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Jumpingmanjim posted:Are mortgages like margin loans, like if the value of your house crashed and you went above your original LVR, could the bank make a margin call on your house? They could but they're well aware that this would bankrupt most of their customers. They don't have to do it so many of them would find alternative arrangements or deal with it.
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Dec 11, 2014 13:13
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FrozenVent posted:They could but they're well aware that this would bankrupt most of their customers. They don't have to do it so many of them would find alternative arrangements or deal with it. Pretty much every mortgage signed in the last 8 years or so has this clause built in. Consider a scenario that is not on the same proportion as the US collapse, but rather a squeeze of the over leveraged (who are, as we see in posts above, quite indebt) as interest rates slowly rise. The banks can an absolutely will make those calls on people opportunistically. The bank are the friendliest people in the world until the moment they are not, and then they are really, really not.
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Dec 11, 2014 15:13
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Regarding banks calling your mortgage: why the hell would a bank call a mortgage as long as you're paying it down? They'd be fools to do so. From an income perspective to the bank it doesn't matter what the value of the house is, as long as they get their return on the money they lent you. If they call the loan and foreclose they're stuck trying to sell the house (for much less than it's worth in a depressed market), and banks in general don't like to try to sell foreclosed properties since it's a method of last resort to get something out of your delinquent rear end. Plus they also don't like losing customers, which is what they'd be doing if they started calling in loans. Think of yourself trundling along, paying these assholes every month (or two weeks, w/e) when you get a call from the local banker dude demanding payment. Do you think you'd ever, in a million years, use that bank again? Hell no. Would you bitch to every relative, friend, stranger you meet in the street, etc about how Canadian Bank A hosed you over? Hell yea. As for why the banks have that clause? If they're completely cash strapped they could, conceivably, call in a bunch of housing loans, ruin customer relationships and pay off whatever short term poo poo hole they got themselves in. It rarely happens.
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Dec 11, 2014 16:24
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If I were a bank and I could see that you had cash assets that significantly covered your mortgage, and property prices are plunging, why wouldn't I call your rear end?
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Dec 11, 2014 17:24
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Cultural Imperial posted:If I were a bank and I could see that you had cash assets that significantly covered your mortgage, and property prices are plunging, why wouldn't I call your rear end? What exact benefit would the bank get from this scenario?
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Dec 11, 2014 17:32
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Baudin posted:What exact benefit would the bank get from this scenario? I'm assuming a bank is going to want to meet some sort of new emergency capitalization requirement or reduce its exposure.
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Dec 11, 2014 17:34
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Mcleans megapost on why y'all are hosed. Especially if you're a millenial. http://www.macleans.ca/economy/economicanalysis/the-charts-every-canadian-should-watch-in-2015/ quote:The economic recovery has yet to come for the young. Their employment levels haven’t grown at all, in spite of the fact that more than five years have passed since the recession ended. Some have stayed in school longer, many have made do with low-paying jobs, while others have given up looking for a job altogether. This isn’t a temporary blemish. It’s likely to leave a permanent scar as many young people, through no fault of their own, will eventually be shunted down career paths offering a future of lower wages than they ever expected. quote:
quote:This chart shows the change in youth transitions from school to work. It shows the percentage of Canadian youth (aged 15 to 29) who were primarily “students” and primary “workers” (not in school anymore) by age. The point where those diagonal lines intersect is what the Organization for Economic Co-ordination and Development calls the transition age—the age when more youth are working than studying. The chart below compares that transition point for 1995-96 (the earliest year available) and 2012-13 (the most recent year available). The key thing is that the transition age went up by more than a year in that time period. The longer and later school-to-work transition is real. This may not be a problem in the strictest terms — maybe delayed transitions in youth pay off over the long run in higher lifetime earnings. I don’t think we know. In the meantime, pretending this isn’t happening is probably unwise. Do governments need to make any policy changes (on education planning and finance) to be responsive? quote:Canadian consumers are the most indebted in the world. Lines of credit, home-equity loans, car leases, credit cards, high-ratio mortgages—they’re well versed in them all. The level of consumer debt will make it difficult to attain the growth and employment levels of previous cycles—past purchases were borrowed from the future. Extensive use of leverage will also make Canadian families and the overall economy vulnerable in the next economic slowdown. dear everyone with outsized debts, go die in a fire
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Dec 11, 2014 17:41
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Buskas posted:Well jealousy aside assuming prices actually corrected to a reasonable level I will borrow to buy a home a) because it makes financial sense to do so in lots of situations and b) because I'll live in it for at least 15-20 years and raise my kids there, and if I can get a better house in a better area I'll borrow to have that improvement in my family's life. What are you hoping to achieve by explaining to me that mortgages and home ownership can make sense in many scenarios? No one in this thread denies that, least of all me. This is a conversation about outsized debt loads, a common theme in this country, and the lament about the consequences when it all goes tits up.
