hometrust getting closer to bankruptcy...raising GIC rates
"Game over in possibly 1 or 2 months....government bailout would be too risky for Liberals "
hometrust-getting-closer-bankruptcy-rai ... #p27828492
the market did crash from the peak .....and B20 is having its effects on the current market as per FP article.....so I was right....nice try though
Deal Addict
User avatar
Jan 5, 2003
3708 posts
463 upvotes
I know the bears here are not good with maths, but 20% increase means if 5% were rejected before now 6% are rejected. Yeah, that will really change the market.
When the truth offends, we lie and lie until we can no longer remember it is even there. But it is still there... every lie we tell incurs a debt to the truth. Sooner or later, that debt is paid.
Deal Guru
Feb 22, 2011
10417 posts
12949 upvotes
Toronto
Flavour wrote: I know the bears here are not good with maths, but 20% increase means if 5% were rejected before now 6% are rejected. Yeah, that will really change the market.
And that 1% still has other options. They can increase down payment, extend amortization, pay down debt, save more, buy a cheaper place or go to an alternate lender.
Last edited by mazerbeaner on Feb 5th, 2018 11:41 am, edited 1 time in total.
Deal Addict
Jan 20, 2016
2028 posts
1010 upvotes
Houston, TX
joepipe wrote: the market did crash from the peak .....and B20 is having its effects on the current market as per FP article.....so I was right....nice try though
You been completely wrong about HGC:
1. It didn't bankrupt as YOU predicted
2. And now you're saying "they got bailed out by morneau and trudeau" while YOUR prediction was "government bailout would be too risky for Liberals".

So you was right, being wrong probably.

Regarding RE crash you're also quite far from being right. Some overpriced in April 2017 property didn't closed, some are listed lower the peak (but positive to 2016 for example). Some properties are sold NOW in few days and over asking (not a condo, that's again a completely another story quite far from crash level). Hardly a total crash you predicted...
Make the face great again
[OP]
Deal Addict
Jul 3, 2007
3383 posts
3716 upvotes
Toronto
they got on their knees and begged buffet to bailout hometrust ..... so i was, right , the government did not bail out hometrust directly with taxpayer money....

and heres your market update....

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Deal Addict
Jan 17, 2006
2188 posts
2297 upvotes
Toronto
Being right is not a joepine's strength.
But he has that Whitby story now to plug it into every conversation.
Deal Addict
Jan 20, 2016
2028 posts
1010 upvotes
Houston, TX
joepipe wrote: they got on their knees and begged buffet to bailout hometrust ..... so i was, right , the government did not bail out hometrust directly with taxpayer money....

and heres your market update....

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Pff, you making all-Canada market predictions based on 4 properties from 2 locations??
I can do cherry-picking as well

https://www.mongohouse.com/soldrecords/ ... 12a1a397e5
list: $639,900
SOLD for $0.65M, January 2018

so what?

p.s. just look at neighbour thread about Ottawa, they do not have price drop at all, quite an opposite.
Make the face great again
Deal Expert
User avatar
Oct 26, 2003
35162 posts
4319 upvotes
Winnipeg
that's just your typical one family detached house, not even located in a metro core and still cost more than most places in the country.
Deal Addict
Dec 4, 2016
1903 posts
929 upvotes
Flavour wrote: I know the bears here are not good with maths, but 20% increase means if 5% were rejected before now 6% are rejected. Yeah, that will really change the market.
What was the rejection rate before? If 50% gets rejected before, and now it's 60%, that doesn't sound good. Going from 50/50 to 60/40 is quite a change. For now, the borrowers can still go to credit unions and perhaps pay a slightly higher interest rate. If they can't get a mortgage at credit union and have to go further down the ladder, that would have an impact on the market.
Deal Addict
User avatar
Jan 5, 2003
3708 posts
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BlueSolstice wrote: What was the rejection rate before? If 50% gets rejected before, and now it's 60%, that doesn't sound good. Going from 50/50 to 60/40 is quite a change. For now, the borrowers can still go to credit unions and perhaps pay a slightly higher interest rate. If they can't get a mortgage at credit union and have to go further down the ladder, that would have an impact on the market.
Well according to the bears nobody got rejected before and everyone was lying on the applications. Not surprisingly the article that mentioned it didn't really explain the numbers so everyone just gets to guess.
When the truth offends, we lie and lie until we can no longer remember it is even there. But it is still there... every lie we tell incurs a debt to the truth. Sooner or later, that debt is paid.
Deal Guru
Feb 22, 2011
10417 posts
12949 upvotes
Toronto
Flavour wrote: Well according to the bears nobody got rejected before and everyone was lying on the applications. Not surprisingly the article that mentioned it didn't really explain the numbers so everyone just gets to guess.
What's a 20% increase of 0?
Newbie
Jan 19, 2018
61 posts
121 upvotes
We have not felt B20 yet.
1. There are 10,000 + people running around with pre-approvals under the old rules for 90-120 days.
2. There is still a rush to get in under the old rules and it will intensify towards April.

Here is the ratios:
20% rejected
40% Pre-approval
40% B20 Tested

Once you remove that 40% pre-approval you get a BIG problem. April 30, 2018.
Deal Guru
Feb 9, 2009
11256 posts
9746 upvotes
lydia82 wrote: We have not felt B20 yet.
1. There are 10,000 + people running around with pre-approvals under the old rules for 90-120 days.
2. There is still a rush to get in under the old rules and it will intensify towards April.

Here is the ratios:
20% rejected
40% Pre-approval
40% B20 Tested

Once you remove that 40% pre-approval you get a BIG problem. April 30, 2018.
Where is the source for those ratios?

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