Jul 21 | 2017

What We Can Learn From Toronto-Dominion Bank v. Currie

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What we can learn about fraud from Toronto-Dominion Bank v. CurrieTo what extent will a private lender be bound by the actions of a mortgage broker working on its behalf?  Will Canadian courts deem the broker to be an agent of the lender?  Will this apply even to fraud committed by the broker?  Earlier this year, in the case of Toronto-Dominion Bank v. Currie, the Alberta Court of Appeal issued a decision on precisely these questions.

Currie was a private lender who used a mortgage broker, Fuoco, to handle some aspects of his mortgage lending business.  In this case, Fuoco arranged for Currie to lend $220,000 to the Craigs, and Currie provided them with a mortgage for their property.  The mortgage instructions stated that all communications regarding the mortgage were to be directed to “DAN CURRIE c/o Fuoco Holdings Ltd.”

Following a default on the mortgage, the Craigs arranged new financing with TD Canada Trust.  The bank’s lawyer wrote to Fuoco requesting a payout statement for Craig’s mortgage.  Fuoco prepared a payout statement for Currie to sign, showing a balance owing of $249,992.55.  For reasons that are not clear from the court’s judgment, Fuoco did not provide this figure to the bank’s lawyer, but instead provided a different payout statement, showing only $75,000.00 as being outstanding, and directing the payout funds be made payable to Fuoco.  Upon closing, the bank’s lawyer sent this amount to Fuoco, who escaped with the funds, never having provided a discharge of the mortgage.

The Court of Appeal had to decide which of the two innocent parties, Currie or the bank, should bear the cost of Fuoco’s fraud.  The Court concluded that, by using Fuoco’s services in his lending business, and allowing Fuoco to receive communications and prepare mortgage payout statements on his behalf, Currie had given Fuoco actual authority to act as his agent, and therefore it was Currie who had to bear the loss resulting from Fuoco’s dishonesty.

This case highlights some important considerations for mortgagees and their lawyers.  When acting for an incoming lender, lawyers should always ensure that they purchase title insurance.  What looks like a valid payout statement or discharge could later be challenged by the previous mortgagee itself. Even if, as in Currie’s case, the new mortgagee is ultimately successful, there can be considerable time and money spent on litigation.  Lawyers should also consider adopting the practice of insisting on having an executed discharge from any outgoing private lender in hand prior to closing.  This is already standard practice in some parts of Canada, and goes a long way toward reducing confusion and risk following closing.

While in this case, it was the mortgage broker who committed the fraud, there are other cases in which it was the lawyer or even the borrower. There are measures that brokers and borrowers can also take to ensure they are not involved in a fraudulent transaction.

Mortgage brokers can protect themselves from fraudsters by verifying all the information provided by their clients. For instance, it is a red flag if their salary doesn’t make sense for their stated occupation. Borrowers can ensure that they purchase title insurance so that their legal costs will be covered if they ever have to defend their title. It will also protect them from a host of other issues such as survey or title defects.

Everyone involved in a real estate transaction has the responsibility to protect themselves from fraud.

How do you make sure that you’re protected? Share it with us in the comments section!

Nov 29 | 2016

How Jay Seabrook Co-built the Financial Literacy Revolution in Canada

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financial literacyAs you may or may not know November is Financial Literacy Month (FLM) in Canada. FLM is led by the Financial Literacy Leader, Jane Rooney, and promotes the cooperation of organizations to improve the financial literacy of all Canadians at any age. For those of you that are unfamiliar with the term, financial literacy refers to the knowledge and skills that are required to make responsible personal financial decisions.

Why is Financial Literacy Month important?

FLM aims to teach Canadians about the importance of creating and following budgets and living within your means.  According to the
Government of Canada
less than half (46%) of Canadians currently have a budget, and 42% of 35-44 year olds are not keeping up with bills and financial obligations. Only 66% of Canadians are financially prepared for retirement and 52% of Canadians admit that they could not cover at least six months’ worth of living expenses if they lost their main source of income.

These alarming trends are being passed onto Canadian youth, and inspired Jay Seabrook, the focus of this month’s EXPERT/ease feature, to create a financial literacy program for high school students.

