Fair Mortgage Solutions Inc. Blog

Shayam Kaushal

At the IMBA meeting we became aware than Shayam was ill. We owe a great deal to him. He can be summed up in one word, generous.

About three years ago we were thinking about taking the step and going independent but it was a big step. We called IMBA to ask for advice and they recommended talking to Shayam. I phoned Shayam out of the blue and he answered some questions and agreed to see me for lunch. I found him warm and generous, I was a stranger to whom he had never met before. He shared his background and I shared mine. He was very kind to talk to me and it meant a great deal. He pointed out "what could be done" and not to be intimidated by larger companies. If your idea is good it will succeed. He gave me a lot of advice and I came away from that lunch thinking, "this could work!" He was that enthusiastic. Just talking about the everyday work he had done to build up his independent company gave me hope. Sham has made a huge difference with us. He may not be aware of it, but he did. The concept we have may well do very well and it is in large part because of his generosity and nuturing of another person that made a difference. The fact that IMBA would have people like Shayam being associated with it raises the bar and does them very proud. Three years ago Shayam was saying about illness he had battled and continued to battle. It is our sincere hope that he does well and battles through. I am not sure exactly how serious his illness is. He is a very generous person and has made a big difference with many many people. He is a credit to his family and he is a credit to the whole industry. He is simply a generous and kind man. He has many an impact on a great many people. We all thank you Shayam. Your are a great person.

Posted: Friday, May 09, 2008

IMBA Meeting

IMBA held there annual conference on Thursday and Friday. The seminars were useful and well managed. The Annual meeting was colourful, it was democracy at its best, people getting up and commenting on there point of view. It was good give and take. It is good that people can air there views and that it is not simply closed. Another element that came out was how hard the board work. It is a group of people who are trying their best and giving up many hours of work and home to do so. They are by and large people who care deeply about the industry. The cost to attend was 87.00, a bargain. IMBA comes across as grass roots and down to earth and really pro-broker. The Gala at the end of the evening was great. Revenue was down primarily through many brokers not renewing and perhaps dropping out of the industry. In the last year the industry and banking has taken quite a few hits.

Posted: Friday, May 09, 2008

Mystery of Mortgage Meltdown

This is an article by James Daw in the Toronto Star, May 1st, 2008. It is very good. Subprime crisis in U.S. has a good offshoot in that central banks are lowering rates, our cost of borrowing is lowered. But some banks are nervous about lending because of losses. The U.S. subprime crisis has affected the whole world. Lenders could lose 1 TRILLION dollars in subprime crisis through irrational and immoral lending. Governments have lowered the prime but the banks have only partially passed that savings on, they are keeping the rest for profit to hedge against future uncertainty. Canadians tend to knock down their mortgages more than the U.S. because the U.S. has tax deductable mortgages many want to max out the mortgage amount and max out there deductions. We are much more solid, we have a stronger system. Going bi weekly accelerated for your payments and making extra payments will allow you to gain enormously on your net worth.

Posted: Saturday, May 03, 2008

Mark Carney

Mark Carney is the new Governor of the Bank of Canada. In a Toronto Star article he points out that he is worried about long amortizations and high ratio mortgages. On the high ratio mortgages, up to 100% LTV, they have been around for a while and the underwriting criteria on them is strong. If there were a large market correction both clients and banks could be left hanging but the fundamentals compared with U.S. are different. Our no money down is different from the U.S. no money down. The other aspect is 40 year amortizations. This is a good point. The 40 year am is popular and becoming more so. There is one lender in particular who has stuck to 25 year amortizations and is probably losing business for it. Clients want the option. If a client goes for 40 years we generally recommend it as a tool, a short term instrument. A person may go for a 40 year amortization but a key element is when they are able to, they should make extra payments to knock the amortization down. If you take 40 and literally make the minimum monthly payment that is not a good thing. 40 years was brought in from the U.S. and it has become very popular because the payment looks low but long term you have to be careful. A good example is going for 40 year am when one of the parents is off work, say taking a couple of years off for children, when the parent goes back to work they have enjoyed the low payment when they need it and can bring the payment back up to a 15 or 25 year schedule. We love 15 year amortizations, this is a good balance where your payment is not too bad but you hammer the dickens out of the mortgage. 40 year amortizations can be a useful tool. High ratio mortgages that are underwritten correctly are the norm. If you were to go to 20-25% down minimum you would have a lot of angry people.

Posted: Saturday, May 03, 2008

Rent to Own situations

Rent to own is complex. There is one word which leaps out us, "vulnerability." The client who is renting is very vulnerable. We had a situation recently where a client had rented for five years, building up a good chunk of equity and the landlord quickly said they wanted paid in full or the clients would be put on the street. We arranged the mortgage on time but it was not easy and the client was upset at the thought of being thrown out after being a tenant/owner for so long. If someone asks us about the value of rent to own we are usually against it, we hear many horror stories. Many bad situations. Maybe 85% go down the drain and 15% work out? That is just anecdotal, nothing scientific about it. But we hear many many heard wrenching stories about it.

Posted: Saturday, May 03, 2008

Oakville Office

We are expanding shortly into Oakville. Our new office will be set up shortly. We are getting more and more work from Oakville, Brampton and Mississauga. We are now hiring agents for both Oakville and Hamilton. If you know of anyone who believes in: -customer service -ethics -has passion for clients Please fax or email us the resume. Have a good weekend.

Posted: Friday, Apr 25, 2008

Decluttering.ca

We did a mortgage in Oakville recently and the client was kind enough to give us a card for "decluttering.ca" they specialize in just what they say, de cluttering a home getting ready for sale. The phone numbers are 905 469 0908 and the cell is 416 460 8098 email is silott@cogeco.ca or www.decluttering.ca Client said they did great work.

Posted: Tuesday, Apr 15, 2008

Sales Increase over 54%

Our year to year report is in on Fair Mortgage Solutions. In one year, with the same number of agents we have increased our production by over 54% in a tightening market. This is in the face of the quietness in the industry. We all deserve a round of applause, it is a good effort. It is good to stay so positive even with all the bad mortgage news out of the U.S. Canada is much better, the fundamentals are good. This is a good sign. We are all very pleased.

Posted: Tuesday, Apr 15, 2008

Mrs. D

Well, it has been a few weeks and Mrs. D seems to be fitting in great. Her sense of organization is terrific. We have all noticed her penmanship. Some of ours is horrible, Egyptian hieroglyphics yet Mrs. D has lovely writing. What a change. She has picked up very quickly on what needs doing. She is very low key, which is good.

Posted: Tuesday, Apr 01, 2008

Rate Decrease

Fixed rates are drifting down gradually and variable may go down yet again. There are some great deals on the variable open and variable closed mortgages.

Posted: Tuesday, Apr 01, 2008

Power of Attorney

We are not lawyers, we are mortgage specialists but we can give some general thoughts on power of attorney of POA. There are a few different types, ranging from specific property oriented to a more general form for a person's welfare. If you have POA on a relative in general terms you are acting legally on behalf of that person, they may be incapacitated in some way. Some times a son or daughter will have POA on a property where the parent is fine but the parent does not want any responsibility of the day to day going's on. POA has been associated with fraud, to an increasing degree. It has reached the point where if a clients states they have POA to act for someone the instant red flags go up and the banks almost assume, to a great degree, possible fraud. The banks have been stung by doing POA mortgages. It has reached the point where if a normal mortgage is being processed, the commitment no matter will state the dangers and concerns of POA. If a child acts on behalf of a parent and has POA, the courts can later decide to set aside the mortgage, thus rendering invalid the mortgage brought under POA. If the POA was arranged with a particular lawyer and that lawyer is acting on behalf of the same client, there are situations where it may go through. We are working on a mortgage free property in Stoney Creek where the client has a valid POA and the mother is suffering from dementia. The client may act. The lawyers invovled have to be very careful that it is valid. In a Toronto Star article by Bob Aaron today it states: "In the wake of cases like this, new rules go into effect on April 7/2008 in the governments electronic land registration system. The rules will make it much more difficult to use a POA - even a valid one - in a real estate transaction:" POA might have been a good thing but some have taken it to far and tainted the concept. "After this date, a lawyer will be required to certify that he or she has reviewed the POA documents with the person using it and that this person is acting within the scope of the document."