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Dec 11, 2014 19:24
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Cultural Imperial posted:I'm assuming a bank is going to want to meet some sort of new emergency capitalization requirement or reduce its exposure. This made me curious how often Canadian banks have called in home mortgages in the past. I can't seem to find any information on this after a few google searches - anyone have data on this?
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Dec 11, 2014 19:42
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If prices crash and we don't lose our jobs I'd absolutely consider buying. Would have to be a ridiculous crash though for any sort of house worth buying sinking to the 250-300k range, which is pushing what we could afford. I realllly like my apartment though. Would rents go down after a crash? Buildings and property are worth less, and also wages have gone down. Do rents ever actually go down or do landlords just stop raising them at best?
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Dec 11, 2014 20:05
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I go past this development's construction site every so often, and always chuckle as I wonder whether there will be cake at their fancy pre-sale event. Apparently their showroom is next to a bakery...
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Dec 11, 2014 20:20
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Baronjutter posted:Would rents go down after a crash? Buildings and property are worth less, and also wages have gone down. Do rents ever actually go down or do landlords just stop raising them at best? Reverse the thinking on building/properties being worth less therefore rents going down. It's generally the rents (income) that dictate the value of properties, in conjunction with capitalization rates (which literally link income with the price of the property). Say you have a 1 bdrm suite in a small 6 bdrm apartment, all 1 bdrm suites. You pay $950 per month, plus power, as does everyone else [this never happens]. For the landlord that means they get $5,700 per month, $68,400 annual gross income. Subtract costs associated with running the place, taxes, utilities, insurance, vacancy, repairs, on site admin and property management fees. A 6 bdrm apartment I valued recently had annual costs of about $25,000 per year. That gets you a total of about $43,400 net income. Capitalization rates are about 6% (or less depending on the area) where I work, so divide 43,400 by 0.06 and you get $723,333.33 If you reduce the income per unit because people have more than 2% vacancy suddenly your income goes down, which on the same capitalization rates means the value of the property goes down. It doesn't work the other way.
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Dec 11, 2014 20:26
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Baronjutter posted:Do rents ever actually go down or do landlords just stop raising them at best? Rents rarely if ever go down for existing tenants, but they sure go down in the marketplace for new tenants if there's excess supply.
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Dec 11, 2014 20:26
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That post is probably directly related to working a bunch of 12 hour days in a row trying to clear my plate before christmas. drat.
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Dec 11, 2014 20:28
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I'm glad my parents' house is paid off (my dad paid off the 25 year mortgage through singlemindedly paying it over about 5 years, in the early 90s), and fairly well built and maintained. I think they're gonna be there a while. Hell, I might too.
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Dec 11, 2014 20:35
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Baronjutter posted:If prices crash and we don't lose our jobs I'd absolutely consider buying. Would have to be a ridiculous crash though for any sort of house worth buying sinking to the 250-300k range, which is pushing what we could afford. I realllly like my apartment though. Rents can plummet in a crash if it cuts demand for new housing. The small amateur landlords might resist dropping their prices but the big management companies know that an empty unit is orders of magnitude worse than one paying cheap rent. It is especially bad because for the first few years of the crash new stock keeps getting added as projects which were started at peak mania complete. I have a buddy who was here in Austin post dot-com implosion and they were offered a 30% cut in rent and three months free to sign a new 13 month lease.
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Dec 11, 2014 21:07
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melon cat fucked around with this message at 05:33 on Mar 16, 2019 |
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Dec 11, 2014 21:08
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Shifty Pony posted:Rents can plummet in a crash if it cuts demand for new housing. The small amateur landlords might resist dropping their prices but the big management companies know that an empty unit is orders of magnitude worse than one paying cheap rent. It is especially bad because for the first few years of the crash new stock keeps getting added as projects which were started at peak mania complete. My landlord seems to really like us and says we are model tenants, maybe I can negotiate a rent decrease or at least freeze after the apocalypse. Maybe I can pay him in scrap wood to burn in the rusty steel barrels we'll be using to heat the building?
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Dec 11, 2014 21:12
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Baronjutter posted:My landlord seems to really like us and says we are model tenants, maybe I can negotiate a rent decrease or at least freeze after the apocalypse. Maybe I can pay him in scrap wood to burn in the rusty steel barrels we'll be using to heat the building? If apartment rental vacancy rates in your area are over about 6-8% you should call around to see what other people are charging and talk to your landlord about what your options are, especially if you like staying there.
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Dec 11, 2014 21:16
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The only thing I'm looking forward to in a market collapse is that people will no longer afford to clog up all the marinas with these half-sinking wrecks which haven't left the dock in a decade. Then slip rentals can decrease to rates which the average person can afford, making liveaboard a viable option in Vancouver again without the risk of getting blown onto Kits Beach. Some of the deathtraps moored in Burrard Civic, my god. 