Jay and his long-term business partner Kevin Cochran built the EnRICHed Academy content to target the comprehension of high school students “so they could really understand how to build wealth in a fun and entertaining way.” EnRICHed Academy recognizes that everyone deserves financial awareness and is dedicated to financial education, a premise that won over the business brains on Dragon’s Den in Season 7.

To learn more about Jay’s path to success with EnRICHed Academy and Dominion Lending Centres read the November edition of EXPERT/ease.

May 25 | 2016

China’s real estate market

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Are regulations cooling things off or merely inflating another bubble?

The sheer size of China’s populatio16-162_FCT_Blog_China_Sunset_Squaren trumps imagining: with nearly 1.4 billion people living within its borders, China has more people speaking English than the English-speaking populations of the United States and Canada combined (quoted by former US ambassador to China, Jon Huntsman).

China’s real estate marketplace is equally immense—and, many analysts contend, as fragile as it is vast.

Why should we care? Because if the Chinese real estate market implodes, then China’s economy may subside as well. What’s underpinning this fragility?

People: people moving.

Some 220 million Chinese have moved from rural towns and villages to one of China’s metropolitan areas, where, as unskilled labour, many work building “ghost cities”: square miles of highrise apartments with no residents. These “ghost cities” aren’t owned by the government: they’re owned by investment syndicates; should the market collapse, the evaporation of wealth would be unprecedented, with global implications.

Regulatory changes in 2013 were designed to cool off a white-hot market and for the most part, most China property market-watchers agree: the regulatory changes worked. The market consolidated, then took off again, growing by an eye-watering 14.4% in 2014, fuelled by investors departing China’s cratering equities marketplace.

There’s more: for years, China’s sky-high savings rate—over 60% for most Chinese; there’s no state pension scheme in China—has been the bedrock for the property market’s fluctuations. That and minimal Chinese household debt ratios have provided a measure of cushioning from the wildest market movements, but the huge residential inventory overhang looks to be catching up with China’s spectacular appetite for housing investment.

The subtle thing is that China’s urban market is differentiating—and that differentiation is accelerating, as first-tier, technology-driven megacities (Shenzhen, Shanghai, Beijing, with populations over 10 million) outpace smaller, more traditional urban economies (Chonqqing, Tianjin, populations 5-10 million).

Tech capital Guangdong province is catalyzing real productivity gains and job creation, inciting population inflows; that, in turn, contributed to Shenzhen’s 52 % property price gains over the past year. It’s Silicon Valley all over again, only bigger.

“China’s 60 richest cities—many of which have double-digit real estate appreciation annually—produce $8.6 trillion in economic value (half the size of the US GDP),” notes China real estate analyst Dan Steinbock “include all of the world’s 10 fastest-growing cities and represent 15% of all global growth.”

There’s a catch, of course: the very policies designed to decrease the wild market conditions of China’s overbuilt smaller cities and housing-starved megacities are just as likely to inflate yet another bubble.

With 30% down financed by easy down payment loans and 24% interest, China’s real estate market is playing with matches, with a burgeoning (and highly illegal) secondary market for down payment loans threatening to catch fire in Shenzhen and Beijing. Mobile and online platforms aren’t helping matters, adding even more modes of leverage to already over-leveraged markets. Expect to see another wave of government regulations in short order. Make no mistake, however: China’s real estate market has cracks all over it.

Do you think this bubble is ready to burst? Comment below.

Further reading:
Shanghai to monitor mortgage lending more closely: document
China’s Shenzhen raises property deposit thresholds
Why China’s Property Rally Has ‘Reached A Tipping Point’

Feb 9 | 2016

The cold, hard reality of debt

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debtThe role of a trustee in debt recovery

Although the fun-filled hustle and bustle of the holidays is long past, the reality of all those holiday bills still lingers. The creditors that helped finance all that “holiday magic” several months ago want their money and they want it now…

Promises make debt, and debt makes promises.
Dutch Proverb

When a debtor is not able to pay their debts when they become due, they may seek credit counselling to create a proposal for repayment. Or, depending on how dire the situation, the debtor may speak with a trustee in order to file a proposal or declare bankruptcy.

