Jun 28 | 2017

Strata Plan vs Title Insurance: Which One Do You Really Need?

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Strata plan vs title insuranceDarren* applied to change the use of his commercial condo unit to a medical one, but his request was denied. He was told by the municipality that the site plan agreement had not been complied with as the condo corporation required another 97 parking spaces to be added. The municipality then issued a Notice of Violation of the Site Plan Agreement due to the lack of parking spaces. The condo corporation has to decide whether it will add the parking to comply or try to change this requirement in the site plan agreement. This may mean an increase in common expenses or a special assessment to be paid by Darren and the other unit owners. Because Darren had a commercial title insurance policy from FCT, we are paying for the legal costs to defend him in dealing with the Notice of Violation.

In Darren’s case, the Site Plan Agreement would have needed to be compared with the Strata Plan to make sure they matched. However, having a strata plan would have provided no protection as it would not have covered his legal expenses or potential loss of value to his property if he can’t use it as he planned to.

A strata or condominium plan, like a survey, is created by a surveyor and it documents unit sizes and structures as well as what is common and exclusive use property. It also includes any parking or lockers that are part of the unit. However, if there’s an error in the strata plan or the structure does not match the plans – it’s the owner who may be responsible for part or all of the costs associated with remedying the issue.

A legal professional can provide an opinion on title based on the accuracy of information provided to them and an up-to-date or existing strata plan or survey. However, without a title insurance policy, a strata plan by itself offers no protection for the property owner or legal professional in case of incorrect information or discrepancies.

With an FCT title insurance policy, we protect both the legal professional and owner by providing loss of value coverage, duty to defend, funds to fix most municipal enforcements, fraud protection and more. It benefits lawyers by shifting the risk and liability associated with the title and strata/condo plan to us. Our condo endorsement also covers lack of disclosure in a Status Certificate, if the condo corporation has not been properly created and it results in a title defect. A Status Certificate is not always necessary for a loan policy depending on the insured amount.

While both a strata plan and title insurance are important in a condo or bare land purchase, choosing the one that offers you more protection is a safe bet!

*Name has been changed to protect the privacy of the individual.

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’

May 9 | 2016

Move over Bitcoin? There’s a new digital currency in town and it’s called Ethereum

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bitcoinNo one quite knows where Bitcoin is going or just how powerful its core technology, the blockchain, really is. But you don’t need an engineering degree to note when a reputable major bank says Bitcoin is considerably undervalued  — to the tune of $200 per Bitcoin or some 58% — there’s something going on. Bank analysts and policymakers alike are beginning to see Bitcoin as a kind of “digital gold” that seems to be a virtual benchmark of value exchange as well as a transactional system itself.

Key players continue to position themselves to exploit the new technology; the LINUX Foundation (the people who made open-source operating systems universal) announced recently that 10 startups—all of them A-list—have joined the Hyperledger Project. But it’s the advisory board members who are immediately impressive: CTOs from IBM and Thomson Reuters and CEOs from major software and FinTech companies. And the board chair is Blythe Masters, a scary-smart Englishwoman and former JPMorgan wunderkind whose own startup, Digital Assets, is ground-zero for Wall Street’s interest in the technology. (For more on women leavening financial successes in C-suite roles, see our April EXPERT/ease special feature, It’s incontrovertible: women make companies more profitable.)

This past year, Ethereum, a blockchain with the promise to decentralize more than just the exchange of value, is being widely experimented with by major financial and tech institutions , via a permissioned version of its distributed ledger.

Ethereum is the brainchild of a 21-year-old Russian-Canadian, Vitalik Buterin, who dropped out of the University of Waterloo to develop the platform with a small team of hacker-collaborators; the early Canadian work led an Ethereum startup in Brooklyn, where progress over the past few months has sparked big institutional interest.

So what does this thing actually do?

Imagine a contract—a smart contract—which not only executes itself between two parties transparently, but is also subject to instant peer-to-peer review to keep everything above-board. That contract that is Ethereum’s task is also programmable: additional binding agreements can be added near-instantly.

One obvious use for such a “universal contracting machine” would be betting on a hockey game via the Ethereum blockchain, triggering a program which ultimately governs (impartially, automatically, and agreed to by all parties) the payout for the winning bet. Ethereum’s basic unit is Ether, which, if the rest of the process weren’t amazing enough, also pays for the entire process as it plays out between the contracting parties.