Posted: Saturday, Mar 22, 2008

Divorce

We have had a real run up of clients going through divorce. We advise them of there options, many times they talk to us together and we let them know what can be done, what the bank requirements are, what the options are. A key recommendation we make is to try and keep it as peaceful as possible, even for the kids sake. Divorce can be a very wrenching emotional issue and we provide good advice and options for almost any scenario.

Have a good Easter.

Posted: Thursday, Mar 20, 2008

Lori Corkill

Lori works for a local equity lender named Effort Trust. They are an institution in Hamilton and have expanded to Toronto. Lori is the manager of mortgages has been there for a long time.

We just wish to pass on our appreciation for a very very difficult deal that closed on Friday. Without Effort's help and understanding of the whole situation the mortgage would not have closed.

Lori has done her part in providing the mortgage and now the ball is in our court and the clients court. The intention is the re build the credit rating and provide the client more options down the road. In terms of ability and professionalism Lori cannot be beat. Where she really makes a difference is her basic humanity. It is a characteristic not often seen in banking.

Posted: Thursday, Mar 20, 2008

A subprime mortgage: Good or bad?

Subprime mortgages have taken a real knock. The news is constantly going on about it. First, a definition. A subprime mortgage is a mortgage where the income or credit can be below prime criteria. Thus "sub" prime. Subprime mortgages are used when there is job loss, divorce, illness and a variety of other purposes. They can serve a huge purpose and there reputation is being blackened. Subprime can be good and they can be useful. WHERE THEY ARE BAD is when given to a person who cannot manage it. In the U.S. they would give mortgages to almost anyone based on a "self dec" of income, you could write whatever you want and based on what you wrote they would give you a mortgage, many times it would be much more than you can afford but brokers and lenders were greedy and took advantage. I think this crisis is gods way of getting back. In our experience, if a self dec is used in Canada it must be fundamentally common sense, it must be good for the client and lender. Another aspect was underwriting criteria on variable rate mortgages. If the U.S. mortgage is 1% for 2 years then jumps to 8-9% thereafter, the U.S. lenders would underwrite on the basis of "can the client afford 1%" in Canada the lenders would say "can the client afford 9%" so it is night and day. The subprime market has withered since August 2007, but, subprime mortgages have been a godsend to many, many people. We view them as a temporary step. A client who came in today was a past client from 3 years ago. We got him an AGF equity based (sub prime) mortgage. We felt it would be 3 years for him to re build. His credit score was about 500 which is pretty low. We advise him on the future, he did what we said and today he has a beacon score of about 650 and has a mortgage with Scotiabank. So he has climbed to the top of the ladder and he thanked us for the advice. Subprime helped him and it was a temporary instrument. Right at the moment, because of Bear Stearns, because of the U.S. problems there is a fear among people. People laugh but we think it is very much like 1932 all over again. The lessons from 1932 would serve everyone well.

Posted: Tuesday, Mar 18, 2008

U.S. Fiasco & The Wise Man

In August 2007 the subprime crisis came to a head. Prior to that there were months of rumbling about problems. The crisis hit and the U.S. news have never been good ever since. It seems to get worse and worse. Bear Stearns was bought out by J.P. Morgan with banking from the Federal Reserve board and the U.S. Fed is dropping prime by 1%. It dropped prime again a few weeks back. The message this can send out is PURE panic. The subprime crisis has migrated to the point where no one knows where it will end up. Canada's banks and lenders have always been fundamentally strong. Some of the key subprime lenders have gone by the way side, most have gone by the wayside but the core "A" lenders, core "equity" lenders and core "private" lenders are still there, doing what they have always done, perhaps being a bit more cautious but still active. A few years ago with the rise of subprime lenders from the U.S. and with the addition of Canadian lenders, a very wise, elderly man said it was no good. His advice has always been spot on. He is like the Oracle of Delphi, his judgement is that good. We debated these new lenders coming in, we are Fair Mortgage were pleased that there was more options for clients. Our friend same that it maybe so but the lenders did not know what a downturn was and he kept saying it was a house of cards. This has proven true. When he said it at the time we were not sure, it could have been an elderly person just going on. When we talked to him this morning we had more discussions, the gist of which is: (1) The Canadian Market is fundamentally good. (2) Subprime will continue to get a bad rap and brokers will rely on a blend of "A", equity and private lenders. The way it was done in the old days. (3) The short term unsecured market will take a hit, cards, PLC and loans, that is where the next story will unfold. (4) His attitude: Relax, things happen and things will pass.

His comments have always been excellent. He worries about the high rise condo market. This unsettles him. I am not sure if that is valid or not but based on his past hitting percentage, I would not urge family members to buy high rise. His advice to clients and manner of lending have always been exceptional.

He is a very wise and very smart man. We have tremendous respect for him and that has steadily grown.

Posted: Tuesday, Mar 18, 2008

Mrs. "D" Receptionist

Diane or Mrs. D, has just started as our receptionist/admin person. The volume of work is such that we need some help handling it. She could be a great asset to us and we look forward to working with her. Good luck Mrs. D.

Posted: Monday, Mar 17, 2008

Open 4.75%

This product is working out well for us. Clients like the flexibility and structure. Going variable right now is a good suggestion, most closed variables are 4.75 but getting a totally open mortgage at this rate combined with good customer service is tremendous. A good example is a client that came in from the Middle East, they put down a downpayment but anticipate getting more money over soon, they can chunk down on the mortgage whenever the funds come across. It is a very flexible product.

Posted: Monday, Mar 17, 2008

Refinance vs Bankruptcy

A client in the north east end was referred over for a tough situation. Client had good credit but they were downsized on their job and income dropped dramatically. The cashflow was tightened and they have about 50,000 worth of credit cards and loans in addition to the basic mortgage. The person who asked us to look at it wanted a second mortgage then the client would declare bankruptcy. We worked with the credit rating, income and mortgage amount and using a 40 year amortization we were able to re package what they had into one mortgage payment, and elminating most of the credit card debt. Key part was getting their TDSR down to 39% from 58%. It is a measure of stress, one is easy and the other is very stressful and equals bankruptcy. They now can avoid all the problems and should be well set.

Posted: Monday, Mar 17, 2008

Our Advice

A client called today that was referred by a friend. She said that she understood that we gave good advice to clients and we were pretty grateful for that. She said that she was willing to pay us for our advice and we said that is not necessary but it was nice to offer. Many times the advice we give saves the clients dramatically. It was a very kind offer and we will run application tommorrow and gave advice on it. Again, we try to make it a win win win. Everyone should be very happy with the outcome.

Posted: Monday, Mar 17, 2008

Customer Service

A mortgage closed in Stoney Creek. It was a very difficult and very involved situation. A key element was transparency for all the lenders and the clients. When we were told on Friday that it closed we were very glad for the clients, we know it meant a great deal to them. They are going to bring us over a bottle of wine as a gift. Being St. Patricks day they wanted to go for a beer but we were pretty busy. The mortgage was put together with help of three lenders and they did a great job. The mortgage closed on Friday but our job now begins because we intend to get the client to a good position then combine the three mortgages together. This is one for the record books In August 2007 we did four powerful stories at the subprime conference in Toronto but this is a bigger deal than all four of those put together.

Posted: Monday, Mar 17, 2008

New Home Buyer Seminar

We are participating in a new home buyer seminar at Mohawk College, this Saturday morning at 8.45. There will be a morning session and afternoon session. It is being conducted by Rick and Krista Deverson. We will provide mortgage information, there will also be legal and home inspection advice. Should be good.

Posted: Thursday, Mar 13, 2008

Great Rates

The variable closed is down to 4.65% and the variable open is down to 4.75" The 5 year fixed remains at 5.79%. There maybe another rate drop shortly.

Posted: Thursday, Mar 13, 2008

CMP Awards February 29th, 2008

We had a great time at the CMP awards gala in Toronto. We did not win submprime or independent broker of the year but we feel honoured to be included in such company. Our "Full Monty" video skit was a hit. Should make it to Youtube. We grateful for all the help we have been given by many people, we did not get to read our acceptance speech but this is what it would have said:

"we would like to thank our wives and girlfriends who have been so supportive. We would like to thank CMP and the judges. We have a big thanks to give our fellow Full Monty crew of: Ben Bilato, Robert Hooper, Patrick Quitasol and Graeme Moss. We would also like to thank Sham Kaushal from IMBA, Fred Testa of Invis and Moe Forget of Moneyconnect who gave us good advice and gave us good karma. We would also like to thank Mike and Marsha Turtel who have helped us do many difficult deals. We also owe a big debt of gratitude to Chris Grabiec and John Janisse from the Dunham group who have helped us with both web sites and have supported us in many ways. They are truly good friends and we are lucky.

