Tag: CIBC

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TORONTO CONDO MARKET REPORT: SUBPRIME LENDERS DODGING CANADA’S MORTGAGE RULES?

toronto condo marketToronto condo market report: Introduction

The subprime lending industry is alive and well in Canada; that is the subject of this Toronto condo market report. In fact, subprime lenders hold almost 8% of Canadian mortgages, which is a hefty 37.8% increase compared to the same quarter last year. And, this is the sixth consecutive quarter we saw the subprime lending industry grow. It’s now at its highest level in 10 years. Although many pundits blame the spike in prime lending to the new mortgage stress tests, it’s clear that this trend began years before stress testing was introduced.

Toronto condo market report: What are subprime loans and how do you get one?

  • Any loans that are for borrowers that do not have a good credit score
  • They’re done through private lenders, typically accessed through a mortgage broker
  • Private lenders are not federally regulated like the banking industry
  • Private lenders charge steep prices

Toronto condo market report: Why do people take subprime loans?

You may be asking why anyone would take a subprime loan and pay considerably more money than they would at a bank.

  • Transunion estimates that 11.9% of the 28.4 million Canadian consumers with credit profiles are subprime which means that they wouldn’t qualify for a mortgage from the bank
  • A borrower with excellent credit might resort to a subprime loan because the bank won’t lend them as much money as they need
  • Even a person with bad credit or no credit, there is a private lender willing to give a subprime loan

Toronto condo market report: How is subprime lending affecting Toronto’s condo market?

For some reason known only to the government, they don’t track subprime lending. CIBC Economics show that over:

  • 1 in 10 Toronto condos registered in 2017 was attached to astronomically high mortgage rates
  • 17.4% of owner-occupied condos registered in 2017 had a mortgage rate above 9%
  • 16.2% of condo investors with units that registered last year were paying more than 9%

Toronto condo market report: What’s going to happen if the market starts to soften?

The problem with paying astronomically high-interest rates is what’s going to happen if the market starts to soften? How will these condo owners with subprime loans get their money out, let alone make a profit?

The mortgage stress tests are in place for a very good reason. To ensure that Canadians don’t buy houses or condos that they can’t afford. Trying to avoid the system by going to private lenders and paying high-interest rates can put you in a financial danger zone.

Toronto condo market report: Are you in a financial bind?

If you’re in a financial bind because you’re living in a property that you can’t afford, or for any reason, you need professional help now. With a cumulative 50+ years of experience, the Ira Smith Team has helped people just like you who are facing a financial crisis. Give us a call today. We can help you overcome your financial difficulties Starting Over, Starting Now.

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MANAGING FAMILY FINANCES: DO YOU NEED FAMILY FINANCIAL PLANNING AT 65 AND BEYOND?

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managing family finances

Managing family finances: Introduction

Many Canadians are under the mistaken impression that financial planning is a young person’s game. After all, you’re now retired and you have your pension(s) and perhaps some savings. What financial planning is there to do for managing family finances? I’m here to tell you that it’s never too late to have a financial plan. You may not realize it but there are many financial decisions still to make – even after the age of 65.

Managing family finances: CIBC financial planning advice

Lana Robinson, executive director, CIBC financial planning and advice, says it’s never too late to plan. The biggest mistake for those heading into their 70s and 80s would be not to have a plan or mistaking a budget for a plan, she said. They might say ” ‘Well I have a budget and I’m living to my budget‘ but is that really a plan?

Have you:

  • taken into account all the needs you might have?
  • anticipated the cost of healthcare?
  • Figured out whether your goal is to have in-home care as opposed to living in a retirement home?

Managing family finances: Can you answer these seven questions?

  1. Should you take your Canada Pension Plan (CPP) at 65 or defer it?
  2. Should you take your Old Age Security (OAS) at 65 or defer it?
  3. How much do you know about Registered Retirement Income Funds (RRIFs) and annuities?
  4. Do you need to rebalance the risk in your investment portfolio?
  5. What is the most financially helpful way to use your RRSPs?
  6. What are your financial goals and what are these goals going to cost you?
  7. Are you in debt?

Managing family finances: Don’t retire in debt

If we can give you one piece of extremely valuable advice for managing family finances it’s DON’T RETIRE IN DEBT! If you do, your retirement will be extremely stressful trying to figure out how to make ends meet. Family financial planning is not fun when you need a financial plan to get out of debt. But, don’t despair – we can help.

The Ira Smith Team has many years of experience helping people just like you facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. We approach every file with the attitude that financial problems can be solved given immediate action and the right financial plan. Give us a call today and take the first step towards a debt free retirement.

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Brandon Blog Post

BANK STAFF SALES TARGETS: WHAT CAN CANADIAN CONSUMERS DO TO PROTECT THEMSELVES?

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Bank staff sales targets: Introduction

All hell broke loose when the CBC’s Go Public exposed a wide-spread banking problem – bank staff sales targets. The report stated that tellers try to meet their bank staff sales goals by signing customers up for products and/or services that they may not need.

Bank staff sales targets: It isn’t just one bank!

Although this article focused on the employees of one Canadian Chartered Bank who initially came forward to Go Public, the problem caused by bank teller sales goals is rampant across the banking industry and has been for some time. And, in fact it’s a badly kept secret that this is a common practice at every bank.

After the story broke, employees from all five of Canada’s big banks came forward to Go Public with stories of how they are required to up sell, trick and even lie to customers to meet unrealistic sales targets and keep their jobs.

Bank staff sales targets: Meet the sales goals or get written up, or worse

This isn’t just hearsay or a smear campaign against the banking industry; documents obtained by Go Public show tellers who fail to reach their sales goals are called “underperformers” and placed on a “Performance Improvement Plan”. This Plan involves daily coaching and monitoring by managers.

If sales performance doesn’t improve, warnings are given to underperforming employees that “employment could be terminated.” Approximately 1,000 emails from RBC, BMO, CIBC, TD and Scotiabank employees described the pressures they were under to meet sales revenue targets while being monitored weekly, daily or hourly. The message was loud and clear – it doesn’t matter how you hit your numbers as long as you do.

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Bank staff sales targets: Who is most at risk from these sales tactics?

Unfortunately, as with most financial schemes, the most vulnerable are the ones most at risk from these bank teller sales targets. Seniors and new immigrants are most likely to believe advice from their bank without further analysis. However, in our increasing common sales culture, we’re all at risk. After all, if you can’t trust your own bank to manage your money, who can you trust?

Bank staff sales targets: What should consumers do to protect themselves?

The sad truth is that you can no longer assume that your bank is your trusted financial advisor and has your best interests at heart. Consumers need to be vigilant. If a teller or a financial services advisor recommends a product or service ask questions:

  • How much does it cost?
  • What are the fees?
  • Why do I need it?
  • What will the financial benefit be to me?

Bank staff sales targets: Just say no

Very importantly, consumers need to learn how to say no. Don’t be bullied into signing up for products and/or services that you don’t need because of bank staff sales targets. Clearly there needs to be more regulation in the banking industry and hopefully there is an investigation underway.

If you are experiencing debt issues for any reason please come to a professional trustee. We’re strictly licensed and we can’t profit from giving bad advice. The Ira Smith Team is here to help. Our commitment to you is to bring value added solutions that fit your unique issues and circumstances. Contact us today and Starting Over, Starting Now you can conquer debt.

 

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