New Mortgage Rules Could Make Buying A House Even Harder

[00:00:00] Welcome to the Canadian Real Estate Investor, where hosts Daniel Foch and Nick Hill navigate

[00:00:06] the market and provide the tools and insights to build your real estate portfolio.

[00:00:13] Welcome back to another episode of the Canadian Real Estate Investor podcast.

[00:00:17] My name is Nick Hill and I'm joined today and every Tuesday and Friday by my good friend

[00:00:23] Mr. Daniel Foch.

[00:00:24] Hey!

[00:00:25] Happy to be here.

[00:00:26] Got a handful of really good episodes.

[00:00:28] I feel like we're like in a in a good little flow right now.

[00:00:31] Yeah, so we're just gonna try and keep it up.

[00:00:34] Today, we're going to be talking about buying real estate, which is going to be getting

[00:00:39] a little bit more difficult these days, I think.

[00:00:42] Yes, it is, Dan.

[00:00:45] It's tricky now and unfortunately, it's likely to just get harder.

[00:00:50] In today's episodes, we cover some of the most recent changes and discussions in the

[00:00:56] mortgage space.

[00:00:57] We look at Ausfee's new rules that limit leverage.

[00:01:02] We look at if 30-year amortizations are something that we should be excited about.

[00:01:08] And we talk about a crackdown on mortgage fraud by the Feds by allowing mortgage lenders

[00:01:16] to link directly to the Canada Revenue Agency, otherwise known as the CRA.

[00:01:23] Yeah, so before we do that, there's a lot to discuss, but we would like to kick things

[00:01:31] off on a more positive note since based on what you're describing, it sounds like

[00:01:35] we got a pretty negative episode ahead.

[00:01:36] So, a wonderful review from one of our lovely listeners.

[00:01:40] So if you want to support the show, we would always appreciate if you left us

[00:01:43] a five-star review either on Spotify or Apple Podcasts or whatever podcast platform you're

[00:01:49] listening to this on.

[00:01:50] And if it's on Apple, you can actually type in a cool little note to us.

[00:01:54] One of the other things we really like is if you just take a screenshot of yourself

[00:01:57] listening to the show and tag us and we'll share it on our Instagram.

[00:02:02] And then you can meet other people who listen to the show.

[00:02:05] So we have five stars here from Avangemer.

[00:02:09] Is that right?

[00:02:10] I don't know.

[00:02:11] They put a nice French twang to it.

[00:02:13] Avangemer?

[00:02:15] Right.

[00:02:16] Okay.

[00:02:17] Oh, it's Avangemer.

[00:02:20] Oh, we know who this is.

[00:02:21] Yeah, there you go.

[00:02:22] Thank you.

[00:02:23] Thank you.

[00:02:24] We were just on a call with this lovely gentleman.

[00:02:26] Yeah.

[00:02:27] Awesome listen, it says.

[00:02:29] I don't ever write in to review any podcast, but I felt this one was a little different.

[00:02:34] I constantly look forward to getting new episodes to find out the latest updates

[00:02:37] on the market and the economy.

[00:02:39] And Nick, do a great job breaking down complicated scenarios for everyday

[00:02:43] persons such as myself.

[00:02:45] Keep up the great work guys.

[00:02:47] Can't wait to do a meetup.

[00:02:49] Love to hear it.

[00:02:51] Thank you as always to you and to anyone else that has taken the time

[00:02:57] to write us a review as Dan said.

[00:02:59] Much appreciated.

[00:03:00] I'm glad they took the time to mention meetups as well.

[00:03:03] We had a lot of really good meetups.

[00:03:04] We're going to do a whole episode, I think on meetups, where we have them,

[00:03:06] who's hosting them.

[00:03:08] Who comes out of them, what you should do to prepare for them.

[00:03:10] Yeah.

[00:03:11] What you should do after them.

[00:03:13] How you can get involved.

[00:03:15] Because we do have a new partnership, Coast to Coast, Sherwin Williams

[00:03:18] is sponsoring meetups and I'm sure you've heard their ads on the podcast by now.

[00:03:21] I see this light switch and I want to paint it white.

[00:03:25] Is that what you do?

[00:03:27] That's what every landlord does isn't it?

[00:03:29] That's Rolling Stones paint it black with the landlord remix.

[00:03:33] Amazing.

[00:03:34] Paint it white.

[00:03:35] Amazing.

[00:03:36] Make sure you copyright that.

[00:03:38] That's good.

[00:03:39] That isn't a killer original I think, I don't know.

[00:03:41] Yeah, that is good.

[00:03:42] It's really good.

[00:03:43] Yeah, Sherwin Williams, obviously natural fit here because landlords love painting things.

[00:03:47] We need it.

[00:03:48] Yeah, honestly.

[00:03:50] Biggest ROI.

[00:03:51] Yeah, so if you're a listener and you have a meetup,

[00:03:54] if your meetup group grows to 50 or more people

[00:03:57] and we're seeing an average of 20 plus people going to those meetups,

[00:04:00] Sherwin Williams will come out, they'll bring a bunch of sweet swag.

[00:04:03] We've seen the swag, it's awesome.

[00:04:05] It's cool.

[00:04:06] Very cool.

[00:04:07] Their logo is really cool.

[00:04:08] Yeah.

[00:04:09] And it's basically like the landlord version of the earth.

[00:04:12] Yeah, well I love that they were getting some controversy about their logo

[00:04:16] and they're like, no we're not changing it.

[00:04:18] It's 125 years old, we don't care.

[00:04:20] It's like come on.

[00:04:21] Yeah.

[00:04:22] Love to hear it.

[00:04:23] Yeah, I really excited about the meetup.

[00:04:25] So stay tuned for that episode and we would love to see you out at one.

[00:04:28] They're free, they're full of value.

[00:04:30] We're not trying to sell you anything,

[00:04:32] you connected with other real estate investors

[00:04:35] because that's what you should be doing.

[00:04:36] Listen, if you're not a real estate investor,

[00:04:38] not everyone that goes is an investor.

[00:04:41] We've got contractors.

[00:04:42] Yeah, we've kind of changed them to like real estate meetups now as well

[00:04:45] because I find like there's a lot of like investors slash realtors,

[00:04:48] a lot of people in the profession that go...

[00:04:50] Just people involved in the industry that are looking to,

[00:04:53] you know gain more exposure to other people in the industry, right?

[00:04:56] Yeah.

[00:04:57] And we are trying to sell you something.

[00:04:58] We're trying to sell you on going to another meetup.

[00:05:00] Yeah.

[00:05:01] Hard sell here.

[00:05:02] Yeah.

[00:05:03] Anyway, Nick, we digress as is tradition.

[00:05:05] As usual, yeah.

[00:05:06] Let's get into the changes that we are about to see

[00:05:10] in the mortgage market day.

[00:05:12] And the first piece we're going to look at is

[00:05:14] the office of the superintendent of financial institutions,

[00:05:20] OSPY, which is Canada's bank regulator.