We thank you all!

Posted: Monday, Mar 03, 2008

Stoney Creek Situation

We have been working on a mortgage for a client in Stoney Creek which has been very complex and very time consuming. We have kept with it, trying different combinations to make it work for the client but the underlying situation is very very difficult. Our attitude is we will try to make it work on a best effort basis, it has been that demanding. Today it looks like it might come together and we are very glad for the client, who need a bit of good things to happen for a change. There are three lenders involved currently and there will be three after we re jig the situation but it is one lender in particular who has moved heaven and earth to make it happen for the client. It transcends dollars and cents and moves into............helping a client out and giving them hope. It is a very unusual thing for a lender to do and it is very impressive. We should sign the client up Wednesday night around 7.00 and hopefully the mortgage will close within 10 days. The mortgage may well be a record setter for difficulty. When it closes, if it closes, everyone will celebrate big time.

Posted: Tuesday, Feb 05, 2008

"Maxed Out" DVD Independent Documentary on debt and credit cards

This U.S. Documentary from 2005.

This is an independent movie, award winning which is both informative and funny. It is on the U.S. in the year 2005 and even 2 years prior to the melt down this showed warning signs of danger. Will try summarize the main points. -people buy bigger homes with idea of interest rates staying low and prices continuing to rise -they show 1950's archive movies of how credit used to be viewed. -many Americans have fascination with rich and famous -saving is the right way but not many do it, many feel "entitled" -4 billion credit cards offers are made to U.S. public per year -consumer lending is GROSSLY profitable. Especially credit cards. -average U.S. household held 9205.00 in credit card debt and pays 1300.00 per year interest -if your late on paying card they use as excuse to hike rate -bankruptcy law written by MBNA credit card company -people think buying "stuff" will make them happy -people experience job loss, illness, divorce, gambling etc and when this happens some of the largest corporations in U.S. and there to service the problem -Providian was fined 400,000,000 for fraud and yet Bush appoints ethics czar from same company -banks now becoming "sales culture" as opposed to prior "bank culture" -credit cards and subprime were very profitable (before the crash) -if there is a problem with payment on a card they pile on fees and charges and really jack it to the max -debtoutlet.com is a good source for information -debt collectors are ruthless, relentless and harrass clients, sometimes resulting in suicides -pawn shops, cheque cashing servivces and payday loans growth are a symptom of a growing problem -many large U.S. corporations get a lot of profit from low income and vulnerable clients -misrepresentation by broker and lender in cases -easy money when your in bind, you don't ask questions -equates slavery with sharecropping as unfair debt system and they equate that to taking advantage of poor in U.S. -in 2004 30 U.S. sued lenders for predatory lending and U.S. government came to aid of banks -credit cards given out at colleges and Universities can hurt those who don't use them right. (If used right you can use it as a tool to make yourself stronger) -University of Texas student commits suicide, gets 12 credit cards and cannot make payments and cannot afford bankruptcy fees and kills himself. -1972 there was tough income and credit requirements for credit cards, now much less -3 "C"s of credit are Character: which is trustworthiness Capacity: ability to pay Capital: ability to save -three major credit information companies are Equifax, Trans Union and Experian -FICO or BEACON score is everything. Algorithims are secret. -Inaccuracy rate of 90% (In defense of credit information gatherers, it has been our experience that by and large information is accurate. Sometimes errors are made and can be corrected. Many times a client may be emotional or angry about a score or item and they direct that anger at Equifax but it is really themselves that the anger should be aimed. A legitimate question or problem that clients have is IF they have something incorrect on bureau, getting it corrected is almost impossible and is akin to dealing with City Hall) But credit info is generally good and oxygen of entire system.) -between 1994 and 2004 10,000,000 Americans declare bankruptcy -family of four 1972 compared to family of four today, family today is poorer and can have trouble providing basics -no good answers to resolving the problem, it is that big -George Bush's top campaign contributor was MBNA credit cards -April 2005 Speech of Bankruptcy bill. Makes it tougher to re start. Bill punishes people. Written by MBNA. Senator Orrin Hatch (R) from Utah said "we feel badly about it and hope that they will forgive us" -average American family has 90,000 in debt -U.S. government reckless spending and raiding social security trust fund -U.S. government spends more on interest for debt than homeland security, education and healthcare combined. -financial stress increases suicide rate. Death comes as relief. -rich getting richer -life of great struggle, anxiety and vulnerability

FAIR MORTGAGE POSSIBLE SOLUTION: Live within your means, save, don't reply on material goods to make you happy, rely on friends and family. It is a world of "STUFF" and that is easy said that done but living within your means can me less stress and more happiness.

Posted: Friday, Feb 01, 2008

Client Given Bad Advice

A client came in last night. He has good steady income and a home worth 280,000 He can afford a mortgage of about 165,000 yet the current mortgage is 230,000 and that is at 11% on the entire amount! His payments are almost double what they should be. A more common occurance these days is that a client may take out a high interest loan, a small loan and this is turned around by some lenders into an entire new mortgage at a very high rate. The marketing is effective but the emotional wreckage is substantial. As a general rule, we all know that if a persons TDSR is 0-40% they should be able to manage there home, if it is 40-45% they are under severe strain. This client last night is coming in at close to 70%. This means that when the mortgage was arranged, the person arranging it would almost surely know that the client would be stressed and fail and hit with misery. But the person arranging the mortgage was compensated abnormally well so they will ignore the long term ethics and go for the short term money. Client last night is a good person but his whole life is effected. We see it all the time where a client has to make a decision, sometimes to downsize to something can afford. It is not always an easy thing and sometimes clients get upset but it is like a doctor diagnosing a situation and letting the patient know the reality. The U.S. based bank that got the mortgage for the client last night, may not have been looking at the bigger picture. We have said for a long time that Canada is by and large different and it is, it is better, but some situations seep through the cracks. The client is victimized and the person who perpetrated it moves on and perhaps never sees the client again. It is sad to see a person brought this low.

Posted: Friday, Feb 01, 2008

Interest Rate Negotiations

A client called today who wanted a very very low rate. We have the ability for give and take and are able to get the client the product he wants at a very low rate. There is always a little back and forth with us on rates and there is movement within the banks themselves on rates.

Posted: Monday, Jan 28, 2008

Sub-Prime Misconceptions

Every night there are news articles out of the U.S. regarding the sub-prime crisis and the implications world wide on the individual and the financial system. The points that are mentioned about lender greed, broker greed and very poor underwriting are correct for the U.S. and have damaged the whole U.S. economy. Does this mean a sub prime mortgage is no good? No. A sub prime mortgage can be extremely useful and is a vital tool in the mortgage arsenal. Many clients may go thru divorce, job loss, illness or invest in a small business and it doesn't work, there are quite a few major, common things which may cause the credit bureau to decrease. The fact that there is a lender with a product priced to risk for this client is invaluable. In Canada the economy has done well and to the credit of the major lenders, the underwriting criteria have been strong. The most sub-prime of the sub-prime lenders in this country has accepted self declarations for self employed clients but they have always stressed, "is this good for the client, can the client manage?" There are 3 major points which I think the U.S. has been different from us: (1) The lenders in Canada have fairly rigid underwriting, they know that if the client goes south that it will be a short term gain but long run, it is very bad strategy. (2) The brokers in Canada have been a bit more mixed. In general, our attitude is strongly that if the client won't do well from it, it is not worth doing. Not everyone agrees with this in the broker community. Sometimes we suggest a temporary mortgage to alleviate the problem while the client sorts things out, but to get a mortgage for a client knowing that the client cannot handle is immoral. (3) When the mortgages have been bundled off and sold in the U.S. it is apparent that there was no regard for the buyer, greed injected itself and making money became the overiding issue, short term gain, not long term well being became the name of the game. Thank god we live in Canada. It is financially stable and as much as it is popular to pick on lenders they have held things to a high level, which benefits us all and keeps the system strong.

Posted: Monday, Jan 28, 2008

The Full Monty

Today, Ben, Robert, Patrick and Graeme did the Full Monty routine, for a good cause. The staff at the Celidiagh House were good enough to let us use the upstairs room and we were videotaped. It was hilarious. We should have had a beer before we did the routine, we ended up having one after. Did a few takes, different moves. Had the police uniforms, whole nine yards. The edited product should be hilarious. The cameraman was from Australian and he felt it was one of the funniest things he has ever seen. We had 3 songs lined up but went with Tom Jones rendition of "keep your hat on" which was the last song in the movie the Full Monty. Should be interesting! We are debating if it is Youtube grade!