This is the busy season for recovery professionals and trustees in bankruptcy and it’s anything but merry for those they serve. Over the holidays, the average Canadian tends to accrue more debt, sometimes more than they can handle. But unlike January 2014, the news wasn’t all bad in January 2015.

According to the Office of the Superintendent of Bankruptcy Canada, when comparing December 2014 to January 2015:

  • The total number of insolvencies (bankruptcies and proposals) in Canada decreased by 3.0 per cent;
  • Bankruptcies decreased by 9.8 per cent; and
  • Proposals increased by 5.6 per cent.

This is a marked change from the previous year where all of the above had increased. You can view a more detailed breakdown of monthly and annual insolvency reports, here.

What is a licensed insolvency trustee?

A licensed insolvency trustee is licensed by the Office of the Superintendent of Bankruptcy to administer bankruptcies and proposals under the Bankruptcy and Insolvency Act in Canada. Considered an officer of the Court, their role is to ensure that a debtor’s rights are not abused, and that the rights of the creditors are upheld. Bankruptcy trustees serve both the debtor and creditor.

A creditor is an individual or organization that lends someone —a debtor — money. Creditors can be any of the following:

  • Banks
  • Credit unions
  • Credit card companies
  • Payday loan companies
  • Private lenders

Upholding the rights of the creditors means that a licensed insolvency trustee shall:

  • Evaluate a debtor’s behaviours and affairs before and during the bankruptcy
  • Sell a debtor’s assets, hold the money in trust and distribute to creditors
  • Ensure a creditor’s claims are legitimate
  • Process all appropriate paperwork
  • Administer the bankruptcy or proposal process from beginning to end

A trustee must also ensure the rights of the debtor are not violated at any time during the process. Examples of violations include being:

  • Forced to pay more than what is actually owed
  • Subject to additional fees added to the loan agreement
  • Threatened with physical harm or law suits
  • Physically harmed
  • Called repeatedly and/or at unreasonable times
  • Spoken to with obscene language
  • In contact with friends and family of the debtor

Making and achieving resolutions

Through moderation, co-operation and adherence to proper regulatory practices, it is possible to achieve a resolution that benefits everyone.

So what do you think was the reason for the shift in numbers when comparing January 2014 and January 2015? And how do you think this year, will compare? Have your say by commenting below.

Feb 4 | 2015

Danish negative mortgages: a cautionary tale

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We all remember Alice in Wonderland and Alice Through the Looking-glass, correct?

What few recall, however, is that Lewis Carroll was actually by training a logician; a century before logician/computer innovator Alan Turing, now mega-famous because of the Oscar-nominated Benedict Cumberbatch film The Imitation Game, Carroll was a super smart mathematics prof at Oxford and a man with a deep love of numbers, computation and early forms of what we now know as software—and the paradox.

He would’ve loved this paradox, because it’s straight out of Wonderland: a negative mortgage interest rate. (No, this isn’t a parody news piece from The Onion—it’s true, courtesy the irrepressible Wall St blog zerohedge.com, via @andreasbay. This is 2015, people.)

The numbers (this time) don’t lie, even if they’re very, very small. There’s a bank in Denmark that’s offering variable mortgages at -0.03%; it’s a great read, Google-translated:

Although interest rates are negative, it is not something that can be felt by customers as contributions and other costs continue to be paid. In turn, interest will be deducted from the contribution.

Precisely because this is an unusual situation, Nordea Kredit’s IT systems are not geared to the situation when the computers (are programmed) only to collect interest.

Lise Nytoft Bergmann (Nordea Kredit’s housing economist) says that there is no cause for concern, and that the new situation can be handled, “but sometimes we have to use duct tape and paste.”

debt_small2The Nordea story’s best read in the context of the €7 trillion in bonds that are already in the negative, as of last June, courtesy the European Central Bank. (The idea was to force cash into the market and incite Euro-investment. Hasn’t happened yet.)

No one really knows what’s going to come of this; the jokesters want to buy cars with a negative interest car loan, but, like Lewis Carroll, the logicians in the conversation note that as long as the banks charge more than what they buy for, they’re making money. (The negative interest rate mortgages, as you’ll no doubt have noticed, are variable: as soon as rates rise, the bank’s in good shape. It’s a first-time home buyer gambit, it seems.)