[00:05:23] If you listen to the show, you've probably heard them

[00:05:26] come up once or twice in conversation.

[00:05:28] So they are getting ahead of any rate cuts,

[00:05:32] which in some people's schedule are late by now,

[00:05:36] with new limits on leverage.

[00:05:39] So OSPY notified lender to prepare for a new loan to income.

[00:05:44] That's LTI, loan to income rule.

[00:05:47] The new rule will limit federally regulated financial institutions.

[00:05:53] That's FRFIs.

[00:05:56] I think that's a new initialism here on the show.

[00:05:58] We call those FRFIs.

[00:05:59] FRFIs, there we go.

[00:06:01] Mortgage portfolios to a multiple of the income used to service those loans.

[00:06:06] OSPY says the new limits are designed to help limit a buildup

[00:06:12] of risky leverage during low interest rate periods.

[00:06:16] Sound familiar whatsoever, Dan?

[00:06:19] Yeah.

[00:06:20] I mean, it seems like they're trying to lean in a little bit on rate cuts,

[00:06:24] which you mentioned, like, you know, as rates start coming down,

[00:06:27] they want to make sure people don't just start piling on debt again

[00:06:29] because we kind of ran into a bit of an issue there.

[00:06:32] So on the rate cuts piece, because you mentioned that a little bit

[00:06:36] at the beginning of your beautiful monologue there,

[00:06:39] inflation is now, it came in today, April 16th,

[00:06:42] when we're recording this came out this morning

[00:06:45] that inflation went up again marginally,

[00:06:48] like went up from 2.8% to 2.9%.

[00:06:51] But that's the wrong direction, and we're still on the upper bound

[00:06:53] of that two to three range that the Bank of Canada talks about.

[00:06:56] And the US is, their job numbers are strong,

[00:06:59] their inflation's strong.

[00:07:01] Bit of a different story down there.

[00:07:03] I mean, I listen to Brandon and Samo talk about this a lot,

[00:07:05] and Samo especially when he's in regards to his macro,

[00:07:08] like I think his macro view is really good.

[00:07:10] And he's sort of of the opinion that if we don't see a cut

[00:07:13] like in the next month or two, or like basically by June,

[00:07:16] then we probably won't see one until after the election.

[00:07:19] And this is where it becomes a problem for the Bank of Canada

[00:07:22] because obviously Canadians are suffering a lot more than consumers

[00:07:25] in the US it seems.

[00:07:27] We have mortgage delinquency rates rising,

[00:07:29] bankruptcies rising, et cetera.

[00:07:31] So I think the Bank of Canada probably ought to be

[00:07:33] a little bit more of a hurry to cut.

[00:07:37] Yeah.

[00:07:38] Yeah.

[00:07:39] I mean, and they're, in theory,

[00:07:42] we're supposed to be kind of in lockstep with the Fed at this point.

[00:07:45] But we might be pushed to make a very tough decision.

[00:07:49] The challenge is like another one.

[00:07:51] If they cut, then like you have to think of the interest rate

[00:07:54] as like the rate of return on currency.

[00:07:56] So if Canada cuts our interest rate,

[00:07:58] then our currency becomes less valuable,

[00:08:00] which means that people are less likely to buy it,

[00:08:02] which means that man,

[00:08:03] that it gets devalued against the US dollar.

[00:08:06] And then now you've got imported inflation

[00:08:08] because we're importing a ton of,

[00:08:10] there are largest trading partner,

[00:08:11] most everything that we buy from it.

[00:08:13] Other places in the world comes into USD

[00:08:15] and now all of a sudden goods start to cost more.

[00:08:17] So it's a very fine line.

[00:08:18] I'm not, I'm glad I'm not Tiff MacLum.

[00:08:20] Speaking of our money becoming worthless,

[00:08:24] holy man, I, so I'm very lucky I'm headed to...

[00:08:28] Did you leave the house the other day for the first time?

[00:08:30] I'm headed to Italy tonight,

[00:08:33] which is very exciting.

[00:08:34] Don't worry, podcasts are still going to come out.

[00:08:36] We don't miss.

[00:08:37] Nick's just going to be speaking Italian.

[00:08:38] Yes.

[00:08:40] We went and exchanged $1,500 for euros yesterday.

[00:08:45] Didn't even crack a thousand dollars.

[00:08:48] $980, 980 euros, sorry for 1500 bucks.

[00:08:54] So man, tough times to be the Canadian,

[00:08:58] bad day to be a Canadian dollar.

[00:08:59] Yeah.

[00:09:00] Anyway, so you're probably wondering or asking

[00:09:03] what does this actually mean going back

[00:09:05] to the mortgage piece and off-seed?

[00:09:07] Well, mortgage portfolios will soon be limited

[00:09:10] to 4.5 times borrower income in a quarter.

[00:09:15] Only a small share will be allowed to exceed that limit.

[00:09:18] And that is designed to reduce portfolio risk.

[00:09:23] Sounds like a pretty good thing.

[00:09:24] The loan to income, the LTI measure we are implementing

[00:09:30] in a portfolio test is designed to prevent

[00:09:33] the buildup of highly leveraged loans

[00:09:35] during low interest rates period, rate periods.

[00:09:38] And that is from a spokesperson at OSPV.

[00:09:41] Yeah.

[00:09:42] I think you're going to tell me a little bit

[00:09:44] about what these loan to income ratios actually are.

[00:09:47] Yeah, so I just wanted to read this tweet

[00:09:51] from Daniel Weiner who's a friend of mine.

[00:09:53] He helps me with the Twitter spaces

[00:09:54] and great follow on Twitter.

[00:09:56] He's a mortgage broker, mostly in the private space.

[00:09:58] You know other mortgage brokers?

[00:09:59] Yeah, I know.

[00:10:00] I'm sorry.

[00:10:01] Yeah, he said today,

[00:10:03] OSPV clarified their stance on loan to income limits,

[00:10:07] portfolio level not individual.

[00:10:09] So this is interesting, right?

[00:10:10] So if you're an investor,

[00:10:12] this is going to be a big headwind, right?

[00:10:15] And this is really trying to bring down

[00:10:17] some of that leverage on retail investors.

[00:10:20] The idea is to prevent mass leveraging

[00:10:22] at different lenders.

[00:10:23] So you'll actually need to show what your entire

[00:10:25] loan to income like is across your whole portfolio.

[00:10:29] Now OSPV I think is like this regulation

[00:10:32] really only applies to your A lenders,

[00:10:35] let's call it, so your banks,

[00:10:37] charter banks.

[00:10:38] Yeah.

[00:10:39] And...

[00:10:40] Who do quite a few mortgages by the way.

[00:10:42] Yeah, but so this could push more to B side.

[00:10:45] It includes first, second mortgages

[00:10:48] and HELOCs on both your owner occupied

[00:10:51] and your rental.

[00:10:52] So again like for people who have bigger portfolios,

[00:10:55] it's not that...

