Canada to purchase up to $75 Billion of Mortgages From Banks

[LargoWinch]

The disease is spreading all over the globe and fast! Is there a island of free market left somewhere?

From the article:

ensure that higher borrowing costs don’t crimp lending.

I am sorry, but what is wrong with lower prices? I want lower prices when finally decide to buy my house. Oh I forgot: it means lower taxes for them.

BTW, Canada's GDP is roughly 1/10 of the US. So this "repo" from the banks is relatively just as big as Paulson's bailout.


Canada Purchases C$8 Billion of Mortgages From Banks

By Greg Quinn

Jan. 14 (Bloomberg) -- The Canadian government bought C$8 billion ($6.46 billion) of mortgages from banks, as part of a program to buy as much as C$75 billion of the securities and ensure that higher borrowing costs don’t crimp lending.

Canada Mortgage and Housing Corp., a state-run agency, announced the purchase today on its Web site. The transaction is aimed at helping banks fund new loans to consumers and businesses. Finance Minister Jim Flaherty tripled the amount the government was willing to buy.

Continued Here:
http://www.bloomberg.com/apps/news?p...g&refer=canada

[CanuckinTX]

Re: Canada to purchase up to $75 Billion of Mortgages From Banks

Funny that my friends and family in Canada have always been so quick to say their lending standards didn't deteriorate as bad as in the US so they never expected much of a RE market slowdown.

How is it there are so many bad loans then?? Or are these loans not bad, it's just to free up credit?

[Spartacus]

Re: Canada to purchase up to $75 Billion of Mortgages From Banks

Of course they'll support housing prices ... they all drank the kool-ade a long time ago. Why did you expect them to back out now?

"housing makes people invest in the community more"
(although they never explicate the conclusion, "renting is for lowlifes who don't care about the community" )

The disease is spreading all over the globe and fast! Is there a island of free market left somewhere?

[LargoWinch]

Re: Canada to purchase up to $75 Billion of Mortgages From Banks

Funny that my friends and family in Canada have always been so quick to say their lending standards didn't deteriorate as bad as in the US so they never expected much of a RE market slowdown.

How is it there are so many bad loans then?? Or are these loans not bad, it's just to free up credit?

The loans are sssooo good that the banks are making us tax payers a favor. Aren't they nice?

[Spartacus]

Re: Canada to purchase up to $75 Billion of Mortgages From Banks

Funny that my friends and family in Canada have always been so quick to say their lending standards didn't deteriorate as bad as in the US so they never expected much of a RE market slowdown.

How is it there are so many bad loans then?? Or are these loans not bad, it's just to free up credit?

I know some people in low places in Canadian banks & they agree the Canadian banks were on the way to lowering standards but they didn't ramp up those efforts before the crunch started.

A couple of smaller bank-like entities that tried to target subpime in Canada from 2005 onward have had a hard time finding customers in Canada. Harder than the US, anyway. Canadian subprime borrowers seem less easy to lure than US counterparts. Makes one wonder how they got to be subprime, if they are so cautious.

Canadian banks are more cautious. I believe there were no payment-optional (payment gets added to the principal) mortgages written in Canada. Teaser rates were nowhere near as low. You must deposit $50 million with the Superintendent of Financial Institutions (before depositing with the Central Bank, on top of any operating costs) before being allowed to operate as a bank. I've heard much, much smaller numbers for US banks.


What they mostly agree on is that those with good credit scores took higher debt burdens than their counterparts in the US, at which point I point out that a lot of Canadians are a paycheque away from a bad credit rating ... they've got a good credit rating only because they've never been stress tested.

so they never expected much of a RE market slowdown.

This is the part I disagree with when my bankster buddies say the same thing.

[CanuckinTX]

Re: Canada to purchase up to $75 Billion of Mortgages From Banks

Quote:

Originally Posted by CanuckinTX so they never expected much of a RE market slowdown.

This is the part I disagree with when my bankster buddies say the same thing.

Yeah, they never like hearing me say "You sound like everyone in California when I left in '05."