Here’s the thing: European ‘shadow banking’ is slowly coming into the light. And a good thing, too, not least because the Chinese ‘shadow banking’ situation—entire cities of empty apartment towers, some of which routinely collapse for want of good design and solid workmanship—is instructive. There’s only so much money you can pour down a hole, or as one UK comedian said on the BBC, ‘throw from helicopters.’

The Danish situation—soon to be repeated across Europe, because there’s nothing to stop it—is truly ‘through the looking-glass,’ because, in this scenario, savers—who pay the bank to hold their funds via negative deposit rates—directly (inversely?) subsidize those who buy debt.  And there’s a twist Lewis Carroll would love, because the more the debt, the greater the saver-subsidized ‘profit’ for borrowers.

Meanwhile, the shadows hiding dubious investments recede elsewhere, as the Ukrainian mess means Russian offshore wealth isn’t buying condominiums in London, New York and Cyprus at anything like the gold-rush rate of the past few years even if “New York real estate is the new Swiss bank account.”

Vancouver, home to many offshore condominium absentee owners, knew this 30 years ago, when mainland Chinese flight capital began snapping up condos, later moving on to San Diego and parts south. The smiling Russian condo buyers have vanished in a matter of months since international sanctions bit, the ruble evaporated and oil prices halved—just like Alice’s eerily grinning friend, the Cheshire Cat.

Might a Danish mortgage bring them back to market?

Jan 28 | 2015

The housing bubble: who’s on first?

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Then there’s the story of the 102 year-old stockbroker, who, back in 2009, was asked by a reporter what he thought of the “biggest crash since the Depression.” The old guy smiled a little and replied: “At this point in my career, I’ve seen the world end maybe ten times by now.”


So oil’s falling off the table, the Bank of Canada’s given us vanishingly small interest rates, Alberta’s on the ropes, housing prices and construction starts are slipping into a state of suspended animation and the stock market is looking like the indomitable Canadian boxer George Chuvalo ten rounds in with Muhammad Ali—battered but unbroken.

Is this bad for business? Without a doubt.

But here’s the thing: the economic forces set in motion by oil’s huge drop (sidebar: why hasn’t diesel come down in price?) are so complex that, like the intricate pattern of winds that drive the planet’s weather, who the heck can really say just how this will all play out?

The takehome lesson of ‘The Challenger Sale,’ as we saw back in September, is that not only did some very savvy financial services folk survive the mess in 2009 but they actually grew their business.

The real game here is context: trying to understand just what’s happening across the economy and then relating that to your marketplace is way too big an undertaking—a national average may not relate at all. Case in point: Winnipeg’s going to see very different forces at work on the housing/mortgage market than Moncton or Tofino, so most TV and print pundits aren’t worth betting on.

Why? Because their crystal ball-gazing’s way too ‘big picture’ to be of much local intelligence value. Moreover, contrarian or not, they’re only human and most are wrong far more often than they’re right. (This is of course the premise of Nassim Taleb’s profound book on anyone predicting anything because of the fragility of financial modelling, The Black Swan)

So what’s a trusted advisor to do? Capitalize on the trust you’ve banked with your clients already. No matter how grim things get in Calgary or St John’s, people will still have children, need a bigger house, divorce and need a smaller one, suffer a death or health crisis, lose a job or win one. Life, as our old stockbroker knew, goes on.

Understanding the psychology of a client’s needs and wants means asking the right questions—and listening carefully—at the right time. What influences clients in 2015?

Are you sitting down? In 2014, 47% of Americans sampled for this terrific ‘Search Engine Journal’ financial and insurance advisors survey infographic said that Facebook was the #1 factor in their purchasing decisions. Common sense suggests that even in a fragile market, early adopters will form decisions (even about complex financial and insurance considerations) from peers on Facebook—and the infographic makes clear that’s where you’ll find them. (And, yes, you’re right: this data isn’t referenced by bank researchers or mortgage guys. It’s behavioural.)