[00:10:57] Like I don't think renewal is going to be

[00:10:59] an issue because it does exclude

[00:11:01] insured loans and renewals,

[00:11:03] which is probably a good thing

[00:11:04] because it's kind of taking away

[00:11:05] some of the excess buying power

[00:11:09] for investors against like a first-time home buyer

[00:11:11] who would be using an insured mortgage

[00:11:13] and reallocating that to...

[00:11:15] Just taking away that investor buying power

[00:11:17] and reallocating it to first-time buyers

[00:11:19] because they have renewed mortgages

[00:11:21] and so they don't...

[00:11:22] Or sorry, insured mortgages

[00:11:23] and so they wouldn't be capped by this.

[00:11:25] Anyway, so it's important to note that

[00:11:27] OSPV's role is to ensure functioning

[00:11:28] in sound financial systems.

[00:11:30] So they're not to protect individuals

[00:11:32] from risk or to tell fry fries

[00:11:35] which clients are too risky.

[00:11:37] However, generally speaking, a borrower

[00:11:38] is considered over-leveraged

[00:11:40] if their loan exceeds 450% of income

[00:11:43] but OSPV is eliminating excess leverage,

[00:11:45] not over-leveraged borrowers.

[00:11:47] Institutions are just being asked

[00:11:49] to balance their risk, right?

[00:11:51] Sounds fair.

[00:11:52] Yeah.

[00:11:53] The new rule is one of many being rolled out

[00:11:55] to reduce public exposure to private debt

[00:11:57] since the global financial crisis,

[00:11:59] global regulators have been working together

[00:12:01] to better quantify risk which has led to

[00:12:03] tighter lending especially when it comes

[00:12:05] to real estate investors which was a big

[00:12:07] issue when it came down to

[00:12:09] the market in the US and I know

[00:12:11] I think this couple paragraphs

[00:12:13] came from better dwelling and I know

[00:12:15] Steven Pinwasi has a really good thread

[00:12:17] on Twitter about how

[00:12:19] the investors kind of

[00:12:21] led that big down leg

[00:12:23] in that US crash.

[00:12:25] Yeah.

[00:12:26] Yeah.

[00:12:28] So at this point you might be

[00:12:30] wondering what we're talking about.

[00:12:32] We've already gone over what it means

[00:12:34] but why is this happening?

[00:12:36] That's the next question we're going to answer.

[00:12:38] The change is one if a series

[00:12:40] of expected adjustments

[00:12:42] to mortgage guidelines.

[00:12:44] Aussie says that the new portfolio test

[00:12:46] is intended to again

[00:12:48] prevent the buildup of highly

[00:12:50] levered loans during low

[00:12:52] interest rate periods.

[00:12:54] The regulator is particularly concerned about

[00:12:56] loans that are more than

[00:12:58] 4.5 times borrower

[00:13:00] income because they

[00:13:02] raise the probability

[00:13:04] of that borrower defaulting

[00:13:06] and increase a lender's potential

[00:13:08] losses. Two things we

[00:13:10] would like to avoid.

[00:13:12] And we saw this in real time.

[00:13:14] If you've been listening to the show we've been covering

[00:13:16] this for a long time. Remember the

[00:13:18] prolonged period of low interest

[00:13:20] rates that lasted way too

[00:13:22] long only then to go into

[00:13:24] another period in time

[00:13:26] where we experienced a

[00:13:28] very steep increase

[00:13:30] that was back in the spring of 2022.

[00:13:32] Now it's a lot easier to

[00:13:34] manage lots of debt

[00:13:36] in a low rate environment because

[00:13:38] simply the debt doesn't cost you that much

[00:13:40] but it becomes a lot

[00:13:42] more challenging for

[00:13:44] borrowers when rates rise

[00:13:46] and keep rising

[00:13:48] and then stay high.

[00:13:50] Yeah so it is interesting

[00:13:52] I'm looking at

[00:13:54] the Bank of Canada

[00:13:56] page that's indicators of

[00:13:58] financial vulnerabilities

[00:14:00] and they have

[00:14:02] this loan to income chart

[00:14:04] it actually shows loan to income ratio

[00:14:06] by and so share of new mortgages

[00:14:08] with an LTI loan to income ratio above

[00:14:10] 450% and you can see

[00:14:12] basically after 2022

[00:14:14] Q1 once rate hike started it fell off

[00:14:16] of a cliff. And it's not just because

[00:14:18] people are like de-risking and being like oh

[00:14:20] you know this is smart it's because

[00:14:22] interest rates are so high that they can't

[00:14:24] so right now the GDS and TDS

[00:14:26] ratio and the debt service coverage

[00:14:28] ratio on real estate investments so these are

[00:14:30] measures of your debt like

[00:14:32] the ability to service debt

[00:14:34] maybe we'll do a quick refresher on them after I

[00:14:36] read this next part of the article but

[00:14:38] basically those things are

[00:14:40] capping like those are what's limiting

[00:14:42] people's ability to get over 4.5x

[00:14:44] ratio

[00:14:46] right? Because that 450%

[00:14:48] LTI ratio over 450%

[00:14:50] is that 4.5x

[00:14:52] income and so

[00:14:54] the goal would be as rates come down which we just

[00:14:56] talked about rate cuts is to make sure that

[00:14:58] this line stays low

[00:15:00] the challenges from my

[00:15:02] perspective is like this is it's not just like

[00:15:04] limiting retail investors and

[00:15:06] making it hard to own a portfolio

[00:15:08] or

[00:15:10] scale a portfolio because you're capped based on

[00:15:12] loan to income

[00:15:14] it also kind of pushes you to more expensive debt

[00:15:16] if you want to scale right?

