Big Six banks urge Ottawa to tighten mortgage rules

[Oregone]

Canada's top bankers are pushing the government to clamp down on the mortgage market to cool off the rise in home prices.

The heads of the country's six largest banks have privately told policy makers that they fear the wide-ranging economic fallout of a U.S. style binge-and-collapse in housing. To head off any chance of that happening, they are willing to accept tighter rules on mortgages that would slow the real estate market, even though it would mean forgoing some short-term profits from giving out ever bigger mortgages as home prices jump.

The chief executives of the Big Six made their point last November, when they met with Bank of Canada Governor Mark Carney. The country's top commercial bankers, who between them control more than three-quarters of the country's $940-billion mortgage market, said then that they wanted the government to look at far-reaching options, such as raising the minimum down payment to as much as 10 per cent and shortening the maximum amortization period to 30 years.

http://www.theglobeandmail.com/report-on-business/big-six-banks-urge-ottawa-to-tighten-mortgage-rules/article1458585/

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Too late. As soon as everyone's 2% balloon on their $500K house resets in 3-5 years to a higher prime rate, you are going to see unprecedented economic fallout. Canada's position as a bastion of saftey in this economic storm is going to fade fast. Just my opinion

[AllentownJake]

1. All the bastions of saftey are temporary illusions

You have large pools of capital roaming the world for a safe investment and a decent return and in theory, that is supposed to be AWESOME.

What you end up getting is large pools of capital roaming the world, creating bubbles, destroying the area by pushing growth at ridiculous rates, and running out when things collapse with a whole bunch of people who thought they were rich, suddenly poorer before the large pools of capital ran into their area.

Everyone is running into Treasury bonds/bills right now for their safety and in the same breath speculating on a US possible default.

Look at Gold, a whole bunch of people are about to get cleaned out there, will sell at the bottom, and than will regret it when it recovers as the in safety thing in 3 years.