That Facebook preference isn’t necessarily true of not-so-early adopters: they’re already in your trust network, so if you’ve been following our three-part business development series, you’ll have a CRM system in place and have identified and are talking to prime clients and ensuring they stay, trusting you and your business acumen, in your pipeline.

But here’s a shocker: the fastest growth in social media adoption is on Twitter…and for both men and women over 50. So if you want to build relationships with that segment, that’s where they are.

Canada’s Twitter population is slated to grow by some 28% this year (twice the US rate of adoption), according to the well-established web stats company eMarketer, skewing heavily towards urban areas.

What are potential clients scoping on Twitter? That’s a good question (answer: trending consumer patterns for just about everything) but the better question is where are potential clients interacting with Twitter? Answer: on their smartphones, where Canadians lead the world in per capita Twitter consumption growth, doubling since 2012.

Social media marketing for the mortgage industry is still in its infancy but it’s a solid bet—even in these strange and difficult times—that those who know their client networks will not only survive the harsh stuff now but will prosper.

Remember that BMW, one of the most successful brand marketers around, wisely never cuts its marketing communications spend in down markets: the car company doubles down, knowing that recessions always end…and when they end, the spend begins.

Jan 26 | 2015

Tis’ the season…for debt

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The role of a trustee in debt recoverydebt_small.

Now that the fun-filled hustle and bustle of the holidays is over, the cold hard reality of all those holiday bills settles in. The creditors that helped finance all that “holiday magic” want their money.

Promises make debt, and debt makes promises.
Dutch Proverb

When a debtor is not able to pay their debts when they become due, they may seek credit counselling to create a proposal for repayment. Or, depending on how dire the situation, the debtor may speak with a trustee in order to file a proposal be forced to declare bankruptcy.

This is the busy season for recovery professionals and trustees in bankruptcy and it’s anything but merry for those they serve.

According to Industry Canada, when comparing December 2013 to January 2014:

•    The total number of insolvencies (bankruptcies and proposals) in Canada increased by 8.2 per cent;
•    Bankruptcies increased by 2.3 per cent; and
•    Proposals increased by 16.5 per cent.

What is a trustee in bankruptcy?

A trustee in bankruptcy is licensed by the Office of the Superintendent of Bankruptcy to administer bankruptcies and proposals under the Bankruptcy and Insolvency Act in Canada. Considered an officer of the Court, their role is to ensure that a debtor’s rights are not abused, and that the rights of the creditors are upheld. Bankruptcy trustees serve both the debtor and creditor.

A creditor is an individual or organization that lends someone —a debtor — money. Creditors can be any of the following:

•    Banks
•    Credit unions
•    Credit card companies
•    Payday loan companies
•    Private lenders

Upholding the rights of the creditors means that a trustee in bankruptcy shall:

•    Evaluate a debtor’s behaviours and affairs before and during the bankruptcy
•    Sell a debtor’s assets, hold the money in trust and distribute to creditors
•    Ensure a creditor’s claims are legitimate
•    Process all appropriate paperwork
•    Administer the bankruptcy or proposal process from beginning to end

A trustee must also ensure the rights of the debtor are not violated at any time during the process. Examples of violations include being:

•    Forced to pay more than what is actually owed
•    Subject to additional fees added to the loan agreement
•    Threatened with physical harm or law suits
•    Physically harmed
•    Called repeatedly and/or at unreasonable times
•    Spoken to with obscene language
•    In contact with friends and family of the debtor

New Year’s resolutions
Through moderation, co-operation and adherence to proper regulatory practices, it is possible to achieve a resolution that benefits everyone.

Oct 31 | 2014

The scary truth about title fraud

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title fraudForget about zombies, vampires and witches. This year there is an even more frightening disguise out there: “the fraudster.”

When it comes to disguises, the fraudster is unfortunately very real. Although there is no one agency assessing the financial impact of fraud, industry insiders estimate that these scams cost Canadians between $300 million and as much as $1.5 billion each year. Not to mention the potentially huge losses resulting from unpaid mortgages, property foreclosures —and above all — the emotional and financial stress for the victims.

This is no Hollywood horror movie: this is reality in Canada today. And the fact is FCT pays out more as a result of title fraud than any other claim type.