[00:15:18] So I don't know if it actually

[00:15:20] makes it clear

[00:15:22] their goal isn't to remove risk on

[00:15:24] you and I the investor their goal is

[00:15:26] to remove risk on the lenders and the financial

[00:15:28] system so which is kind of

[00:15:30] the main infrastructure that the country

[00:15:32] is built on

[00:15:34] so that's okay and I think

[00:15:36] that major

[00:15:38] financial institutions should have less

[00:15:40] risk and if individual investors want

[00:15:42] to take more risk then by all means do that

[00:15:44] and you ask for a quick refresher so before

[00:15:46] you go on I'm just going to quickly go

[00:15:48] over gross debt service and total debt

[00:15:50] service which we've covered many times in

[00:15:52] the podcast in a lot of the mortgage episodes

[00:15:54] so if you want more info on this go back

[00:15:56] and seek some of those out but

[00:15:58] GDS is the percentage

[00:16:00] of your monthly household income

[00:16:02] that covers your housing costs

[00:16:04] and it must not exceed

[00:16:06] 39%

[00:16:08] TDS total debt service

[00:16:10] is the percentage of your monthly household income

[00:16:12] that covers your

[00:16:14] housing costs and

[00:16:16] your other debts and it must not exceed

[00:16:18] 44%

[00:16:20] now Dan give me a quick reminder of

[00:16:22] what a debt service coverage ratio is

[00:16:24] yeah so the DSCR

[00:16:26] the DSCR as we're calling it the

[00:16:28] disker and

[00:16:30] it's basically the same

[00:16:32] it's debt service coverage ratio so I don't know

[00:16:34] if I said that but it's basically the same thing

[00:16:36] that you just described GDS and TDS but for

[00:16:38] an investment property and so

[00:16:40] it's a measure of the cash flow available to pay

[00:16:42] current debt obligations and it measures

[00:16:44] the properties cash flow versus its debt

[00:16:46] so basically just literally your cash flow

[00:16:48] divided by your debt

[00:16:50] lenders use the DSCR to determine whether

[00:16:52] business has enough net

[00:16:54] operating income to pay back its loans

[00:16:56] on a monthly basis so if your rent is

[00:16:58] I'll just

[00:17:00] if your rent is $1250 a month and your debt

[00:17:02] should be $1000 a month because

[00:17:04] usually they want to see a 1.25

[00:17:06] debt service coverage ratio in today's market

[00:17:08] okay so back to the article

[00:17:10] so we know what this is and why it's happening

[00:17:12] I guess the next question is will the test apply

[00:17:14] to borrowers like

[00:17:16] the qualifying stress test

[00:17:18] and the answer is no the portfolio test

[00:17:20] does not create a new hurdle for the

[00:17:22] individual home buyer trying to qualify

[00:17:24] for a mortgage loan instead

[00:17:26] it will track the bank's

[00:17:28] uninsured mortgages portfolios

[00:17:30] this measure does not apply to

[00:17:32] any one person as we said in the March

[00:17:34] 2022 statement it applies to the

[00:17:36] institution's portfolio of underwritten mortgages

[00:17:38] that originate that quarter

[00:17:40] and it needs to be managed by the institution

[00:17:42] mortgage strategist

[00:17:44] rob Mcclister said there will be

[00:17:46] no prohibition on an individual

[00:17:48] taking on a mortgage if the loan exceeds

[00:17:50] their income by more than

[00:17:52] 4.5 times even with

[00:17:54] a new test banks could allow

[00:17:56] an individual borrower to exceed the cap

[00:17:58] so long as the entire portfolio

[00:18:00] averaged 4.5 times

[00:18:02] or less he said

[00:18:04] exactly and so in conclusion

[00:18:06] how much of an impact will this

[00:18:08] new test have on the market

[00:18:10] well probably not much

[00:18:12] at first and again that's according to

[00:18:14] the gentleman

[00:18:16] that mortgage strategist that Dan

[00:18:18] just mentioned rob Mcclister

[00:18:20] but it will

[00:18:22] be felt once interest rates

[00:18:24] start to come down because the stress test

[00:18:26] for individual borrowers will carry a lower

[00:18:28] qualifying rate meaning

[00:18:30] the borrower will qualify

[00:18:32] for a larger mortgage

[00:18:34] and that means that loan

[00:18:36] to income ratios will go up

[00:18:38] still Mcclister said

[00:18:40] there will be many borrowers out there

[00:18:42] who won't exceed

[00:18:44] a loan of 4.5

[00:18:46] times income especially if they have already

[00:18:48] paid down a chunk of their mortgage

[00:18:50] and renewed this will bring down

[00:18:52] the overall ratio applied to the banks

[00:18:54] portfolio and allow them

[00:18:56] to make more high

[00:18:58] leverage loans so

[00:19:00] interesting stuff there

[00:19:02] Dan any final points here before we move on

[00:19:04] to next topic which

[00:19:06] is 30 year AMS

[00:19:08] yeah so I think that this is really

[00:19:10] a good

[00:19:12] point for us because we teach

[00:19:14] people how to make money in real estate

[00:19:16] and how to scale portfolios and we've been saying for a long time

[00:19:18] that you have to

[00:19:20] focus on income

[00:19:22] first as an investor everybody

[00:19:24] thinks about capital appreciation as your way

[00:19:26] to scale right through like I'm just

[00:19:28] going to buy this property and then it's going to go up in

[00:19:30] value and pull the equity out and I'm going to buy

[00:19:32] another one and that worked for a really long

[00:19:34] time but the reality is you

[00:19:36] literally based on this you will not

[00:19:38] be able to do that any longer

[00:19:40] and so it has never been

[00:19:42] more important to focus

[00:19:44] on portfolio income

[00:19:46] especially portfolio income relative to the

[00:19:48] price that you're paying how do we measure that

[00:19:50] cap rates a good way to do it right

[00:19:52] every deal that you get

[00:19:54] should bring you closer to doing the next deal

[00:19:56] in an environment where income

[00:19:58] is going to be the limiting factor because you

[00:20:00] now can only scale your portfolio to 4.5

[00:20:02] times income how do we increase

[00:20:04] the amount we can scale

[00:20:06] our portfolio by scaling our income

[00:20:08] not anything else

[00:20:10] the equity isn't going to matter anymore the income

[00:20:12] is going to be the limiting factor your portfolio can only

[00:20:14] ever get 4.5

[00:20:16] times the size of the income so

[00:20:18] if you're buying a property it would have to

[00:20:20] increase your income like you can go increase

[00:20:22] your income on your own go do a better job at your job

[00:20:24] go get a high paying job whatever

[00:20:26] yeah but if your

[00:20:28] investments can also increase your income

[00:20:30] every time you buy one and you have positive

[00:20:32] cash flow and it's increasing your income

[00:20:34] it's going to get you closer to doing another deal

[00:20:36] because it's bringing that income up and you

[00:20:38] can buy 4.5 times that income so

[00:20:40] every time you bring your income up you actually

[00:20:42] get a 4.5x increase

[00:20:44] on your buying power hypothetically right

[00:20:46] because we know that's now the cap

[00:20:48] and that's the exact kind of stuff as you mentioned

[00:20:50] Dan that's the kind of stuff we teach we teach that

[00:20:52] course yeah we've been saying this for a while

[00:20:54] like we know how to analyze this stuff

[00:20:56] we've always been looking at deals this way

[00:20:58] fortunately the policy environment is moving

[00:21:00] more in favor of us I mean there's a

[00:21:02] lot of courses out there on flipping

[00:21:04] on wholesaling and stuff like that

[00:21:06] we're not those kind of guys you know

[00:21:08] that this is the Canadian real estate investor

[00:21:10] podcast not the Canadian real estate flipper

[00:21:12] podcast not the Canadian real estate wholesaler

[00:21:14] podcast right yeah I mean this is

[00:21:16] investing we invest for a yield it's not

[00:21:18] a speculation show this is investing