Posted: Monday, Jan 21, 2008

Thailand Resume

We just received a resume from a banker in Bankok Thailand who wishes to apply here. The world is getting smaller with the internet. Interesting.

Posted: Thursday, Jan 17, 2008

Sub Prime/U.S.

The news continues to be bad. Citi and CIBC have both taken large losses. The news out of the U.S. continues to be bad. In March of 2008 is the peak for the ARM rollovers and that could be one of the worst periods. The Canadian banks and the Canadian economy have been that much better, that much more stable than the U.S. It is a real shame that we are being tarred with that brush. Canadian underwriting has never been nearly as loose or reckless as the U.S. and we deserve better. It is interesting that at CIBC they would give a teller hell for loosing $ 5.00 yet they can lose money by the billions in bad judgement by senior management and somehow that is okay. They will probably end up with nice packages.

Posted: Tuesday, Jan 15, 2008

Credit Inquiry

Credit inquiries, especially numerous inquiries can be self defeating. It is expected that clients will shop around for rates and may get 3-6 successive bureau hits in a row. When a client has some credit problem, whatever it may be, they may seek an answer and keep on trying again and again with different brokers, banks and lenders and this can lower your score dramatically. If you have a credit issue, it is good to call us, the one stop shop and we will give you a summary of where you stand and what you can do to change the situation. What you can do to improve the situation. To keep inquiring is like bashing your head against the wall. It can result in heartache. Getting a good concise answer is worth its wait in gold.

Posted: Tuesday, Jan 15, 2008

BDO Dunwoody

BDO Dunwoody are putting a coast to coast advertisement about the services they offer. They have been kind enough to include one of our quotes in the full page colour ad. We appreciate it very much. We both have similar takes on the client, the goal is doing the best thing and providing the best solution for the client to resolve. At the heart of it, we all are seeking the same thing. For the client to do very well and be treated in a very professional way.

Posted: Saturday, Jan 12, 2008

Cookies

A lady in Stoney Creek was kind enough to bring us cookies and pastries. We had done mortgage for her 1 year ago and she had recent serious problems of a marital nature. She was pretty upset but we just gave her some good advice generally, it allowed her to step back a bit and look at things in a different way. It was a very kind thing to do.

Posted: Saturday, Jan 12, 2008

Lucky Fool

There is a great quote in the book, "Traders, Guns and Money" (which is a hilarious view of the world of derivatives) by Satyajit Das. The book is not dry, it is very, very funny. Very informative. A good quote in it is "it is better to be a lucky fool than an unlucky genius." How true. A lot of chuckles over that one.

Posted: Monday, Jan 07, 2008

Expansion Opportunities

We have had a great 2007 and are looking to expand in 2008. The opportunities are here in Hamilton and a new office in the Oakville-Mississauga corridor. Contact us if you would like to join us. It will be fun.

Posted: Monday, Jan 07, 2008

Thank You

Our team thanks our clients, lenders, referral sources for your patronage during 2007. We owe a great deal to you and we are very grateful. What we have done has been with your support.

Best wishes for the year 2008.

Posted: Thursday, Dec 27, 2007

Extraordinary Year: 2007

We have had a very good year. Some wonderful events have happened: -each of us have won sales leader for the months -company is sound and growing -we set up second company -we were first company to do Moneyconnects first mortgage and got a plaque from Moe Forget personally -we had an article in CMP magazine -we did subprime conference in Toronto and explained our approach to clients and lenders -Graeme became editorial member of CMP -we became finalists in a coast to coast vote by our peers for Independent Broker of the year, non franchise and for Sub-prime broker of the year

We end the year much stronger than we started off and the possiblities for the future are now manifold. We all did a great job and we should be proud. There is a feeling that 2008 will be even better. Should be interesting.

Posted: Monday, Dec 24, 2007

First National

A client had very stable income but went through a credit glitch a few years ago. This was combined with the fact that it was a private, non arms length estate sale to add to it. We got approval with First National and they gave they client an excellent rate right from the start. The rate was suitable for a person with perfect income and perfect credit. There were a few challenges to overcome and the botton line from First National was "does it make common sense?" It did a client feels like a million dollars. Clients are excellent, they experienced one temporary problem but now are on track.

Posted: Sunday, Dec 23, 2007

Mortgage Fraud/Toronto Star

December 22nd, 2007 page A1. A good article on mortgage fraud. Landmark ruling. A 90 year old man's home was sold in 2005 without his knowledge by criminals that made up a false power of attourney for him. The mortgage was taken out in the amount of 300,000 and the mortgage holder was HSBC who state they were misled by the people who commited the fraud. The court case took a large toll on the gentleman it was prolonged. The decision by the Ontario Superior court was the first of its kind. The decision found that even a bona fide purchaser can't legally buy a property from a fraudster. The decision found the 300,000 mortgage obtained by the purchasers was invalid. The basis for the transaction was a fake power of attourney document forged by the criminals. HSBC lawyers argued unsuccessfully. They said the mortgage was above board and valid. The bank should have ensured there was a valid power of attourney. They should have done more due dilligence.

Lenders in general have been very wary of power of attourney docuements. When power of attourney is present there is a very high correlation of fraud. I think this is the first time a bank has been found to be on the hook for this problem. It will mean the lenders will tighten up again agaist POA docs.

Posted: Saturday, Dec 22, 2007

Fair Mortgage Solutions: Finalists!

Today we were told that we had become finalists for Canadian Mortgage Professional magazines:

(1) Independent mortgage broker of the year for Canada. (2) Subprime mortgage broker of the year for Canada.

The gala awards will be held February 29th. You are nominated by your peers coast to coast and we are very honored and very shocked. To us it is a very big event. We don't know what to say. Everyone working together has made it all come about. We are all very proud of what we have done.

Posted: Friday, Dec 07, 2007

Rentals with Numbered Company

You can buy a rental with a numbered company. There are a few good options which provide good LTV and excellent rates. Credit and income must both be good. We require fairly minimal information. This program applies to both purchases and refinance.

Posted: Friday, Dec 07, 2007

Insurance: Title Insurance CMP Magazine/November 2007

This is obtain through your lawyer. Most lawyers recommend it. It costs between 200-300. The amount of real estate fraud is on the increase and this helps protect you. It protects against real estate fraud, defects in title of a property and errors and ommissions. It can eliminate the need for a survey and speeds up the closing process. Some lenders insist on title insurance as an extra measure of protection. It is a good product and everyone gains.

Posted: Wednesday, Dec 05, 2007

Insurance: Creditor Life CMP Magazine/November 2007

Creditor life insurance applies should you die or become disabled. It is insurance that is paid by the client so that the mortgage is paid off in the eventuality that the client passes away. It is usually a fixed payment amount on a declining mortgage balance. A mortgage broker can provide creditor life insurance to clients but not term or whole life policies. Creditor life can protect you against critical illness, diability and death. A bottom line is that no matter what route, a client should be covered for insurance in case something happens.

Posted: Wednesday, Dec 05, 2007

Insurance: Mortgage Default CMP Magazine/November 2007

This can be CMHC or Genworth or AIG or several others that have just joined. When a client puts down less than 20% it is considered a high ratio mortgage or high risk and the lender gets the above to insure the mortgage so that if the client default, the insurer (CMHC for example) cover the bank for the cost. This insurance is paid by the client for the benefit of the lender. Some lenders have their own brand of insurance, they self insure and it is somewhat less competitive. Mortgage default insurance is normal and straightforward. The choice of which insurer is used is technically up to the bank involved.

Posted: Wednesday, Dec 05, 2007

TDSR requirements and GE story

The TDSR is a measure of the cost of your home plus the cost of your credit bureau debts such as loans, leases, lines of credit, credit cards etc. In general, 40% of your gross combined income or less, should go to pay these items. It is an easy equation to figure out. If your ratios go between 40-45% that is a little bit more stress but doable. If above 45% that gets alarming. We had a client a few months back where they required a solution. We gave them a solution of a GE Money refi that takes the existing mortgage and most of the debts and makes things very affordable. We got the TDSR coming in at 41-42% where it was 58% currently. The client said this was good and we went ahead. GE was an excellent option. Client then consulted someone and they came back and said they wanted a private second mortgage to eliminate 1 debt which was bothering them. We said that it was no problem to do that but it did not make sense. The key aspect was to get affordability in line. By eliminating one debt with a second mortgage and leaving the other debt the TDSR was about 58%. Client insisted on this route and we explained that if the client were to sell the home quickly, a second might be route to go but that if they wanted long term peace of mind, that the GE route was the way to go. Client went with the second and then we found out yesterday that she was redoing the whole mortgage. The lender that was chosen was vastly more expensive than GE. The problem may have been that the client believed our advice on the first mortgage was not as good as what she had been told, she went her own way and in our view she protracted the situation and cost a lot of money and time for herself. She ended up going a route that was not what we would think is appropriate.