Things get even more intriguing when you understand that Ethereum is a kind of massive spider web of a network of computers, a single networked super computer, that’s run by the users participating on the network and through which resources are distributed (and paid for) by Ether.

If this sounds like a kind of artificial intelligence transaction system, it sort of is.

Sort of.

While no one has yet to proclaim the Ethereum/blockchain combination the “category killer,” it’s safe to say things are moving in the right direction—and very fast indeed—towards a true universal “distributed ledger”: a whole new virtual spine for Earth’s financial transactions.

Nov 25 | 2015

FINTECH, Mr. Skinner and the future of banking

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Peertopeer_smallChris Skinner is one of EXPERT/ease’s heroes. He’s “widely considered as one of Europe’s leading thinkers in strategy, financial services, banking, business development, payments, risk management and business transformation,” is the author of such great reads as The Future of Banking (2007) and Digital Bank (2014), and has won more awards for his thinking about banks than any just about any other human being. His multi-award-winning blog, if you haven’t visited, is some of the most intelligent writing on the future of banking around.

That’s where EXPERT/ease spotted the following piece of wisdom. Everyone, Mr. Skinner notes, is blathering on about the ‘Uberization” of banking, because Uber now has its own online banking entity; likewise Visa’s investment in Stripe.

Neither a much-ballyhooed event, Uber banking or Visa’s Stripe buy-in, is disruptive: there’s no big change here; both are evolutions of the present credit card networks. Neither will change how we exchange value and how we contract processes like mortgages. And here’s where Mr. Skinner’s sharp mind is so revealing: the real white space, as he sees it, is “shared ledger structure,” for that’s where The Big Bang in financial technologies (FINTECH), where peer-to-peer connectivity, mobile networks and “shared ledger” structures come together.

Peer-to-peer connectivity and mobile networks are the soul of Facebook and Instagram. They are not the soul of banking. The soul of banking is Skinner’s “shared ledgers”—the engines that will enable payments, banking and finance as apps.

The rate of investment and tech development to empower these engines is staggering. Finovate, which tracks “FINTECH unicorns”—startups already worth more than U$1 billion—notes that there are 83 financial tech startups out there right now, with Zillow.com and Housing.com the only two real estate unicorns.

Nature—and the market—abhors a vacuum. The peer-to-peer lending platforms are the ones EXPERT/ease is watching for the first indicators of disruptive impact on mortgage lending. Lufax, the Chinese P2P lender, is worth U$9 billion, with Prosper.com, the US P2P platform which has transacted U$4 billion in personal loan, is worth approximately U$3 billion.

So what’s the opportunity Mr. Skinner has identified for these unicorns? Consider this: banks historically are inefficient at consumer and small business lending because interest rates aren’t individualized, underwriting costs are relatively high, loan decisions are far from timely and small businesses, in particular, are observers of a process that all too often fails them. Why?

Because the loans are low-value to the banks.

But here comes the tidal wave.

P2P lending’s ability to leverage the Internet’s vast connective reach and complex algorithms to compute metrics like credit scores and social media activity empowers massive scale in aligning borrowers with investors, while meeting each party’s constraints. P2P lending in the US is rocketing ahead, up 128% since December 2013. In Canada, similar growth is underway.

This connective reach and computational power of course is precisely the “shared ledger structures” our friend Mr. Skinner emphasized as the place where FINTECH disruption will occur.

It’s not just about Uber and Stripe anymore, in short. The global financial world is literally rebuilding the interconnected payment, banking and financial worlds, partly because of the fiasco of 2008, but mostly because now services can operate online at very large scale.

It will most interesting to see how fast private mortgages scale via P2P; Prosper, for instance, is capped at $35K maximum for a loan, but the explosion in “shadow lending” is already sidestepping regulatory caps. (Private mortgages are currently skyrocketing in Canada, as well: see more in our second EXPERT/ease blog this month…)

So how big does this thing get? Well, London, freshly named the world’s new financial capital, is betting its future on continuing to be the leading edge of FINTECH—just like Mr. Skinner himself, whose highly entertaining June 2014 speech at Zurich’s Finance 2.0 Conference is well worth a Youtube view.