[00:21:20] investing and investing

[00:21:22] and what we do if your portfolio

[00:21:24] isn't performing

[00:21:26] its highest and best use is what we'll do is we'll

[00:21:28] audit it for you right I mean

[00:21:30] if your existing stuff

[00:21:32] isn't cash flowing and we need it to

[00:21:34] cash flow in order to help you

[00:21:36] scale which is becoming more and more evident

[00:21:38] then what we do is we go

[00:21:40] property by property look at the highest

[00:21:42] and best use of that property look at if you're

[00:21:44] getting as much money but look at your debt terms

[00:21:46] your debt structure capital stack everything

[00:21:48] so anyways all that is in the

[00:21:50] no it's good like I think

[00:21:52] it's worth discussing because a lot of like

[00:21:54] just so other people like people realize

[00:21:56] there's other people out there in these positions

[00:21:58] myself included a lot of the coaching

[00:22:00] calls in the course have been focused

[00:22:02] on portfolio strategy

[00:22:04] right on optimization on taking

[00:22:06] income and this is before

[00:22:08] this really came out we've really just

[00:22:10] been focused on looking at

[00:22:12] someone's portfolio and saying

[00:22:14] hey here's where we can

[00:22:16] increase income right can we put a basement suite in here

[00:22:18] can we put a garden suite in here it's going to

[00:22:20] be worth the cost because you know we can refi

[00:22:22] it out and it'll increase the income

[00:22:24] which will get you closer this is before this rule even

[00:22:26] came in now this rule came in all of

[00:22:28] these rules that we've really been doing

[00:22:30] and I'm looking at my portfolio the same way

[00:22:32] with the cabin like I mentioned

[00:22:34] we have the there's a basement

[00:22:36] suite in that building that still needs to be

[00:22:38] rented out

[00:22:40] I have a vacant basement suite in a

[00:22:42] building that I'm gonna be renovating to put it in

[00:22:44] increasing the revenue potential

[00:22:46] of existing of your existing

[00:22:48] portfolio now is going to be

[00:22:50] very important

[00:22:52] and so right now we're in it we're really in

[00:22:54] as a phase of investors and I think

[00:22:56] the government's been making this clear with policy

[00:22:58] we just had both the housing

[00:23:00] minister and shadow housing minister

[00:23:02] on to discuss this

[00:23:04] they see the role of investors but the reality

[00:23:06] is the central banks have made it as such that

[00:23:08] you can't cash flow

[00:23:10] a single family

[00:23:12] residential property except in like maybe 10

[00:23:14] cities in Canada really right

[00:23:16] so what does this mean does this mean we shouldn't be buying

[00:23:18] single family residential properties maybe

[00:23:20] maybe those should be reserved for owner occupiers

[00:23:22] but the other

[00:23:24] pieces you can cash flow

[00:23:26] a two unit or three year in it or four unit

[00:23:28] and so policy makers know

[00:23:30] they can rely on investors

[00:23:32] to create housing if

[00:23:34] things stay the way that they are

[00:23:36] and this is a very

[00:23:38] very important thing to acknowledge right now I think

[00:23:40] in today's environment is

[00:23:42] their expectation of us is to be housing creators

[00:23:44] and that's just becoming more apparent by things like this

[00:23:46] yeah now really well said

[00:23:48] now that's very important

[00:23:50] now let's

[00:23:52] move on to something that may

[00:23:54] or may not be

[00:23:56] important

[00:23:58] so 30 year amortization which is

[00:24:00] like this one's funny because it's like

[00:24:02] selective 30 year amortization I actually don't

[00:24:04] think this policy is going to do that much but anyway 30

[00:24:06] year amortization let's talk about it

[00:24:08] I'm not sure the amortization period is the length

[00:24:10] of time required to pay off

[00:24:12] your mortgage balance in full

[00:24:14] through regular payments the

[00:24:16] most common

[00:24:18] mortgage amortization

[00:24:20] in Canada

[00:24:22] 25 years that's the standard

[00:24:24] yeah so

[00:24:26] the

[00:24:28] I guess we're extending or giving the opportunity

[00:24:30] to try and

[00:24:32] push that I think it is crazy that everybody

[00:24:34] keeps like topping up to 25 even if

[00:24:36] like that's just funny from my perspective

[00:24:38] you get an infinite mortgage right every time you renew

[00:24:40] like if 25 is the most common it is kind of

[00:24:42] wow anyway so recently

[00:24:44] finance minister mr. Christia Freeland announced

[00:24:46] the federal government will allow 30 year amortization

[00:24:48] periods on insured mortgages for first time home buyers

[00:24:50] purchasing newly built homes and that

[00:24:52] change is said to take

[00:24:54] affect August 1st here's the catch

[00:24:56] from my perspective actually

[00:24:58] you say the down payment and then

[00:25:00] I'll mention the catch yeah so

[00:25:02] under the current

[00:25:04] rules of a down payment is less than 20%

[00:25:06] of the home price the longest

[00:25:08] allowable amortization

[00:25:10] that's again the length

[00:25:12] of time the borough has to repay the mortgage is

[00:25:14] going back 25 years

[00:25:16] which is the most common

[00:25:18] amount of time we see

[00:25:20] across the board yeah so

[00:25:22] as pointed out on

[00:25:24] Twitter and Instagram

[00:25:26] by friends of the show Riley Boyko

[00:25:28] on instead I think but Peter

[00:25:30] Curious Opolis I hope I said that right that's pretty good

[00:25:32] when Riley

[00:25:34] and I he reposted

[00:25:36] it with someone saying yep underneath

[00:25:38] that was me so Riley's

[00:25:40] got some really great takes Riley and Peter both

[00:25:42] incredible real estate agents really

[00:25:44] guys as well so I know they both listen

[00:25:46] to show so thanks fellas yeah no great

[00:25:48] guys so I guess

[00:25:50] the point here is that

[00:25:52] when you buy a brand new home so this only applies

[00:25:54] to brand new houses and when you buy

[00:25:56] a brand new home you're typically putting in a

[00:25:58] deposit of more than 20%

[00:26:00] or up to 20%

[00:26:02] not 5 or 10 or

[00:26:04] 15 and so

[00:26:06] the likelihood of you being both a

[00:26:08] high loan-to-value

[00:26:10] mortgage borrower

[00:26:12] right like an insured mortgage borrower

[00:26:14] and a new home buyer

[00:26:16] is very small unless

[00:26:18] builders are now going to

[00:26:20] unless there's some sort of policy measure where builders are now going to take smaller deposits

[00:26:24] which I don't see how they're gonna do that

[00:26:26] how would they do that in this

[00:26:28] environment I mean maybe right

[00:26:30] it could be creative stuff

[00:26:32] for some builders and developers to come up with

[00:26:34] it's tough to say because builders typically

[00:26:36] will put something called a west mount guarantee

[00:26:38] like an insurance on

[00:26:40] if you just go on west mount guarantees

[00:26:42] website they say like they allow builders

[00:26:44] to access that equity so they

[00:26:46] insure those deposits and then they allow builders

[00:26:48] to access that equity to

[00:26:50] put it to work in project financing so it becomes

[00:26:52] part of the capital stack anyway

[00:26:54] I think I've sufficiently covered

[00:26:56] why this might not do anything so anyway

[00:26:58] faced with a shortage of housing options

[00:27:00] and increasingly high

[00:27:02] rent and home prices younger Canadians

[00:27:04] understandably feel like the deck is stacked against them

[00:27:06] the finance ministers said in a news release

[00:27:08] by extending amortization monthly

[00:27:10] mortgage payments will be more affordable

[00:27:12] for young Canadians who want that first

[00:27:14] home on their own I think I'd calculated

[00:27:16] that all like a one million dollar mortgage it would be like 10% cheaper