Posted: Thursday, Nov 22, 2007

Bridging

A client required a bridge loan recently. Between selling their current home in South Western Ontario and buying their new home in the area, the amount being put down was about 7.5%. Some banks require a mimimum 10% to bridge but the bank involved here looked at the overall profile and said not a problem. Most of the bridges we have done involve a fair bit of equity but this was one where the client choose to put down 7.5% and use the balance for their own purpose. Client exceptional and bank recognized that.

Posted: Thursday, Nov 22, 2007

The Framed Picture

A lender was kind enough to give us a framed enlarged blow up of a magazine article. It is "BIG" very big. We placed it in the board room/signing area at the end. Funny enough the client feedback has been extremely good, it makes them feel confident about our abilities. Thank you Moe and Moneyconnect.

p.s. November 22nd, the feedback by clients and bank managers on picture is universally positive. We are gradually "getting over" it's size and our modesty.

Posted: Saturday, Nov 10, 2007

The Passionate Eye - A Must Read

October 29th, 2007 Passionate Eye documentary made by Australian TV. This was fascinating. Have put down rough notes on the content then a comment on a few things from our perspective at the end. This can be viewed by going on You Tube.

"MORTGAGE MELTDOWN"

The subprime crisis in U.S. Almost anyone could borrow money. Crisis is just beginning. U.S. auctions on foreclosed houses getting 30-40% less than prior value. Value drop in U.S. largest since 1941, WWII. Two million Amercians will lose their homes because of this crisis. Subprime problems in U.S. have caused panic in world wide markets. A worldwide recession in now threatening. Biggest credit crisis since 1929. Homeowners in U.S. felt their home was sure thing, a good gamble. Many homes doubled in value. A ton of money made by realtors, lenders, brokers and lawyers. Professor from Yale predicted Dot com bubble and predicted mortgage crisis 3 years before it hit. States that problem stems for 9-11, Federal reserve cut rates encouraging lenders to lend and it was cheap money. Even clients scoring a low as 500-525 were granted mortgages. Lenders encouraged clients to refinance and pay credit cards, take vacations or do home improvements, unlock the equity in your home (today in Canada we still hear radio ads appealing to this, it is a totally amoral thing to do because your appealing to materialism and greed that will end up hurting the client badly). Subprime is defined as not top quality, bruised credit. Rates to 16% NINJA LOAN: No income, no job no assets required. LIAR LOAN: A piggyback 100% mortgage based on someone lying to get it. Cleveland Ohio now foreclosure capital of U.S. a tidal wave of foreclosures. 10,000 vacancies and power of sale up 300% TICKING TIME BOMB: ARM mortgage or adjustable rate mortgage. Low intro teaser rate for 2-3 years then you get hit with huge rate increase in 2nd half of mortgage. 2 million of these mortgages are converting soon. Some go from 8% (which is high by our standards to 13%) Many brokers and lenders did not explain. These subprime mortgage parcelled up and sold on Wall Street via hedge funds. Everyone collected fat fees. Mr. Satyajit Das gave a good perspective on whole thing. He wrote "Traders, Guns and Money" 85% of world capital flow is Europe, Middle East and Far East flowing into U.S. and heavily into mortgages therefore a problem with U.S. mortgage market will effect worldwide. August 2007 was first mortgage shock to markets. Credit described as lubricant, like oil, an engine needs oil or it will seize and that it what we have in some markets. Could effect GDP growth, unemployment and the whole economy. Long term might have dramatic effect on how we spend money, if last number of years was artificial we might have to adjust to new reality. Started with a Bear Stearns hedge fund, fund found to have lost 6% then 23% then it vaporized. Caused cascading action with all funds. Big sell off in August. Many billions lost. With Hedge funds the risk was diffused. With normal lending you have the bank lending to the client. Banks are strong, transparent and regulated. Hedge funds are unregulated, not transparent and hidden. By wrapping mortgages and selling in this market the problems were hidden from view. Predatory lending mentioned. They should also mention predatory brokers which go hand in hand. Clients felt scammed and cheated and misled. African Amercians 5x more likely to be victimized. Brokers would get higher pay to route a mortgage to subprime. Brokers incented to defraud clients. American capitalism. A peak in ARM rollovers is September 2007 but the biggest peak is March of 2008 and that whole time frame when many come due. Wall Street armed predatory lenders with money. The massive spending spree which fueled U.S. economy may be in reverse now. U.S. is 25% of world economy. It all boils down to greed and fear.

Our take on it. The undewriting criteria has always remained strong. A broker may get higher pay for subprime but you position with the lender that is most appropriate. You get the client the best possible deal and give them advice on how to make the situation better. To get a person a mortgage when they cannot afford is hurting the client, the lender and yourself. It will blow up in your face. Our banks deserve credit for being strong, we may complain about bank profits but thank god they are strong and transparent. It is a shame that we get some fallout from this U.S. problem, it seems unfair. On the whole Canadians are well served by lenders and brokers. A worry is the amount of spending, it may be wiser for a client to budget and live within their means rather than use credit to create an artificial world. It artificial and painful.

This was a very interesting show that is for sure.

Posted: Tuesday, Oct 30, 2007

Irene Perri

We learned that Irene has passed away suddenly. Irene worked at Scotia Bank, the Golf Links branch in Ancaster. She was always a pleasure to deal with, very warm, very professional. Our sincerest condolences to her family on their loss. She was a very fine person. It comes like a bolt out of the blue. We are in shock.

Posted: Tuesday, Oct 30, 2007

Realtor Ethics

A few weeks back we got a call from a realtor. He said that he heard we had a good reputation and wanted to come down and meet. We did and it went well, he thought we were professional and knew our stuff. He told us about a client he had where the client had dealt with another mortgage broker and it went badly and the broker couldn't get the job done. The realtor brought in the clients and they seemed like solid people, we got them three options to get the deal they wanted. The realtor and the clients were delighted. The realtor then asked if I could email the options to him. This was an unusual request but it also covered us off because it outlined everything. The realtor also said NOT to contact the client in any way which was very unusual, that really raised red flags. The realtor called Friday and said that an offer was made last week and they gave it to the other broker (presumably with our notes) and the other broker failed again. The realtor begged us 4 or 5 times to do the mortgage. We refused to do the mortgage on any grounds. Our thinking was the conduct of the realtor was beyond unethical after the long story he had given us. He chose to take a route that was unethical and unfair and the client suffered. By the realtor taking this approach, he will suffer in the long run. The three options we got were from lenders who know our relationships and knew our approach to helping clients, therefore they were willing to bend on a couple of issues. If another broker sent the mortgage in, the same might not be the case. We feel very used by this realtor. It would have been much better if we didn't know how badly he treated us. Ignorance would have been bliss. You live and learn but can't take it too much to heart. There are some people out there who do awful things but for every person who does that, there are many who do the opposite and restore your faith.

Posted: Sunday, Oct 28, 2007

CMHC Rental Change

CMHC are coming out with changes to the rental policy. The policy will now be quite different from Genworth or AIG. This is from a National Post article on Saturday October 28th. Article states that CMHC are going to allow people to buy their first, second or even third income property with no money down. Prior they requested 15% and Genworth needed 10%. CMHC may be moving into risky territory. In normal residential the risk can be pretty clearly outlined but in rentals, it is another beast. A person would much easier default on an income property rather than their own current home. The insurance fees are very high, so high that it is a big deal. The idea of doing a first and second prior was considered wise. It may look even better to have a small downpayment rather than go the CMHC rental route. There is a general pullback on the subprime side due to risk and yet at the same time CMHC are going full bore into this territory. An interesting comment was made at the end of the article. Benjamin Tal of CIBC World Markets says that the "genie is out of the bottle, this mortgage market is starting to move. Over the past 16 months we've seen more changes than the past 30 years." Incredibly true. From a mortgage specialist POV you don't know what will come next.

