As we have seen repeatedly, when governments are backstopping financial intermediaries lenders naturally become less diligent and more focused on profits than on risks, on quantity rather than quality of loans. This has been the Canadian experience in spades over the past decade…and the risk to taxpayers is still building, with a tab yet to be determined. P.s The taxpayer-backed risks are larger than ever in the US mortgage market as well. See: Fannie and Freddie are Back, Bigger and Badder than ever
Bruce Joseph, Principal Broker, Anthem Mortgage Group, and Ben Rabidoux, President, North Cove Advisors, join BNN to discuss the prevalence of fraud and role of regulators in Canada’s mortgage industry. Here is a direct video link.
Footnote on Economist Sherry Cooper speaking at the outset of clip: after a long career as Chief Economist/investment sales cheerleader for BMO Capital Markets, Ms. Cooper recently took a position as the Chief Economist/mortgage sales cheerleader at Dominion Lending Centres (who’s website says they collect brokerage commissions on more than 50,000 mortgages sent to Canadian lenders each year). Unsurprisingly, Ms. Cooper’s assessments are all very positive on the stability and integrity of the Canadian mortgage market!
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