[00:27:18] okay so I mean

[00:27:20] that makes a difference it's funny because

[00:27:22] it makes a difference but

[00:27:24] all it does is it makes it like it makes it

[00:27:26] so that you can stretch your payment which means that you're going to buy

[00:27:28] more house and take on more debt maybe you're not

[00:27:30] going to but like that's that's

[00:27:32] typically the net effect right and so it's

[00:27:34] not necessarily like an affordability

[00:27:36] thing I know a lot of builders

[00:27:38] have really been pushing for this but anyway

[00:27:40] MPC mortgage professionals Canada

[00:27:42] CEO Lauren Vandenberg called it

[00:27:44] a step in the right direction and said

[00:27:46] extending the amortization period

[00:27:48] will help level the playing

[00:27:50] field for first time home buyers

[00:27:52] but we have seen blatant decline

[00:27:54] in the ability for first time home buyers to get into the housing market

[00:27:56] we just posted a chart

[00:27:58] on Instagram about it although

[00:28:00] there's a little bit of a chart crime because it looks

[00:28:02] like like first time home buyers are basically

[00:28:04] like buying negative houses but if you actually

[00:28:06] look at this on the bank of Canada website

[00:28:08] where in which they also committed to chart crime

[00:28:10] by the way because they use different axes

[00:28:12] to make it look like the first time home buyers are the lowest

[00:28:14] group of buyers in the market

[00:28:16] first time home buyers are like 47% of the market

[00:28:18] so it's not like they're

[00:28:20] and I just got an argument with John Pesales on Twitter about this

[00:28:22] like I love to debate him because he's very smart

[00:28:24] and sometimes I agree

[00:28:26] with him but I just do it for fun

[00:28:28] so he was like why should we be

[00:28:30] why won't anybody

[00:28:32] or why is everyone against putting

[00:28:34] regulations on investors and not

[00:28:36] against putting regulations on first time home buyers

[00:28:38] right and to me it's like

[00:28:40] this is my actually

[00:28:42] you read your part of the script here

[00:28:44] and have this article and then I'm gonna

[00:28:46] I'm gonna pull up what I wrote in my response to him

[00:28:48] because I feel like it was pretty good. I was gonna say why don't I just jump to the end here

[00:28:50] you pull up your response and

[00:28:52] we'll finish off with that because I don't have much to say

[00:28:54] I mean I was gonna go through insured and uninsured

[00:28:56] stuff but you know

[00:28:58] I agree that I don't think it's gonna change

[00:29:00] the game what it'll do is a longer

[00:29:02] amortization as you said will make homes

[00:29:04] a little bit in theory

[00:29:06] more affordable by reducing that monthly payment

[00:29:08] but likely not much and I mean

[00:29:10] I think it's again as you said

[00:29:12] but it's not making the house more affordable this is the thing that people are like

[00:29:14] making the payment

[00:29:16] exactly that doesn't make housing more affordable

[00:29:18] no it actually might make housing go

[00:29:20] up in price it is inflationary

[00:29:22] typically when you extend the debt and make

[00:29:24] remove a barrier to entry it is just becoming

[00:29:26] more inflationary you pay a little bit less for

[00:29:28] a bigger thing for longer and

[00:29:30] not only just that but

[00:29:32] it's very very specific as you said right first

[00:29:34] time home buyers that are only buying

[00:29:36] new construction now in

[00:29:38] DC and Ontario

[00:29:40] that likely isn't a lot of people

[00:29:42] now it might have a

[00:29:44] better and better effect

[00:29:46] on first-time home buyers in other provinces

[00:29:48] so you know we'll see

[00:29:50] I think this is

[00:29:52] I think this has to be implemented to see what kind of changes

[00:29:54] it'll actually have

[00:29:56] in the market but stay tuned

[00:29:58] I'm sure we'll be covering it as it evolves

[00:30:00] Dan hit me with your piece

[00:30:02] and then let's

[00:30:04] move on to the final piece

[00:30:06] so John he posted

[00:30:08] he reposted the chart

[00:30:10] that we posted and it said

[00:30:12] interesting thing about this when virtually

[00:30:14] every housing expert in Canada are used against measures

[00:30:16] to curb investors buying

[00:30:18] homes they're telling you that

[00:30:20] they support this trend for your homes for

[00:30:22] first-time buyers why do many

[00:30:24] housing experts support this or why do so many

[00:30:26] housing experts support this and I answered

[00:30:28] well so first of all I

[00:30:30] my first answer was personally I think we need to differentiate between speculation and investment for housing creation

[00:30:34] I think there's nothing wrong with

[00:30:36] the latter which is investment for housing creation

[00:30:38] speculators should

[00:30:40] have measures against them but as it appears today the central bank has done a lot of that work