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Dec 11, 2014 21:32
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Rime posted:The only thing I'm looking forward to in a market collapse is that people will no longer afford to clog up all the marinas with these half-sinking wrecks which haven't left the dock in a decade. Then slip rentals can decrease to rates which the average person can afford, making liveaboard a viable option in Vancouver again without the risk of getting blown onto Kits Beach. Bubble or crash, cyberpunk capitalist dystopia or maxist paradise, living on a boat is always going to be a pretty dumb move. That said I'm looking forward to your post-collapse floating commune made up of lashed together abandoned yachts.
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Dec 11, 2014 21:39
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Dec 11, 2014 21:43
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Baronjutter posted:Bubble or crash, cyberpunk capitalist dystopia or maxist paradise, living on a boat is always going to be a pretty dumb move. That said I'm looking forward to your post-collapse floating commune made up of lashed together abandoned yachts. Nil problem, chummer.
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Dec 11, 2014 21:47
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FrozenVent posted:They could but they're well aware that this would bankrupt most of their customers. They don't have to do it so many of them would find alternative arrangements or deal with it. I think the real red line here, is when these mortgages come up for renewal in the next 2-5 years. If your house no longer meets lending criteria, you are going to be writing a cheque you cannot cash.
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Dec 11, 2014 23:32
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You still owe the money if the sale of the house doesn't cover the loan. I have no interest in ever going to much less living in Vancouver and I wouldn't want a house in Vancouver if it was free, so whether the price goes up or down has no meaning to me other than Vancouverites are awful and watching them suffer(because what else is there to talk about in that shithole?) is hilarious so gently caress them.
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Dec 11, 2014 23:50
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I like the cut of your jib.
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Dec 12, 2014 00:16
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I don't know I'd take a free house especially if it meant I could cackle at condo owners from close by.
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Dec 12, 2014 01:02
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Ceciltron posted:I don't know I'd take a free house especially if it meant I could cackle at condo owners from close by. You could always turn it into a hospice or a homeless shelter. Quite apart from the good it'd do - just imagine the fury from the neighbours!
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Dec 12, 2014 01:07
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Lexicon posted:You could always turn it into a hospice or a homeless shelter. Quite apart from the good it'd do - just imagine the fury from the neighbours! Hospitals cause ghosts! This drives away mainlanders like nobody's business, and could start a real property value spiral.
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Dec 12, 2014 01:10
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Cultural Imperial posted:Apart from Montreal, the rest of Canada needs to be cleansed with fire. If you're going to travel, save your money and go somewhere worthwhile. ie, leave Canada. Montreal being where you live or something? Doesn't seem like sunshine and rainbows town.
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Dec 12, 2014 01:15
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Ceciltron posted:Hospitals cause ghosts! This drives away mainlanders like nobody's business, and could start a real property value spiral. Have you even seen how distraught family drive when they're dropping people off at a hospice? I don't want that danger in my neighbourhood.
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Dec 12, 2014 01:18
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Count Roland posted:Montreal being where you live or something? Doesn't seem like sunshine and rainbows town. It has its share of problems, some common, some unique - but it's easily the best city in Canada, and one of the best on the continent.
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Dec 12, 2014 01:23
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Lexicon posted:It has its share of problems, some common, some unique - but it's easily the best city in Canada, and one of the best on the continent. Also other cities don't have Pussy Corp.
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Dec 12, 2014 03:49
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Toronto is okay, we're just always run by assholes and only assholes live here.
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Dec 12, 2014 15:11
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peter banana posted:Toronto is okay, we're just always run by assholes and only assholes live here. It took some getting used to moving from Montreal, but it's not a bad place to live.
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Dec 12, 2014 16:30
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Well, I'm fond of Halifax, but then I'm not a fan of cities that are much larger, and my job is kinda directly linked to the city, so I'm kinda stuck here, I guess.
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Dec 12, 2014 17:02
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http://m.theglobeandmail.com/globe-investor/inside-the-market/top-links-bring-on-the-corporate-debt-defaults/article22061006/?service=mobilequote:
be still my beating heart
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Dec 12, 2014 17:31
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http://business.financialpost.com/2014/12/12/cmhc-to-hike-issuer-fees-and-mortgage-rates-could-follow/quote:Canada Mortgage and Housing Corp. is tripling the fee it charges some financial institutions to guarantee loans in the mortgage-backed securities market, a move that could end up costing consumers more, the Financial Post has learned. 
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Dec 12, 2014 17:40
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Cultural Imperial posted:http://m.theglobeandmail.com/globe-investor/inside-the-market/top-links-bring-on-the-corporate-debt-defaults/article22061006/?service=mobile we're going to need a solid criterion for when we can post that ronpaulitshappening.gif
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Dec 12, 2014 17:43
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peter banana posted:we're going to need a solid criterion for when we can post that ronpaulitshappening.gif When Vancouver and Toronto Months-of-inventory exceed 2008 levels.
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Dec 12, 2014 17:58
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