Title fraud can happen in one of two ways:

Identity theft and impersonation

Using stolen identification or documents, the fraudster pretends to be the homeowner and obtains one or more mortgages on the property.


The fraudster registers forged documents to sell the property, registers a forged discharge of the existing mortgage (if one is outstanding) and then gets a new mortgage against the property’s clear title, walking away with the money.

There are many types of fraud with three main types affecting the real estate industry:

1) Title fraud occurs when the ownership or title of a property is fraudulently changed and/or the true owner is impersonated in order to fraudulently sell or mortgage the property.

2) Mortgage fraud is any scheme used to obtain a mortgage under false pretenses. An individual may apply directly to a lender or mortgage broker for a loan secured by real property to which they have omitted or misrepresented facts in order to obtain a mortgage.

3) Value fraud is another type of fraud that happens when a lender is led to believe the property is worth considerably more than it really is through either the concealment or intentional misrepresentation of the property’s attributes and value.

Real-life fraud horror stories

Consider these increasingly common examples of Canadian fraud stories*:

*Names and specific details may have been changed to protect the privacy of those involved.

The disappearing husband

A woman went overseas on an extended vacation to visit an ailing relative. While she was away, her husband forged her signature and fraudulently sold their property. When she returned, she found that the locks had been changed and new “owners” were living in her home. The husband then disappeared . . . .

A grisly discovery

A man went to the City to pay his taxes – a routine quarterly event. While there, the man was told by the City that he didn’t have to pay the taxes because he no longer owned that particular property. The man was flabbergasted — this was his family home he had lived in for decades. Only after much investigation did it come to light that he was a victim of an unlawful transfer of title and the mortgaging of his property for almost $110,000.

The house on the hill

A woman received a call from a mortgage collector saying she was three months behind on her mortgage payments. But the woman didn’t own a home nor had she ever taken out a mortgage to purchase one! Later that same night she also discovered that two other properties had been mortgaged in her name, leaving her on the hook for more than $400,000.

A dead ringer and a no-good niece

An older man passed away, leaving an estate which included a house located in another province. A few months later while probate was being processed, a man with his “niece” walked into a lawyer’s office and presented himself as the deceased, complete with forged ID. The man then transferred the house to the alleged niece, who promptly mortgaged the property, leaving the deceased’s widow with a $300,000 mortgage on her rightful home.

Fight fraud with simple solutions

The best way to fight title fraud is to purchase the ultimate in protection: title insurance from FCT.  But aside from insurance, the best advice is to follow your instincts. If something doesn’t feel right, be extra vigilant and report any suspicious activities. You don’t have to be a victim.

Jun 10 | 2014

Reaching beyond our walls…

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 Historians have described the YMCA as one of the great social movements of the last two centuries. “An unstoppable, unifying force for good. A rallying point for everyone who is dedicated to the growth of people in spirit, mind and body, and in a sense of responsibility to each other and the global community”. Originating in England in 1844, the YMCA movement quickly spread around the world.

What are the needs of Oakville today? Where are the gaps in the social safety net? What gaps can the YMCA fill?

Consider recent research findings:

• 1 in 9 children in Oakville lives in poverty.
• 67% of parents in Southern Ontario report it is hard to find enough quality time with their kids.
• 37% of children in Southern Ontario are described by their parents as behind in one or more more key areas of early childhood development.
• 1 in 3 children is clinically overweight or obese.
• 5% of children/youth (5-17yrs) meet minimum daily activity guidelines of 60 minutes.
• More than 10% of youth average more than 7 hours of screen time daily.
• 19% of Oakville grade 10 students have been bullied at school.
• $22,869 is the annual income a family of 4 receives from social assistance.
• Overall poverty rate in Oakville rose more than 22% in the past decade.
• 1 in three Canadian families cannot afford to enroll their children in sport or recreation activities.