[00:30:44] from my perspective right Bank of Canada pretty much

[00:30:46] stifled any speculation left in

[00:30:48] the market and I said I also think the

[00:30:50] central bank has made this is what I was just mentioning to you

[00:30:52] I also think the central bank has made it such

[00:30:54] that you can't cash flow a single

[00:30:56] family now which means

[00:30:58] investors have to multiplex which is a good thing

[00:31:00] so in that regard I think

[00:31:02] monetary policy is alone

[00:31:04] should be the only policy lever here

[00:31:06] and he just responded by saying the fact

[00:31:08] that the vast majority of the investors

[00:31:10] the fact is the vast majority of these investors are

[00:31:12] not creating housing they're just sitting on land and I said

[00:31:14] so they're speculators then because that's what

[00:31:16] he's describing from my perspective so

[00:31:18] but anyway

[00:31:20] the next piece and this is the actual argument

[00:31:22] specifically against first-time home buyers is

[00:31:24] my thought on this

[00:31:26] first-time home buyers are the irrational

[00:31:28] consumer right so it's to me

[00:31:30] it this is like a protect the innocent

[00:31:32] thing honestly

[00:31:34] they have first-time home buyers have literally zero experience

[00:31:36] their first time like that's I'm not

[00:31:38] making fun of them it literally is their first

[00:31:40] time they have zero experience doing this they've never

[00:31:42] bought and sold the home right they don't they've never been

[00:31:44] through a market cycle in most cases

[00:31:46] and they're more likely to hire a professional

[00:31:48] with the same experience

[00:31:50] none or not enough

[00:31:52] they are also the

[00:31:54] highest leverage consumer right

[00:31:56] meaning they're them at the most

[00:31:58] at risk to a downturn

[00:32:00] to me this is a deadly combination right no

[00:32:02] experience highest risk so

[00:32:04] giving them guardrails probably has a

[00:32:06] better social benefit and makes more sense

[00:32:08] than giving guardrails to investors

[00:32:10] right shouldn't we protect the innocent consumer

[00:32:12] here it's like why do we put

[00:32:14] like you know little bumpers on

[00:32:16] tables for babies right like

[00:32:18] because adults aren't going to go around bopping their heads

[00:32:20] off tables right the babies are the

[00:32:22] innocent kids who don't know better

[00:32:24] so invest and then my other thought is if

[00:32:26] investors are so bad right if they are to be

[00:32:28] demonized by everyone in the market

[00:32:30] shouldn't we be happy to see them

[00:32:32] being the unregulated ones taking all of the risk

[00:32:34] and getting smoked which they are a lot

[00:32:36] of the speculators are doing that right now

[00:32:38] right and first time home buyers aren't because

[00:32:40] they're insured and they were capped so hard

[00:32:42] like there was

[00:32:44] a lot of risk regulated out of first time

[00:32:46] home buyers that wasn't regulated out

[00:32:48] of investors and investors are now the ones

[00:32:50] bag holding suffering right cash flow

[00:32:52] negative etc anyway

[00:32:54] that's my whole meditation

[00:32:56] on the awesome it's a really great take

[00:32:58] I tend to get I was just sitting here thinking

[00:33:00] a bunch of different funny analogies

[00:33:02] for

[00:33:04] protecting innocent first time home buyers

[00:33:06] versus the well it's just protect the innocent

[00:33:08] that's a thing like that's a hundred percent

[00:33:10] that sounds like an idiot

[00:33:12] that's a dance horse original I don't think so

[00:33:14] let's let's keep moving on Dan we got

[00:33:16] one more thing to talk about

[00:33:18] that will directly affect

[00:33:20] both end users

[00:33:22] first time home buyers and investors

[00:33:24] alike this one if implemented

[00:33:26] could be pretty serious well

[00:33:28] it would be pretty serious if you lie about your income

[00:33:30] on a mortgage application so

[00:33:32] no one's ever done that in Canada yeah

[00:33:34] I think it's a national

[00:33:36] sport here that's funny

[00:33:38] because everybody's like I posted

[00:33:40] that one and when I was posting the

[00:33:42] stuff from the housing plan by the way we are

[00:33:44] doing it we're going to do a webinar going through the entire housing plan

[00:33:46] it's on what is it may

[00:33:48] 8th May 8th there's a link at

[00:33:50] Lincoln show notes yeah not by Lincoln show

[00:33:52] notes for it and we're going to go

[00:33:54] through kind of all the opportunities in this but this is the one that stood out to everyone as like this is going to have a

[00:33:56] biggest impact on the market

[00:33:58] if mortgage fraud

[00:34:00] is as rampant as what everyone's saying

[00:34:02] maybe people wouldn't even be able to get

[00:34:04] to the 4.5 income hurdle that we described earlier

[00:34:06] in the show because

[00:34:08] the federal government confirmed plans to consult

[00:34:10] with the mortgage industry on

[00:34:12] developing income verification tools

[00:34:14] through the Canada Revenue Agency if you listen

[00:34:16] to our most recent episode

[00:34:18] interviewing Sean Frazier about this

[00:34:20] he mentioned how

[00:34:22] they don't really have a timeline on it but they are in a hurry to get it done

[00:34:24] because they deem that it's pretty necessary

[00:34:26] I think in political speak that means it's never going to happen

[00:34:28] I don't know

[00:34:30] well I mean like a lot of people were like oh yeah

[00:34:32] the plans to do the consult

[00:34:34] like it's kind of

[00:34:36] they were like oh it seemed like wishy washy

[00:34:38] it's like a plan to do a consultation

[00:34:40] plan to a plan to do that

[00:34:42] but to be fair this is like

[00:34:44] banks and people's

[00:34:46] financial information and their tax info

[00:34:48] like this is like the one thing where like it needs to be done really well

[00:34:50] right

[00:34:52] like hopefully it doesn't end up like a live

[00:34:54] like the CRA recently but

[00:34:56] they're not the most I mean listen

[00:34:58] hey nothing but respect for the people that work there

[00:35:00] but uh man

[00:35:02] trying to get anything done with the CRA

[00:35:04] phone calls, getting

[00:35:06] your code for your

[00:35:08] business number it's just you know

[00:35:10] it's a pain I don't know anyone that's had

[00:35:12] great experience well I think it's just like a lot of analog

[00:35:14] systems yeah exactly that's what I mean

[00:35:16] they don't think they've been able to spend a lot

[00:35:18] in the housing plan one of those things was to start to digitize

[00:35:20] all this stuff right everything from

[00:35:22] CMHC data stats can data to

[00:35:24] to more you know digitize and it's kind of one of those

[00:35:26] things where it ends up being like

[00:35:28] is it better late than ever or is it too

[00:35:30] little too late right like this is where I think

[00:35:32] a lot of people are like which cliche

[00:35:34] voters will decide I guess I feel like I just named

[00:35:36] two country songs right I could I think

[00:35:38] I just wrote a verse for a country song

[00:35:40] come on now yeah um

[00:35:42] now so this

[00:35:44] tool is something that a lot of industry

[00:35:46] legends have been talking about for a long time

[00:35:48] we've brought it up on the show many times

[00:35:50] and it comes up when we talk about all

[00:35:52] of the fraud and money laundering in the mortgage

[00:35:54] and real estate space which actually is another thing that

[00:35:56] they brought up in the housing plan that they're going to try and make

[00:35:58] to try and get rid of but it's

[00:36:00] obviously finally becoming a bit more mainstream

[00:36:02] yeah so this is from the government's

[00:36:04] new housing strategy and I quote

[00:36:06] independently verifying

[00:36:08] borrower income helps financial institutions

[00:36:10] detect and

[00:36:12] deter the types of fraud

[00:36:14] or misrepresentation

[00:36:16] that can increase the cost

[00:36:18] of mortgages for all

[00:36:20] borrowers the plan reads

[00:36:22] budget 2024 will propose

[00:36:24] the government's intention to consult

[00:36:26] with the mortgage industry

[00:36:28] on making a tool available

[00:36:30] through the CRA to verify

[00:36:32] income

[00:36:34] verify borrower income for mortgages

[00:36:36] the government is also promising

[00:36:38] additional funding for

[00:36:40] the CRA to crack down on

[00:36:42] real estate fraud

[00:36:44] yeah so I would say

[00:36:46] this is

[00:36:48] this is like going to have a big impact

[00:36:50] from my perspective if mortgage fraud

[00:36:52] is as big as what a lot of people

[00:36:54] say and what was the

[00:36:56] that thing that came out the CBC expose

[00:36:58] where they were doing like the hidden camera stuff with

[00:37:00] all the mortgage fraud right and

[00:37:02] there's a couple of other ones that came out that HSBC

[00:37:04] thing that we did an episode on crazy

[00:37:06] I would say that this is probably a lot more prominent

[00:37:08] than a lot of people want

[00:37:10] to think as best kept secret to be

[00:37:12] honest like it's funny because two years ago like I was saying

[00:37:14] well like we've been saying this on twitter space is

[00:37:16] like forever and I know Ron

[00:37:18] but like it's credited with this a lot but like Ron didn't

[00:37:20] act and I'm not chirping because like you know

[00:37:22] we like Ron friend of the show we've done

[00:37:24] some work with him panels etc

[00:37:26] I had to convince him that

[00:37:28] fraud was actually like very rampant right

[00:37:30] like cuz you know he's an older guy

[00:37:32] he's been in the industry for a long time

[00:37:34] I would imagine if you're

[00:37:36] like you know all most of your clients are probably boomers who have

[00:37:38] enough money who aren't committing fraud like there's a lot of people out