Posted: Sunday, Oct 28, 2007

Relentless U.S. News

The U.S. news is a non stop tale of woe. It is relentless and it is constant. It may be accurate but it has the unfair action of dampening real estate confidence in Canada. The latest is that the head of Merrill Lynch in New York has lost his job as CEO after losing 5 Billion + in bad lending. O'Neal if first prominent exec to lose his job but it is just part of the incessant drum beat of negativity. It is a great shame that this casts a pall on Canada and the world as a whole.

Posted: Sunday, Oct 28, 2007

Three for Three

Well we have had pretty good success in getting three good people, three good jobs. Maybe we should quit mortgages and become HR staff. All three people have outstanding skills but in this day and age, it can be hard to get work. We helped all three along and we are sure they will do fine. Each of them now owe us lunch!

Posted: Tuesday, Oct 23, 2007

Editiorial Board

Graeme has been asked to join the Editiorial Board of Canadian Mortgage Professional magazine.

Posted: Tuesday, Oct 23, 2007

Credit Errors

Credit errors can occur on your bureau. Both Equifax and TransCanada are good but we notice that "mixing" of bureaus can take place between father and son and mother and daughter. Even is DOB and SIN is totally different we have seen where they seem to merge them because they may have once lived together. It rarely occurs but does happen from time to time. Getting a copy of your bureau and reviewing for accuracy is important.

Posted: Monday, Oct 22, 2007

Dr. Phil Barrette/Counsellor

Dr. Barrette seems to have a reputation of giving clients good advice on problems. We here a lot of anecdotal success stories where he has helped people. He is on Wilson Street in Ancaster, near Sulphur Springs road, the phone number is 905 648 0360. We have heard some terrific things about him

Posted: Monday, Oct 22, 2007

The Five Love Languages

Hey, we should be marraige counsellors. Another past client called this afternoon to ask about suggestions on tuning up a marriage. Our suggestion based on feedback we here is: The Five Love Languages by Dr. Gary Chapman. Website is www.fivelovelangages.com People say that the ideas can be used easily but they a first take people by surprise because they didn't know what they were not doing correctly. Also recommended a counsellor in Ancaster, Dr. Barrette who has also had amazing success with clients. 905 648-0360. Those two avenues were both very good suggestions to get things back on track.

Posted: Monday, Oct 22, 2007

Love Languages

A number of years ago we did a mortgage for a client through Scotia. Clients married a long time but they broke up and moved to apartments. Mrs. X called and explained that had seperated and this was about 7 months ago or so. We recommend a book called the 5 Love Languages which goes on to explain that couples can have 1 of 5 methods of communicating and to know the others love language is key to getting along. We recommend the book and last night did a pre-approval for BOTH of them, glad to see them together. Geez, mortgages and marriage counselling in one package. ha ha ha. Good to see them together.

Posted: Friday, Oct 19, 2007

Trusted Advice

We take it for granted sometimes, we give our clients the best possible solutions and list them in order of priority and their pros and cons. We can give suggestions and cut through all the lingo, just straightforward good advice that helps the client in the short term, medium term and long term.

Posted: Wednesday, Oct 17, 2007

Patrick

Patrick won the award for top performance in terms of sales and in terms of customer satisfaction for the month of September 2007. It was a stellar performance and he has done a lot for his clients and for all of us. He is a great person.

Posted: Wednesday, Oct 17, 2007

U.S. Mortgage

A client called to ask if we do U.S. mortgages. We don't. We have done 4-5 mortgages over the years for this client. The dollar is low and prices and depressed in Florida, our sense is that things will start to turn around once a new U.S. president is in place. There should be a surge of confidence. In the back of our minds is how the U.S. economy will perform and global warming, that is also an issue buying in a hot climate and close to the water.

Posted: Saturday, Oct 13, 2007

Helpful Advice

A client from seven years ago called for advice. We originally advised the client to go with a 5 year fixed, 25 amortization at fully discounted rate. A number of years into the mortgage they wished to refinance to pay some cards, we re did the mortgage, paid of the credit cards and re amortized for 15 years, their GDS/TDS were very low. They have subsquently knocked the stuffing out of the mortgage. They wish to know what else they can do to make things better and we are advising going with a Scotia STEP product which would give them the flexibility on going, that they need. They are doing text book well and we are very proud of them.

Posted: Saturday, Oct 13, 2007

Second Mortgage

A client asked me what a second mortgage and for a second I was taken aback, a second is a tool that is used in mortgages you don't give it a second thought. Here goes. A second mortgage is a mortgage put behind a first mortgage. For example, say a home worth 200,000. If you were buying this home you can arrange a mortgage of 75% or 150,000 and say you only have 15% down, then the gap of 10% or 20,000 can be arranged. Advantage is there is no CMHC fee involved, it is conventional and by using a second you can bypass the normal strict guidelines of income source and credit rating. A second gives you wide latitude. Downsize to a second can be that the interest rate is quite a bit higher but this is only on a sliver of the total amount. A big factor is whether a financial institution or a private lender will do it. If a private lender is involved the fees and expenses are usual quite a bit. Most of the seconds we do are for strategic purposes, there has to be logic to it. Seconds can also be used to refinance while preserving the first intact or as a defensive move. Seconds have a mixed reputation but the reality is they can serve an invaluable purpose. If a second is part of a good mortgage specialists tool chest, it is an invaluable asset. The concept of win-win-win really comes out, it must be readily apparent and understandable that it is a good way to go. Second mortgages have resulted in countless clients being helped out and can be invaluable. Most of the seconds we do are 1 year or open because they are designed to be closed out fairly quickly, they are not meant for long term use. If it long term then something has gone wrong.

Posted: Wednesday, Oct 10, 2007

More Subprime Woes

The subprime problems we have in Canada are a sideswipe from the U.S. Yesterday a major source of second mortgages to the brokerage community has halted activity. They are downsizing and pulling back. At the current momennt there is a void opening up between the prime market and subprime and private. Many are wondering how long it will last. Some say it is permanent, others say 3-6 months and it should correct itself. In Canada we have not had the wild policies that the U.S. has had, it is a shame that we are being effected.

Posted: Wednesday, Oct 03, 2007

Exciting Time

These are pretty interesting days for us. Things are growing and doing well. We owe you, our clients a large debt of gratitude. Any suggestions you have on making us better, would be most gratefully received. We thank you all.

Posted: Wednesday, Oct 03, 2007

Hooper Maneouver

Robert Hooper 289 237 0797 has invented a new way of doing mortgages. It is an innovative concept. The bottom line is getting things done, effectively and with high customer satisfaction. We have all tried it and it works well. Hat's off to Robert

Posted: Monday, Oct 01, 2007

Rate Drop

Rates have moved down .05% to 5.79-5.74 depending on lender. Underwriting criteria on "A" work if fairly stable but on equity and "B" work it has tightened in terms of LTV and rate.

Posted: Monday, Sep 24, 2007

Current Activity

Activity across the board is good, prime mortgages, subprime, equity, privates and seconds are all good. Many people say they are slow but we are keeping very busy and look posed to expand. The future looks good.

Posted: Thursday, Sep 20, 2007

Divergence

The U.S. market and Canadian market seem to be separating rather than operating in lock step. This is terrific for us, our economy is good, the fundamentals are there, we have the oil and resources, the unemployment rate is low and the financials are good. Our dollar continues to climb mainly because the US dollar is spiralling down. The fact that we are not quite joined at the hip with the U.S. is good because we don't want to get dragged down into there mess.

Posted: Thursday, Sep 20, 2007

Shakeout

The prime market continues well. The subprime lenders here in Canada seem to have a mixed result. Some have tightened up a bit, others have tightened up to the point of not doing any work and there are those that have pulled back entirely. Again, I think the Canadian market is different from the U.S. and it is a shame that we are sideswiped this way. The private lending market has taken a dramatic upturn filling the void that subprime lenders used to fill. Private lending will probably be strong until the normal subprime comes back and takes its place.

Posted: Thursday, Sep 20, 2007

Credit Re Bound

We have had quite a few clients lately who have followed our advice for credit re build and they have achieved dramatic results. The most dramatic being the fact that they now have tremendous flexibility and an ultra low mortgage payment. Ask us for our credit re build sheet.

Posted: Monday, Sep 10, 2007

1933 and F.D.R.