Mar 25 | 2015

Cleveland’s green plan: rehabbing a great city’s economy

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Last time, we looked at how the tiny town of Sangudo, Alberta, staked its future on the business savvy of its own talent, investing through a co-op whose success has remade the town’s economy and its real estate market. But does what worked in a microscopic rural community necessarily scale to succeed in the vast wastelands of a dying US inner city?

You don’t have to look far: the US’s economy now lives on two different planets, moving ever farther apart—and one of the “tells” defining which planet you’re on is infrastructure: the state of schools, highways, bridges, waterworks, public transport, inner city amenities, libraries, the list goes on. When the oil shock of the 1970s and the “global economy” politics of the 1980s combined to hit the old US economy right between the eyes, the first big industry to be “globalized” was US steel as Japanese and Korean factories out-innovated and out-competed the US firms.

Since the US entry into WWII in December, 1941, steel had been a critical part of a US economy driven by manufacturing. The great midwest industrial cities of Detroit, Pittsburgh, Cleveland and Gary, all had steel in their veins. But in 1978, Cleveland was the first US city to default on its bond obligations, three decades before Detroit. Derided as “the mistake on the lake,” Cleveland suffered for years, as the dire state of its inner city became synonymous with “Rust Belt”;  combined with a long titles drought for its major sports teams (the NFL Browns left for Baltimore in 1995), Cleveland was a city on the ropes, its real estate prices tanking.

Enter what the activists call “community visioning” and the picture for successful community investing—and the parallel rise in residential real estate valuations in Cleveland—and things get a whole lot more interesting. Faced with a complex set of profound third-world problems in a first-world city, a core of dedicated citizens and innovative government people began to figure out how to use “anchor institutions” like hospitals and universities, dead essential to Cleveland’s future no matter what, in combination with local funding mechanisms, to grow local businesses.

The goals were overlapping and multifaceted, and the road to a viable model long and winding, but sustainability and growing property values through community-funded private ownership drove the strategy. The flight of the steel companies from Cleveland scarred the community’s memory: Clevelanders knew 30 years ago what it felt like to see a payroll of thousands of great jobs, benefits—and mortgage payments—leave town, never to return. At first, the green economy wasn’t even on the horizon—the game was simply to survive by “keeping the money in town.”

Meanwhile, even the World Bank and the Harvard Business Review were rethinking the economic principles which gutted the US’s steel belt, the World Bank actually questioning how globalization had damaged employee rights in the US; in 2010, a pair of studies, one in the Harvard Business Review and the other from Penn State’s business school, both agreed: per capita job growth and real estate price growth were intimately linked to the success not of “big payroll” companies (who could pull up stakes, tax breaks or not) but of locally owned businesses and *their* payrolls.

green-inner-city_smallSo Cleveland figured out that universities and hospitals have massive procurement needs…which can be fulfilled locally, by businesses purpose-built to serve these “anchor institutions”—with a twist: the emerging small businesses which won co-op investment are “green,” dedicated to cleaning up and keeping clean one of the most infamously dirty urban environments in the US. With these suppliers/vendors growing their businesses (and their payrolls), Cleveland’s real estate market began to grow in value, slowly, in select neighbourhoods at first, then across the metropolitan region along the Lake Erie shore. The procurement scheme is called Evergreen, and you’re going to be hearing a lot more about the success as the projects grow and deepen change in Cleveland.

From sole proprietorships to co-ops, Cleveland’s discovered that there’s actually a culture of co-operation where small businesses flourish and employee-owned green companies slowly build bank deposits and tax base because the anchor institutions are “buying green, buying local.” One simple unglamorous example: a state-of-the art “green laundry” serves Cleveland’s hospital network’s huge clean linens needs—and growing payroll and tax base to boot; across town, a co-op solar company has numerous first-time homebuyers on staff and the prospects of real social mobility for families trapped for decades in urban poverty. “If it wasn’t for Evergreen, I don’t know where I’d be,” says James Harris of Cooperative Solar. “Having the opportunity to have a career, it’s just great.”

What’s this mean for property values and the real estate market? Cleveland region MLS listings and market reports show that January 2015 grew 4.7% over 2014, with dollar volume climbing 8.4% to $310M, with an average residential sale price among the US’s bargains (Cleveland has rapidly improving ‘liveability’ statistics) at US$126K. Retail vacancy rates are also declining, another good sign; commercial values are climbing too, with innovative projects like a $10M rowers’ condo complex, right on the river, in a rehabbed Victorian foundry. Very cool.

