While banks could raise their lending standards for mortgages, they went to the government for lending changes because banks aren’t the only institutions that offer mortgages. They’re not generally worried about people paying off their mortgages – if they default, CMHC has them covered – they’re worried that people will default on their credit cards before defaulting on the mortgages that some broker arranged with a lender with looser rules. That could cost the banks a lot of money, so they want regulations tightened up so that they don’t get hit just because someone else is lending money like candy. That’s not to say that people shouldn’t be more careful about the loans they choose to take – but for many people, if a lender says “you can afford this!”, well they’re the experts, so they take the experts word for it.

Personally, I would like the government to tighten up lending standards back to where they were before the Conservatives dropped them to 40 yrs, 0 down. Bring back 25 yrs, 20% down!

I live in Victoria, and I believe that’s the only way the sanity will return. I have $100,000 that I’d like to use as a downpayment for a house without putting myself into debt for 30 years. But the way things stand, I can’t.

I also work in the insurance industry and people that complain about high premiums have no idea of the amounts awarded by courts for injuries (incredible!) and the amount of property damage that can result from a severe storm in an ubran area. Between the hail/wind/sewer backup damage for one single storm the costs can be in millions. (I live in rural Alberta and ONE sewer backup claim in a home can result in a $40,000 to $50,000 claim if the basement is finished and that’s a conserative amount.) As Sandy said I want my insurer to be profitable AND pay out the insured claims covered in my contract.

By the way, comparing Canadian and American insurance is like comparing fruit, apples and oranges that is. They’re both similar (i.e. fruits) but they also have some huge differences.

Just my thoughts from over 20yrs in the business.

I only purchased the bed, then it was my responsibility to call them back and ask for my available credit to be reduced. Lending companies are just ludicrous and too willing to help you sink.

Working with a mortgage broker provided us with an opportunity to consider doing a mortgage switch to obtain an even better (below prime rate) variable rate. However, despite having steeler credit and no payment defaults on our mortgage (and the mortgage already “insured” under CMHC), we were still turned down by one lender due to the line on my DH’s Notice of Assessment that showed a negative number (he is self employed). Lenders do use other conditions than just your credit score when determining if you are client they wish to take on.

I already have an investment property with a mortgage on it, and the mortgage broker offered me 511,000- extra for a mortgage for my property to live in.

That is completely ridiculous, so I told him there is no way I am taking all that money and my plan is to buy for around 325k.

He told me I was the first person ever to turn down the money.

S

“Isn’t it ridiculous that our banks went hat in hand to The Minister of New Rules, begging for some relief from their own lending stupidity. Really? Dumb Canadians have no control when it comes to borrowing and you, Oh Mighty Minister, must help them. What about the stupid lenders that gave all that credit to Canadians?”

Gail, moments before you typed this paragraph, you essentially said that government should not interfere with Canadians’ ability to borrow, since we do not need “to be saved from ourselves”. I used to work for a government student loan centre, and you would be shocked by the number of people that didn’t make loan payments because they changed addresses and felt that the banks should FIND THEM if they really wanted their money, therefore they are not at fault. Yes, the banks could have been more strict in their lending practices, but aren’t we all adults that don’t need Big Brother to tell us how to manage our finances? Wasn’t that your original point? How can you argue against government control and advocate lending control in the same breath? Either we know how to think for ourselves or we don’t–which is it?

Secondly, the reason that beacon scores are so widely used is because it removes human error from the equation. Would you like to be at the mercy of a cranky bank officer that didn’t sleep because their baby kept them up all night? Or receive double the amount of affordable credit because someone wants to pad their commissions or hates to say no to people? When something is completely subjective, that means that it is open to interpretation and opinion. Would you like your ability to buy a home to rest solely on someone’s opinion? I know I wouldn’t!

I’ve made mistakes regarding my credit, and I’ve realized the error of my ways and have been working very hard to correct them. But I’ve never once blamed a lending institution for giving me too much credit. The bank didn’t take me out and make me pay for meals and clothes and sundry items–that was all me. And if you fear for your self-control, reduce the limit on your credit cards to prevent over-spending. I don’t buy into the “big bad bank” theory when it comes to spending. Interest rates, however, are another story…

Credit scores are NOT the only thing the bank looks at…we still look at collateral and capacity to pay etc…

We as a society do indeed need laws to protect us from ourselves…common sense is getting harder and harder to come by…whether it’s in credit, driving and cell phone use, seatbelts etc…

The bank I work for does have the strictest lending guidelines of the Big 5 and I make no apologies for it…we should be strict and careful…not just for our business but for the client’s sake as well!…because let’s face it, when credit is granted and the client ends up with too much credit it’s always because the lender “was stupid and gave too much credit”…and not at all because the individual went all over town signing up for every credit card they could get their hands on and then racking them all up…maybe if people took responsibility for their own actions we wouldn’t need new laws to keep us responsible…just my humble opinion….

Why isn’t it like cars. When you renew your car or even motorcycle registration every year, you have to show your insurance papers. So why shouldn’t you have to show your house insurance papers every time you renew your mortage, or every 2-4 years else your mortage is increased to include insurance.

I could go miles arguing about my desire to live my life the way I want, but I guess this path of arguments is not seen from your side of the fence.