When FDR became president there was an immediate bank crisis, a bank run. It was national in scope and was serious. This was March of 1933. He got elected in November 1932 but back then they took office in March. FDR shut down the banks for a bank holiday of a week, he went on the radio and explained in simple terms what was happening, why and what the government was doing to do to rectify. People responded with calm to his voice over the radio, it made a huge difference. That crisis was much more serious than the one Americans face today. FDR closed the banks for a week then gradually opened up ones which were strong, ones which were weaker waited a bit and they eventually brought in FDIC deposit insurance to further give the public a vote of confidence. This annecdote stems out of a call with a lender yesterday. A key element is leadership, strong, truthful and confident. Again, situation in Canada is much better than US, you can't even compare the two but the lack of leadership or poor leadership at the top is not helping the US. They need to have confidence in their leaders and this may not come into play until November 2008. There could be a real surge at that point. It is a real shame that we are getting sidewiped from US problem which in some ways has turned into world wide problem. Hopefully it will end soon.

Posted: Wednesday, Aug 29, 2007

Debt Crisis tops terrorism as threat to U.S. growth

National Post For the first time since 9-11 attacks on New York and Washington, U.S. economists say terrorismis on longer No.1 threat to the economy. The subprime crisis is now the biggest worry. The meltdown in the US $2 trillion (with a "T")subprime mortgage has led to a bankruptcy of dozens of mortgage firms and is threatening to spill over into the broader economy as more and more homeowners face foreclosure.

Posted: Monday, Aug 27, 2007

Ripple Effect/U.S.A.

ABC News. The U.S. is getting worse. Sales of existing homes continues to drop and the price they are getting for those homes is likewise dropping. Prices have dropped for 12 straight months. Half the U.S. is experiencing price declines, worst situation since Great Depression of 1929. Many Americans refinanced on regular basis, taking equity out to fund credit cards and it has come full circle. While not as bad, the credit card situation here is not great. Many houses have higher mortgage than house is worth. Credit card splurge has helped economy but at what cost? Whole U.S. economy might be dragged down. Sharpest drop in consumer confidence in one week in over 20 years. 57% of Americans say economy getting worse.

Posted: Monday, Aug 27, 2007

Credit Trends

The Canadian market, clients and lenders all appear okay. Strong lenders are using the roiling in the market to their advantage, but quite a few others have tightened up on their lending criteria or halted activity altogether. The ABCP problem seems to be having a deep effect, some have said that they have tightened up and others have indictated that they may not be able to fund mortgages in 2-3 months. It appears that most of the large and strong lenders have still kept to the same critieria as before but the smaller, alternate lenders is where there have been quite a few changes. From our point of view, which is grass roots, we have not noticed anything dramatically different but the U.S. problems seem to be having a spillover effect. It is concerning because Canada is in a much better position.

Posted: Monday, Aug 27, 2007

Home Trust

A good article in the Toronto Star on saturday. It stated that the liquidity crisis in some portfolios was creating a buying opportunity and Home Capital was interested. Nick Kyprianou, SVP views it as an opportunity. The reason this was so positive is that Home Trust has always been viewed as smart, aggressive and tough. The fact that they see an opportunity in the mortgage market is very positive, very heartening. The article quotes Home Trust as taking a "retro" or conservative approach to the market, "It's a kind of a '60's way to finance things, but it is working for us." The Canadian market is different from the U.S. market and this is most apparent on mortgage underwriting criteria. Home Trust has been an equity lender who have always taken a common sense approach, they are very tough, no doubt about that but whenever they have done a mortgage with us they have always said "it is common sense for the client and common sense for us." Home Trust is the true definition of subprime, the fact that they view it as a buying opporunity is very positive. They are tough and smart and have a good track record. The article goes on to mention ABCP which Home Trust do not do. Not sure what this means for lenders who do.

Posted: Sunday, Aug 26, 2007

Ottawa Phone Call

We got a call from an assistant to a minister asking about the crisis in the submprime market, what was our take on it and how serious it was. We talked about the subprime conference and what was said there. The TSX has taken a large hit today and that was a worry. Again, the U.S. market has been plagued by: -greed of brokers and lenders -negative amortizations, long amortizations and interest only mortgages -qualifying a client on a variable teaser intro rate instead of the normal rate or the three year posted rate. -no money down mortgages for people with weak credit and self dec income which was fictitious. The Canadian banking system and even the subprime lenders have always excercised good discipline and even in the most wild situations they have always put common sense lending at the front. As much as we like to complain about the banks they have shown fairly good discipline. The onset of the subprime was maybe 6-8 months ago, what has been a big surprise is how the problem has migrated. Initially it was subprime and a minor concern then it grew then it affected prime market, commerical lending and the bond and equity markets and even the performance and profit of home depot and walmart. Canadian banking has always been strong and I "think" it remains so.

Posted: Thursday, Aug 16, 2007

Amazing Ben

A very unusual event happened this week, Ben set a record and we are all in awe. It was something else and we all take our hats off to him. He has given us a challenge we will all try to match. He did a phenomenal job on a challenge. He stuck with it and offered solutions and it ended up a pretty amazing story. We will all re double our efforts. You did super work. -the team

Posted: Thursday, Aug 16, 2007

Change of Course

There has been a lot of positive feedback in how we do our work and what our technical abilities are. It is pretty exiciting. We are on the right track. We will make the changes accordingly but it is fun, very fun. It says a lot for a small Hamilton company to be taken so seriously but everyone.

Posted: Tuesday, Aug 14, 2007

Credit Rebound

There have been a number of examples of huge rebounds in credit scores. A City of Hamilton work gained 160 points in 62 days flat, quite a remarkable feat. A couple in Burlington that we tacked on a second mortgage for 1 year, followed the advice and they rose from the mid 400's to the high 600's in 1 year. Very good work on there part.

Posted: Tuesday, Aug 14, 2007

The Toronto Conference

This conference went very well, held at the Westin Habour Castle. It was a subprime conference and we were asked to guest speak. We outlined our approach plus 4 success stories. There was good involvment by the audeince of questions and it was just a terrific experience. We got a fair bit of work from Toronto brokers in the following days.

It was very very good. Learned a lot. Learned how much we do is right and we are on the right track.

Posted: Tuesday, Aug 14, 2007

Success Stories

We are going to present 4 stories that happened within last few months which were pretty extraordinary and worked out well for both cleint and lender. Two stories involve banks and two involve private lenders. All four are very powerful stories.

Posted: Tuesday, Aug 07, 2007

Subprime Conference/Toronto

We have been asked to be guest speakers for the Toronto subprime mortgage conference this Thursday. It should be exciting and we are simply going to say how we deal with ALL mortgage clients, approach we take, advice we give. Should be a lot of fun.

Posted: Tuesday, Aug 07, 2007

U.S. Credit Problems

The U.S. subprime market continues to have problems. The underlying problem of weak lending criteria in the past is U.S. related and does not seem to be parallel in Canada. We have always had solid underwriting and common sense. In Nevada 1 out of 69 houses is in power of sale and across the U.S. since January there are over 570,000 power of sales. The fact that the subprime market was going sideways was a big concern but what is of greater concern is the impact on the stock market and other credit markets and general consumer confidence. Someone said that 1 in 4 mortgages in the U.S. was subprime. The problem in the U.S. does highlight the differences between the counntries. Again, Canada has always used common sense and is maintaining that position. Lenders that are U.S. owned are showing that since the U.S. has been "bitten" they are assuming Canada is the same way and they are abnormally tightening up. In the U.S. right now they are saying that you may have a challenge getting a mortgage even if your income and credit are perfect. The greed factor is biting them in the rear.

Posted: Tuesday, Aug 07, 2007

Administrator

We are looking for an admin person. Someone either full or part time. Someone with a good memory, diligent about following up on conditions. It would be preferrable to have someone who would like to stay long term. The environment is very friendly and very positive. We realize all the positive qualities that Jackie had and many times we miss that. Jackie is doing well and we wish her the best. Finding the right person is tough, it is hard to know who will work out. Send us your resume if you are interested. Our fax is 905 388 1737.

Posted: Monday, Jul 23, 2007

Transition

It is an exciting time at the company. We are undergoing a change. We are evolving. We are getting good feedback from clients and lenders. In the last few weeks we have hit on some fundamental new ideas which are currently being used, we will try them and see how it goes. The environment is fun and it is better to try and fail than not to try. We will give it a go!

We have had a number of mortgages that have made a deep impact but the latest Dunnville situation went very deep to all concerned.