The big picture in the US is far bigger than just Cleveland: banking assets in the US are about $8 trillion but securities assets are over $30 trillion. If even a fraction of Cleveland’s residents, like Sangudo’s did in the last post by EXPERT/ease , moved their investments from out-of-town financial instruments to backing a neighbour’s business, it’d be one smart investment in their own property values—and the future of their city. Cleveland is a slow-moving miracle, its “green procurement strategy” a signal advance in the explosion of employee owned companies in the US, from tech to microbreweries to clothing.

Here’s a wrap-up, from Sangudo, Alberta’s Don Ohler, naming the foundational pieces for community investment that works:

Common vision
In the course of facing down a serious threat, residents develop a clear idea of where they want to go

Trusted leadership
A number of locals habitually do things for the good of the whole community, while not trying to steal the show

Economic strategy
The investment co-op fights to retain the town’s core businesses largely on the strength of local savings

Wider agenda
Finally, local leaders press for reforms to government policy so others can win too. While thinking and acting in the here and now, they’re looking to their “greater neighbourhood”—other small towns and what they can achieve together, given some strategic government action

Mar 24 | 2015

Property fraud: a cautionary tale, Hollywood style

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For ages our society has loved to paint landlords as somewhat evil — individuals that use and abuse their power and position over their helpless tenants.

But recall the 1990 thriller, Pacific Heights, staring a young, fresh Melanie Griffith and a handsome Matthew Modine as a couple terrorized by a conniving and twisted renter, Carter Hayes, played so convincingly by Michael Keaton. Carter never pays any rent, drives the other tenants away (by breeding cockroaches, no less!) and systematically ruins the lives of his landlords, as well as racking up their credit card bills.

landlord-smallAlthough fictional, Pacific Heights offers a cautionary — albeit over-the-top — tale illustrating the perils of property fraud.

In an economy where the average home price in Toronto exceeds the one million dollar mark, it is increasingly common for real-life homeowners to use income from tenants to pay down their mortgages or earn additional income. It can also prove fertile ground for fraudsters.

 

Just ask Calgary landlord Rod Faulkner:

“In the 12 years, people have scammed me in just about every way imaginable,” says Faulkner, who owns 12 Calgary revenue properties. “And every time I get scammed, it costs me money, and I learn a new lesson.”

In the 2012 online article entitled Avoiding property fraud 101, writer Peter Mitham paints a grim picture:

Regulators in each province track mortgage-and title-related fraud, and Better Business Bureaus track other types, but mortgage-related fraud alone regularly tops $300 million a year in Canada. When frauds of all types relating to real estate are factored in, the tally is easily more than $500 million annually.

No one wants a tenant from hell like Carter Hayes in Pacific Heights. If you’re looking for a Hollywood ending to your rental story, below are some practical ways to protect yourself and your investment when renting:

Consider redirecting your mail
If possible, do not have tax bills, credit card bills, bank statements or any other financial information sent directly to your home. Instead, consider getting a P.O. Box, or having the documents sent electronically to a private, secure email address or access documents directly through your financial institution’s portal.

Remove or secure all financial information on the premises
If you are sharing accommodation with a renter, remove old income tax files, property tax records and other bills from the premises. A locked cabinet drawer will not deter a savvy fraudster. Keep the documents in a secure off-site location.

Do ALL security checks
Police criminal record checks and credit checks are worth the nominal fees for the information you gain. Call all references provided, but take their recommendation with a grain of salt: they may be in on any potential scam. Another great way to learn more about your prospective renter is to search their online profile. You’d be amazed at what you can find with a simple Google search! And above all, trust your instincts.

Know your neighbours
Take the time to introduce yourself to your neighbours who can be your eyes and ears when you’re not around.

Get title insurance
Remember fraudsters are getting more and more savvy all the time and although there is no such thing as a 100% guarantee against fraud, title insurance can help greatly mitigate your overall risk. You can learn more about the benefits of title insurance online at FCT.ca.

A recent Toronto Star article, How Ontario landlords can avoid bad tenants outlines additional tips that you may also find interesting.

Know any good landlord or tenant horror stories? Share them here.

Mar 12 | 2015

Sangudo’s saga: how’d you like your steak?