Life today is more complex than ever before and the YMCA has even a larger role to play. Children regardless of where they live or their economic circumstances need to develop healthy habits, responsibility and values so they can overcome the challenges and adversities they meet. Youth need a safe place where they can socialize, develop leadership skills, land their first job, and shoot a few hoops. Adults need affordable quality child care, safe summer camp for their kids, and their own place where they can unwind and keep fit. Seniors need to stay physically and socially active through weight training, cardio-activities, and group fitness programs. Families need to be active and social together. People of all ages need a welcoming place to go where they are safe, and they can strengthen character and values and where they can be armed with improved self-esteem, optimism, determination and resilience. Everyone needs a healthy alternative to the multitude of unhealthy options of our current society. The Y provides options for thousands of people across Oakville…people who count on us to deliver high-quality, accessible programs where they can be connected and can belong.

Assuring accessibility, our YMCA is flexible and creative. We are eager to seek new ways to relate to people. Specialty programs are delivered in order to meet people in their own communities, people with special challenges, community organizations and fellow charities, where we can help them to meet their goals. Through engaging in partnerships combined with outstanding volunteer and staff participation, our YMCA is able to learn of community needs as they emerge and develop custom solutions.

In 2013, 2114 people in Oakville turned to us for support. They were single families, families with low incomes or those who had fallen on hard times and required transitional support due to illness, crisis or loss of employment. The cost of this support was $764,978. The YMCA raised over $200K through over 1400 donors to offset some of these costs. Over 490 volunteers contributed over 14,000 hours. 13,000 participants

Our YMCA is a relevant charity that develops grass-roots, solution-based programs to assure all in our community are healthy and growing. We have helped change lives and provided opportunity to achieve what people may never have thought possible. I invite you to reach beyond your walls to join the journey of providing profound opportunity.  We can and will achieve together.

Nov 19 | 2013

The right balance – A guest blog by Jim Murphy, President & CEO, Canadian Association of Accredited Mortgage Professionals (CAAMP)

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From time to time, the FCT blog will host leaders in the real estate and mortgage industry in Canada.  We are honoured to host our  first guest blogger  Jim Murphy, AMP, the President and CEO of the Canadian Association of Accredited Mortgage Professionals (CAAMP).

jim-murphyI welcome the opportunity to participate in this blog. 

Real estate and mortgages in particular, receive a lot of attention from the media.  Following the financial crisis of 2008, and the mortgage meltdown south of the border, countries around the world reviewed their real estate finance regulatory structure to ensure that what happened in the US did not happen at home.  Indeed many other countries were impacted by housing crises of their own including Spain and Ireland where an overbuilding in supply during good economic times was not sustainable.

Canada of course was different.  We did not have the products the US did, we did not finance the majority of our mortgages the way the US did, namely by securitization, and we had an extensive system of mortgage default insurance that had served the country well.  Despite this, the federal government has been active on all things regulatory when it affects the real estate finance sector and mortgages.  They have done this for several reasons. One, concern over household debt levels and what the impact of rising interest rates would be when and if they do occur.  Two, the lack of any increases to interest rates which would have moderated the market and three, to limit their own exposure and by extension the Canadian taxpayer to the real estate finance system.

The government has changed rules affecting the financial guarantee for mortgage default insurance four times since 2008.  They have mandated a 5% down payment, eliminated 40, 35 and most recently 30 year amortizations and limited the amount that can be refinanced on a home as well as several other measures.  This, together with other measures including governance changes to CMHC and capping federal government exposure to various funding programs, have had a significant impact on the real estate market and mortgage industry.

CAAMP, which represents the mortgage broker channel in Canada including lenders and insurers supported many of the earlier changes.  However, we now believe that further changes are not required.  Changes have affected a borrower’s ability to purchase, especially first-time homebuyers.  CAAMP research showed that 17% of all homebuyers who qualified before 2010 would not qualify today primarily based on the elimination of the 35 and 30 year amortization period.  Importantly, the government must find a balance between the concern over household debt and their own exposure with that of the important role that housing plays in the overall Canadian economy in terms of jobs and tax revenues.  Also, data from CAAMP shows Canadians are and have been behaving prudently with their mortgages, making extra payments, taking five year fixed terms and building equity.   In our view, signs of a housing meltdown which happened in other countries are not present here.

Housing plays an important role in the Canadian economy.  It is important that we get the right balance and do not over correct.