Posted: Monday, Jul 23, 2007

Dunnville Story

This is a very emotional situation. Client was given very bad advice about 2 years ago. They were fairly clearly taken advantage of. Clients have a number of positives about their situation but they were made to feel bad, their self esteem was lowered. 3 months ago we gave them advice to combine their first and second mortgage together, they were surprised we charged no broker fee for this and gave them good advice. So far, so good. One of the clients suffered greatly from depression and handled the finances and was thus not able to act, the bank in question cancelled the mortgage application because of non response. We phoned client quite a few time and got no response. We then sent a letter to the effect that lender has cancelled mortgage application but it was good working with them and to follow our credit advice and they would do fine in the future. The client opened our letter, was emotional and was worried we would be angry with her. We then got a notice a few weeks later indicating one of the current lenders was going power of sale and they had 2 weeks to vacate. We phoned again, but did not hear back. One of our people, Robert, took it upon himself to go down because the situation was so unusual, effectively the clients were giving the house up the lender when they had so many positives, it seemed like a shame. We all were of the thought that nothing would come of that. When Robert went down the husband was not aware of the problems. The wife had some health issues which were effecting her ability to judge and this put them in a tough spot. Over the last week both clients and ourselves have sweated bullets because it has been so tough to get them out of the power dive into the ground. Today around 1.00 it got resolved with the help of a very prominent Hamiltonian president of a corporation. The clients were given help at the last minute from a lot of sources and they deserved it. We all said a prayer and it was a miracle it got done. We put a first and second mortgage in position but the legals kept adding up and our original figues were blown away. It seemed hopeless. If this situation can be fixed virtually any situation can be fixed. The key element to this is the sincerity of the clients and there many positives. We have advised they get a 1 year term which they have done and we will work with them to re build and really fly on their own by year end. Clients faced two major issues, being given bad advice and then the health issues, it was a double barrelled problem. I think both have a lot of guts. They have issues they have to overcome but they have stuck with it. The sherrif would have removed them Monday if the problem not fixed. It was a very emotional situation for all concerned. They have children. I think this might be the most difficult and most emotional mortgage we have ever done. It is Friday afternoon and we are in a pleasant state of shock. They would have lost the home without the intervention of the company president, no doubt about it. They owe a great deal to him. A number of excellent Hamilton lawyers fought to get this done and we owe them a tip of that hat.

Posted: Friday, Jul 20, 2007

Client with large cards

A client has very good income and equity in there home. The balances on credit cards are very high. We recommended preserving the first mortgage (as it is a very low rate) we will tack in a 2nd to payoff the cards then when the first renews the first and second can be rolled into one and they can reduce the amortization and payoff the house at the same schedule they originally had. Again, the only way it won't work out well is if the clients go and rack up the cards again.

Posted: Wednesday, Jun 20, 2007

Bomb Squad

We are located at Queen Street, near Hess Village. Robert and Graeme and an Steven (an AGF BDO) went for beers and were blocked from going back to work because there was reportedly a suspicious package in front of a hairdressers. The police were there, bomb squad, robot the whole thing. It was later found that the box contained makeup? And they blew it up. They X-rayed it at first and supposedly there were wires etc. It is hard to imagine an al-Qaeda attack down at Hess. It later made the channel 11 news at 6.00 p.m.

Posted: Wednesday, Jun 20, 2007

Toronto Conference

We have been asked to speak at a national mortgage conference in August at the Westin Habour Castle. It will focus on subprime lending and we will profile some examples of extraordinary service rendered by lenders to clients who have equally done well. The key is common sense. Everyone must gain and the client must have a roadmap to success.

Posted: Wednesday, Jun 20, 2007

CMP Magazine

We were profiled in CMP, Canada's independent mortgage trade magazine. The article was very good, it was headlined with "common sense lending" and mainly highlighted a deal done for Remax Toronto for a client who needed 95% financing. The mortgage was done through Moneyconnect, a relatively new lender which has just expanded to Montreal and Calgary. We wish them very well, they truly did an extraordinary job of customer service. It was one for the record books.

Posted: Wednesday, Jun 20, 2007

Rates

Rates are continuing to move. For a long time rates have been flat, say around the 5.10% for the 5 year fixed benchmark. They have currently risen to 5.79% and will probably rise again shortly. The Canadian dollar gaining strength is driving the rates higher. They anticipate dollar parity near year end and the rates may climb steady with that movement. It is good to lock in now while rates are lower.

Posted: Thursday, Jun 14, 2007

Rate Hikes

Rates have gone up twice back to back. The Canadian dollar is getting stronger and stronger against the U.S. dollar. When this occurs there is an excellent chance that rates will hike up. They hiked up to 5.45% (5 year fixed) and will probably to to 5.75% shortly.

Economics is very complex and many times it is hard to predict very accurately when/how much rates will move but the dollar weakening/strengthening is a good indicator.

Posted: Wednesday, May 30, 2007

Patrick

Patrick has been with us for close to one year and does an excellent job. The customer satisifcation surveys come in the highest for the group. We are proud that it is overall very high but for Patrick it is close to perfect.

The role he plays is invaluable. You name it and he can do it. You could not ask to work with a better person He is great. So is his advice!

Posted: Wednesday, May 30, 2007

Advertising

We are changing our advertising a bit. Less information and more graphics.

The volume of work we get from past clients and others is very high, we are doing this more as an experiment, just out of curiosity to see what happens.

Should be interesting.

Posted: Wednesday, May 30, 2007

Customer Service!

A client had a very unusual situation. They have a TD first mortgage which was in arrears. Because the lawyer may have mis-registered the home TD could not go or were delayed from going power of sale. The client went into arrears then the bank wished the whole thing be made good, which client couldn't do. The reason why they went into arrears is complex but the situation now is solid.

They were 24 months of arrears which was shocking but situation is fixable. We are preserving TD first, tacking in an open second then at a later date combining the two together to get the client one low payment.

Client amazed that their home is preserved.

Posted: Wednesday, May 30, 2007

Very Very Proud

We have had a wonderful week. Each and everyone of the team has put in incredible work and made us all very proud. Ben, Patrick, Robert and Olessia, you have all done great work. The pride extends not only to our people but companies and individuals who have provided help and expertise to us along the way, we owe them more than we can ever say. It has been a very good week. We may be small but we are very professional and putting the client first, makes for repeat business, makes the client happy, makes us sleep well at night and gives the lenders a high level of confidence.

Posted: Thursday, May 10, 2007

Busy Week

It has been a very very busy week. The volume of work has been surging and we are lucky we have the people to cope with it. It is coming in equal parts of new work and past clients, the volume of past client work is high and it is quite gratifying. Some lenders in particular have really done incredible work this week in providing a high level of customer service, TD Canada Trust and GE Money stick out along with HSBC. The customer satisfaction surveys continue to pour in and we are scoring 80-100% on all categories, the legal category is getting stronger. It is scoring 80% where before it was getting in the 60% range.

Posted: Thursday, May 10, 2007

IMBA Conference II

We attended the conference. What stood out fairly dramatically is for a small company, which Fair Mortgage is, we are held is pretty high regard both by lenders and competitors. IMBA is a great organization that is based more on the grassroots and helping the whole industry. Everything they do is focussed on helping the broker and the client and raising standards. We do not have that much contact with day to day but what we do is impressive. Before the company started in October 2005 we visited a very successful IMBA member to ask for advice/opinions. His name was Sham Kaushal and he was based in Toronto and what we found is he was very generous and giving off his time eventhough he did not know us. It was a very kind thing and it made a huge difference.

Posted: Saturday, May 05, 2007

GE Money continued

We arranged a mortgage for a client 2 months ago, this was on a previous blog. GE Money initially said no to the mortgage because the Beacon score was in the 490 range then dropped to 460 "BUT" there was logic behind the whole thing. You have to know the whole story behind the client and where they are going and why. GE Money took a calculated risk and it is paying off. The client is very solid and is OVERJOYED to the point he called Thursday to ask what his beacon score was and it had risen to 610 from 460 in 2 months. We had faith in him and we relayed that to GE who did a great thing. Another example of great service.

Posted: Saturday, May 05, 2007

Pinball Clemmons

Pinball Clemmons gave a good speech at the IMBA conference in Toronto. It was very interesting. It was based on trying to find a good solution for the client which would make the client and the mortgage agent very happy. A key message he had was too often people focus on "stuff" and they think that will bring them happiness when in rea