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In 2010, like so many small towns in Alberta whipsawed by change and outmigration for the bright lights of Calgary and Edmonton, the small town teetered on the abyss, with sheets of 4×8 plywood boarding up over half the storefronts downtown: Sangudo, Alberta, population 325, was ready for economic life-support. Sangudo, some 90km northwest of Edmonton, had been hemorrhaging businesses for a decade; real estate prices were through the floor.

Online retailers and nearby big box stores had been a one-two punch that had Sangudo on the ropes. In 2006, the local school board decided to close the local high school…and that set a few hardy souls thinking about the future of their town. The townsfolk fought and won and kept the high school open: it was the defining “it’s up to us” moment, as one of the activists, Shelly Starman, recalled in a documentary some years later.

A citizens’ group, a co-op in mind, saw the writing on the wall; they convened to blue-sky opportunities, from carwashes to auto parts supply. Nothing stuck. And then town abattoir’s elderly owner announced his retirement and the imminent closing of his business.

That was the last straw for the citizens’ group: they formed an “opportunity development” investment co-op to buy the abattoir, raised $220,000 from 22 members, and (the biggest piece of the puzzle) induced two local residents who’d left Sangudo for greener pastures—a trained butcher and a savvy business analyst—back to town to run the operation, and held their breath. “Return on investment wasn’t the real focus,” recalls SODC board member Dan Ohler. “It’s about people working together to recreate our community, as a community.”

Guess what?

small-steakHere’s the headline, five years and a ton of hard work later: Sangudo Custom Meats, self-proclaimed purveyors of the “greatest meat on the planet,” its business plan balancing a farmer’s quick wit and a common-sense but innovative eye on growth, roared out of nowhere (actually 49th St, on the outskirts of Sangudo) to stake a claim to the best custom abattoir in a province where beef is taken very, very seriously.

Powered by word of mouth from the original investors, the abattoir has hit double-digit growth some years but the key piece is that Sangudo now has a business model that’s keeping its local economy local—and thriving. “Money isn’t the problem,” notes Ohler. “I’d bet there’s millions in local communities, sitting in RRSPs, bonds and the New York and Toronto stock exchanges. It was about leveraging those dollars and bringing them back into our community.”

The upshot for Sangudo real estate is stable prices, an influx of new families to grow the tax base a little…and certainly new jobs at the abattoir, high-skill/high-pay trades jobs with people hard at work ethically turning local cattle and pigs into superb entrees for Alberta’s high-end restaurants near and far—and SODC then turned around and bought the old Sangudo Legion Hall, renovating the once-depressing space into a thriving restaurant. More jobs, more cash moving through town—and staying there.

And word is, the steaks there are pretty darn good.

Sangudo isn’t alone; co-ops in other small Alberta towns are recirculating local wealth to build community value—rehabbing the local real estate market to boot—and demonstrating that a solid investment is where you find it: right on your doorstep.

First of two parts: next up—does the Sangudo model work in a near-derelict US inner city? Check out part two in our series, Cleveland in the EXPERT/ease series on growing real estate value by investing right in your
own backyard.

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.”

house_bubble_smallExactly.

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 6 | 2015

Top Title Stories of 2014!

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top5There was one big story in land titles this year so much so that it has introduced a new term into the vernacular, particularly for legal departments of Canada’s resource companies- “Aboriginal Title.” It is truly a game changer and as has been described as the watermark of a new era in aboriginal/government/ corporate relations in Canada. There are many related stories to our top story in the top 5 title stories for 2014.

1.    Supreme Court confirms Aboriginal Title
In late June of 2014 the Supreme Court of Canada announced its decision in Tsilhqot’in Nation land dispute and confirmed aboriginal title, for the first time, to a specific tract of land (where no land claims treaty exists).

Aboriginal title means that governments and others seeking to use land must obtain the consent of the aboriginal title holders. What that consent entails, though, is not clear from the judgment. Still, if a government proceeds with a project that does not have the prior consent of First Nations peoples, the ruling says “it may be required to cancel the project upon establishment of the title…”
Read more here.

2.    Supreme Court rules in favour of Province over Grassy Narrows First Nation Logging rightslogsmall
In a matter of weeks after the Tsilhqot’in decision the Supreme Court ruled against the First Nation in a logging dispute. The key difference with the in Tsilhqot’in decision was that the Grassy Narrows First Nation had an existing treaty agreement so Aboriginal title did not apply. And yes you will likely need a law degree to understand and interpret these two rulings together.

