RE:RE:RE:RE:RE:RE:More MBS Are Being Created to get off the banks BSAnd, why do you think rates are going to 4%? If you're saying these Canadians are paying 2%, then they would be on variable mortgages. The current variable rate is still at 2%. Any rate increase be small and slow. No, one is seeing 100% increases anytime soon. But, let's re-visit in 12-24 months.
The US market had rates that were available for a short period and then would go up. We don't have that here in Canada.
If rates go up on renewal, the consumer could look to lengthen their amortization if the increase is too high. As they will have paid down their mortgage during this period as well. So, lower balance = lower payment.
Your accusations have no substance. It is al "what if's".
And, I am saying you can't listen to everything your friend says. But, what lending space do they work in? You mentioned they were working on the MBS's?
rCheung00 wrote: @honestguy86 - no one said a bunch of junk being sold. I am reporting that the banks are now packaging up mortgages and selling some of them off as MBS. And the ones they are selling are 2013-2016 mortgages.
I am just curious why that is the case.
If a 2013 mortgage was say 2% and they refinance in 2018 and it is 4% then that is a 100% increase on mortgage payments - that can hurt a lot of people who likely can't afford that but I guess we will find out in 2018 how these people react. Maybe they can handle the increases.
You said "There are no teaser rates about to blow up in these bonds." - well what is a 100% increase then?
You said "Because your friend answers phones at these places" - not sure what you mean by that. I have friends working exactly in the lending space at these banks and investment banking divisions who are working on these products.
Again, whether the market crashes or goes up - we will find out in the next 12-24 months to see what happens. The real estate market is not like the stock market (which tends to be more transarpent and faster acting).
Honestguy86 wrote: Well for one, the underwriting practices and standards is much stricter in Canada than it was in the USA. Esepcially after 2008. Many Canadian lenders further tightened their lendeing criteria. You may be familiar with B20 & B21 Guidlines? Also, the government made even more changes in October 2016. Introducing a few rules to limit what Canadians could borrow.
The US bond market and mortgage market was not regulated.
The only similarity is that their beind packaged and sold on the open market.
There are no teaser rates about to blow up in these bonds.
So, tell me why you think it is a bunch of junk sold on the market to unssuspected buyers? Because your friend answers phones at these places?
This could be an excllent strategy to help finance future mortgages and help keep rates competitive. Which, will only benefit the end consumer.
But, sure make loose accusations about these being fraudlent. Ignornace at its best.
rCheung00 wrote: @honestguy86 - what do you mean "lol.....you don't know what you're talking about......"
-elaborate on that because yes BMO did sell these MBS and yes other banks are working on packaging them up. First, this is in the public realm and reported if you look. Second, I have friends at some of these banks in this specific sector who are working on it.
Honestguy86 wrote: lol....you don't know what you're talking about......
Tater78 wrote: Did BMO actually sell any mortgages? The idea was floated, but as far as I know, they never did it. Happy to be proved wrong.
rCheung00 wrote: More MBS Are Being Created to get off the banks BS Just like BMO did recently
shows you something is up
publically they say "everything is okay" but behind the scenes they try to secretly offload some of their mortgages and get them AAA rated - seems almost identical to the US and Countrywide collapsed (like HCG?)
this ssh*t scares me