New Rules For EVERYONE!

OkayÉI got a tad long winded on this oneÉget yourself a coffee! Ñ I mentioned not so long ago that the Federal Government had been rambling on about Òthey were not afraid to tighten the mortgage rulesÉAGAINÓ. Well, they have done it. As I am sure by now you have heard Ð there have been some changesÉsome enhancements. Let me first take you on a little journey back in timeÉletÕs go back to 2005. The New Conservative Party was in power and ready to make some changes that would have a GREAT BENEFIT to the future of Canadians. They gave us CHEAP and EASY Money with almost no end to our borrowing power. They gave us an eternity to pay it back too! UP TO 40 YEARS! Not to mention Ð they made it possible for Canadians to buy a home with NO MONEY DOWN (100% Financing)Éand they would INSURE it! But wait Ð it getÕs even betterÉthey permitted that we could ÒSTATE OUR INCOME!ÓÉthat means we could LIE to their facesÉbut they didnÕt care. This was the dawning of NEW ECONOMIC GROWTH! They paraded themselves through the streets as Òadvocates for Free EnterpriseÓ Ð the FUTURE for Economic Privilege for All Canadians! I was a little scared when this decision was madeÉI recall a conversation I had with a new client at that time and we both agreed it was like giving the keys to the family car to the neighbourÕs irresponsible kid! Someone didnÕt do the math. In October of 2007 Ð they (our fearless leaders that is) realized their decision to provide access to this Cheap Money, and the eternity to pay it off, was quite premature and that maybe they (that too would be our fearless leaders) didnÕt do enough research on it. They quickly made a Knee Jerk reaction and did away with the 40 year mortgage and the 100% Mortgage FinancingÉand they started asking for PROOF of our Earnings again. Everyone got in an uproar. EVERYONE! Borrowers, Lenders, RealtorÕs, Mortgage BrokerÕs, Lawyers, etc. At one point I think even our NeighbourÕs irresponsible kid was in the uproar. Even with everyone feeling this ÒBlowÓ to the industryÉsomehow we adapted. Life went on. Then, last April Ð the FedÕs stepped in again and this time they said we couldnÕt borrower 95% of the value of our houseÉwe could only borrow 90%! They also said we could only purchase up to 2 properties that they would insureÉbecause too many people were buying Revenue and Rental properties under the old rules and that was just not fair for them to buy low and sell high! HOW DARE CANADIANS MAKE MONEY?!! SHAME ON YOU! Guess whatÉjust like in 2007 Ð Everyone got in an uproar. Yup Ð even the neighbourÕs irresponsible kid. I hate that kid. But Ð just like beforeÉwe adapted and Life goes on. Most recently the FedÕs stepped in again and said, ÒWe Need To Get Tougher! We Have Done it BeforeÉWeÕll Do it Again Ð WE ARENÕT AFRAID TO TIGHTEN THE RULES FURTHER!Ó. For those of you keeping scoreÉthis was in December 2010. Then in January, while I was away in sunny Orlando (I saw Mickey Mouse!) Ð our Fearless LeaderÕs did it againÉthey said that 35 Years is TOO LONG for CanadianÕs to pay off their Mortgages, and said that 90% is TOO MUCH for CanadianÕs to borrower against their homesÉand also said that ÒLines of CreditÓ are TOO RISKY to be insured. They are now parading themselves through the streets for being Tough on the Mortgage Industry. They have effectively Òmarked their territoryÓ as the Watch Dog on Consumer Spending and BorrowingÉwait a minute. This must be one of those hidden camera TV showsÉthey canÕt possibly expect us to believe that what just happened was a good thingÉTHEY WERE THE ONES THAT SET THE STAGE FOR THE INITIAL DISASTER!! They canÕt rightfully take credit for cleaning up the mess they spear headed. Do they really think we are that Naive?? Apparently so! And can you guess whatÕs going to happen? Let me tell you. EVERYONE is going to be in an uproar againÉeven the neighbourÕs irresponsible kid. But, like before, we will adapt Ð and Life will go on. DonÕt worry Ð weÕll help you along the way.