3.    Hereditary Chiefs of Gitxsan First Nation serve eviction notices to rail and logging companies
In the wake of the Tsilhqot’in Supreme Court Decision, a number of First Nations issued eviction notices to companies to leave their territory for a dispute over treaty talks with federal and provincial governments.  Check out the link here.

4.    Prentice will not sell Alberta Land title Registry.    
Apparently the privatization of the land title registry is not on the table in Alberta anymore according to its pre-election Premier, Jim Prentice. Although Alberta is often positioned as the most “pro-private sector” of the provinces distinct from its neighbour on the Left Coast, BC  and the birthplace of Canada’s socialized healthcare system by Saskatchewan its neighbour to the east. One issue Saskatchewan clearly gets the business friendly nod is on land title privatization- Saskatchewan sold minority shares in its Information Services Corporation which retains its land title records in 2013 – while the land title system is 100% government owned in Alberta. Then again it was an election promise in Alberta

5.    Land Title Disputes persist in historic African-Nova Scotian communities outside of Dartmouth
While Canada was the end of the Underground Railway bringing runaway slaves to freedom north of 54’40, the history of the black Canadian community in Canada was still a struggle against racism and oppression when they arrived. One of the legacies is the challenges of land title in these communities outside of Dartmouth, Nova Scotia. A recent report has brought these issues into perspective.

What was your favourite title related story of 2014?    Send us your comments, we’d love to hear from you!

Dec 4 | 2014

Broker’s corner | Private equity — the canary in the mineshaft?

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private equity

First of three look-aheads for 2015

In the old days, decades before the advent of testing technologies, coal miners used canaries to test the air quality in mines for poisonous gases like methane and carbon monoxide—the poor birds were the most sensitive bellwethers for what the miners couldn’t sense themselves.

2015’s just around the corner.  With the Federal government’s 2012 B20 guidelines now heading into their third year, the refinancing marketplace, hard hit by those guidelines might well ask: what are the odds equity take outs might be the “canary in the mineshaft”—a use case to detect just how fragile government regulation has left this sector? And what of innovations elsewhere?

We’ll scope out the data here and then look ahead over the next two posts to brokers’ own “refinancing” thinking: a sharp look at the do’s and don’ts of investing in marketing communications and branding and, finally, a look at why the prospects for an end-to-end solutions toolkit for brokers have never been better.

CAAMP’s 2014 data for equity take outs documents that 11% of homeowners took equity out of their home in 2013/2014, with the average funding at some $55,000. Up-shot? Total equity takeout during the past year stands at $63 billion. And where did the money go? No surprise here: debt consolidation and repayment (about $20.6 billion); next up, $17.4 billion for home renos/repair, then $7.7 billion for investments, $6.6 billion for non-real estate (including university tuition/residence), and $10.3 billion for “other” purposes.

Here’s the canary: it’s the US, where market reaction to the subprime horror show of 2008-10 bred several highly innovative equity takeout strategies, the most intriguing of which is the rise of private equity and the commercialization of mortgage equity instruments.

One thing’s certain—the market abhors a vacuum: according to Inside Mortgage Finance, 24% of US real estate equity loans Q1-Q3 2014 were made by non-bank lenders. In the backwash of massive lawsuits, stringent banking standards and intense media scrutiny, traditional US banks have pulled back—way back, in some cases—from the mortgage industry.

In the US, mortgage brokers see this as very good news indeed, as equity loans were dying off, largely, as in Canada, because of tighter regulation (perhaps a good thing, given the precedent) and complex reporting requirements (a mess, according to EXPERT/ease’s research). For US property owners (and owners of multiple properties, especially), this is terrific news for 2015.

Historically, this species of US financing was pegged to the personal financial state of the borrower; now the US regulations allow the loans to be made solely on the property (or property portfolio) itself. These are commercial loans, not residential—and the market’s being driven by lenders seeking to place idle cash and portfolio customers rolling over multiple loans into one portfolio. The first products to market are adjustable rate mortgages, with 30-year amortizations and LTVs up to 75%; the US origination fee structure applies, of course.

Will the US “canary” inspire Canadian deal-making ingenuity in this space? We’ll see in 2015.