[00:37:40] there just committing fraud for shelter or like

[00:37:42] investors saying they're going to live in a house

[00:37:44] and that's a big one and

[00:37:46] yeah like in getting 95 loaned of value mortgages

[00:37:48] and not living in them

[00:37:50] like that's probably the most common type of mortgage

[00:37:52] fraud really this stuff is exceptionally

[00:37:54] common I think and I think it's a symptom

[00:37:56] not a cause of the housing crisis I don't actually

[00:37:58] think it's gonna but I think now

[00:38:00] it probably will it will definitely have an impact

[00:38:02] if they start capping this like I think that there's a lot of

[00:38:04] inflated demand where people are buying

[00:38:06] more than they can qualify for because

[00:38:08] they're faking stuff the question is whether or not

[00:38:10] they get this done before

[00:38:12] the election and when I was

[00:38:14] when I was doing the interview like I think

[00:38:16] with Scott I was saying

[00:38:18] aren't they more likely to do

[00:38:20] like you know it's like oh

[00:38:22] people don't trust them to execute all of the things in the plan

[00:38:24] okay true I would agree with that

[00:38:26] the polls make that pretty obvious like that's more

[00:38:28] just facts not really like my opinion

[00:38:30] but doesn't that mean that like

[00:38:32] it's do or die for them and they're more likely

[00:38:34] to do like you think more

[00:38:36] more likely than ever to actually try

[00:38:38] and execute on a lot of stuff that's my thought

[00:38:40] anyway the response from the mortgage

[00:38:42] industry seems to be positive

[00:38:44] in an update to its members

[00:38:46] NPC said that it's proud of their efforts

[00:38:48] around the issues of

[00:38:50] a digital income verification

[00:38:52] and it's they're happy that it's

[00:38:54] yielded this kind of attention from the highest levels

[00:38:56] of government and they're confident that

[00:38:58] a collaboration between the CRA and the housing

[00:39:00] and infrastructure sector stakeholders will ultimately

[00:39:02] benefit home buyers

[00:39:04] yeah and I mean again

[00:39:06] if you've listened to show you know

[00:39:08] we've spoken about this multiple times mortgage fraud

[00:39:10] in Canada has been a

[00:39:12] growing problem and been getting worse

[00:39:14] in recent years with an ex with

[00:39:16] the Equifax reporting

[00:39:18] fraud cases are up

[00:39:20] 52%

[00:39:22] since 2013

[00:39:24] now the problem has also become

[00:39:26] very costly for lenders

[00:39:28] with research finding that

[00:39:30] for every one dollar

[00:39:32] cost to fraud

[00:39:34] cost Canadian financial service

[00:39:36] firms over $3.78

[00:39:38] cents to recover

[00:39:40] that's horrible that's crazy

[00:39:42] that's a negative

[00:39:44] and this is something that

[00:39:46] we

[00:39:48] yes we you listening everybody you know

[00:39:50] should be angry about because

[00:39:52] that money essentially

[00:39:54] is being taken out of the economy to just chase

[00:39:56] fraudulent activity which is already

[00:39:58] taking money out of the

[00:40:00] economy and just kind of messing the whole system up

[00:40:02] so Dan couple of notes from

[00:40:04] some from some friends of the show here

[00:40:06] and then let's get out of here yeah so another

[00:40:08] friend of the show Ben Rabadou an analyst

[00:40:10] with Edge Realty Analytics which by the way

[00:40:12] if you don't follow

[00:40:14] Edge Realty Analytics

[00:40:16] or I guess if you're a real estate professional like Realty

[00:40:18] Morty's broker I think it's like 50 bucks 60 bucks

[00:40:20] a month 60 bucks a month

[00:40:22] and it's like you think I'm smart on

[00:40:24] like the economy and stuff it's just because

[00:40:26] I read Ben's report honestly

[00:40:28] like honestly take it

[00:40:30] people are like oh how do you know all this I'm like

[00:40:32] I literally just like read this

[00:40:34] and then like I just think about it for

[00:40:36] like an hour and then now I'm smart for the month

[00:40:38] it comes out monthly and he does a monthly

[00:40:40] call as well I think I'm trying to get him

[00:40:42] to get an affiliate link for us so

[00:40:44] we'll do that because I not not because

[00:40:46] I care but like because I want him to be

[00:40:48] like I want because I've been saying to

[00:40:50] Ben like you don't sleep on social media don't

[00:40:52] sleep on podcasts and

[00:40:54] I want to prove to him that we can get some

[00:40:56] traffic let's prove it hell yeah yeah so

[00:40:58] and another friend of the show who I

[00:41:00] was mentioning this earlier Ron Butler

[00:41:02] called the announcement great news

[00:41:04] there are two very public figures in the industry

[00:41:06] and thought leaders and

[00:41:08] they and to have their buy-in is a big deal

[00:41:10] itself I think it was uh Ron Butler

[00:41:12] was it Ron and Ben or I think it was Ron and

[00:41:14] Steven Punois you know who else was testifying

[00:41:16] Ron had to testify at parliament

[00:41:18] about this matter yeah yeah that was a

[00:41:20] couple months ago he was on TV

[00:41:22] did some he did some content about it

[00:41:24] anyways that is it in case we've

[00:41:26] looked at Aussie's new lending

[00:41:28] rules 30 year amortizations

[00:41:30] and lenders working

[00:41:32] with the CRA man there is just so

[00:41:34] much happening

[00:41:36] in the real

[00:41:38] estate and mortgage

[00:41:40] space and then the economy in general right now

[00:41:42] for sure it's a rapidly

[00:41:44] changing environment there's a lot of big changes

[00:41:46] coming in the pipeline

[00:41:48] non-stop news right now lots of talk

[00:41:50] and lots of good ideas

[00:41:52] hopefully we'll see some action as a result

[00:41:54] of it so for a more in-depth look at

[00:41:56] the new housing plan make sure to sign up

[00:41:58] for our free webinar where we're actually

[00:42:00] decode the whole thing and identify some

[00:42:02] good opportunities within it and outline

[00:42:04] the opportunity for investors

[00:42:06] check the first link

[00:42:08] in the show notes should be real estate

[00:42:10] slash link in the show notes yeah register

[00:42:12] for that look forward to seeing you on there and

[00:42:14] when you register you'll have to go through

[00:42:16] our free community to join it so

[00:42:18] we'll see you in there as well 100%

[00:42:20] love it thanks so much for listening everybody

[00:42:22] we'll see you on the next one

[00:42:50] real estate