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These last few weeks have been the most frustrating ever working with the high-ratio insurance companies. Even when a client fits their written guidelines, some are still getting turned down. We've seen more declines than I've seen in my 25 years in lending. . . sooooo maddening!

It may be frustrating but it’s a reality brokers must face every day, according to players dealing with tightened underwriting from mortgage default insurers.

“The two insurers are independent businesses that are allowed to make their own approval decisions; one very odd decision cost me $818,000 mortgage yesterday, the client was so mad they did not even give me a chance to switch lenders and insurers, they felt insulted that the insurer had rejected the property,” Ron Butler of Verico Butler Mortgage wrote on MortgageBrokerNews.ca. “Yes, insurer decisions cost us money -- I get it -- but these are the companies that are on the risk if a mortgage goes sideways; they must be allowed to make their own underwriting decisions.”

The comment stemmed from an article about the increased tightening among mortgage default insurers – causing even approved deals to fall apart at the last minute.

And the insurers are especially conservative with self-employed clients, who also have to deal with stricter underwriting from lenders.
“The insurers aren’t listening to the lenders,” Morris Briglio of Verico The Mortgage Advantage told MortgageBrokerNews.ca. “I had a case where two lenders approved the deal but the insurers wouldn’t … it is increasingly difficult for self-employed buyers.

Mortgage Broker News

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Why Canada’s market is undervalued

Canadian real estate hasn’t reached its full potential, according to one real estate mogul’s advisor.

“Canada is a vibrant economy and some people ought to step in and take advantage of it,” said George Ross, executive vice president and senior counsel to the Trump Organization. “I think it’s under-utilized – not over-utilized.”

Ross has been advising Trump since the 1970s and has worked with the real estate mogul since 1996. He is also featured in “The Apprentice.”

According to Ross, your investor clients should play the long-game when it comes to Canadian real estate.

“I don’t think the buy-sell or the short sale is the answer,” Ross told BNN. “[Real estate investors] are attracted because of the money, but they don’t talk about how long it takes to get the money and they don’t take about the fact you could be in there and not recover what you invested.”

It’s an interesting stance, considering CMHC’s recently released data is calling for fairly stagnant growth in terms of starts and prices over the next two years.

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Survey reveals sentiment of condo investors

Optimism and confidence in the Toronto and Vancouver condo markets remain strong, with a new CMHC survey revealing 55 per cent of investors anticipate value gains this year.

This is a rise on the 48 per cent who said the same in response to CMHC’s 2013 survey.

The 2014 Condominium Owners Survey (COS), which was published Friday, also found that confidence is significantly higher in Toronto than it is in Vancouver, at 64 per cent and 42 per cent, respectively.

It should be noted, however, that the polling took place before the brunt of the oil shock took hold, which has had a muted effect on both the Toronto and Vancouver economies.


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