Mortgage Market Commentary January 2, 2014

Happy New Year!

• TSX +40.16 to 13,621.55 (CP) as investors closed the books on a year that saw a solid advance, up 9.55 per cent for the year, with the advance racked up over the last five months. The market started to transition from one that was driven by central bank stimulus to an environment where investors started to focus more on economic fundamentals.
• Dow +72.37 to 16,576.66 also ended the year at a new high, as traders digested a mixed bag of data on home prices, consumer confidence and manufacturing. For the year, U.S. home prices reflected big gains in earlier months. They rose 13.6 per cent over the past 12 months, the fastest pace since February 2006 — before the U.S. real estate crash.
• Dollar +.02 to 94.022 US the end of a year in which the loonie fell below parity with the U.S. dollar, with little expectation it will regain that level any time soon. The currency started the year at 100.51 cents U.S. Part of the reason for the slide was increasing strength in the U.S. dollar on rising speculation starting in late May that the U.S. Federal Reserve would start to taper its US$85 billion of monthly bond purchases, a key stimulus measure that has kept long term rates low and supported a strong equity market rally. Most importantly, the view on the Bank of Canada changed, as we came into this year expecting the BoC to hike rates at some point
• Oil -$.59 to $98.70 US
• Gold +$5.20 to $1,209.00 US The gold sector fell about 48 per cent for the year while the precious metal has fallen about 28 per cent, the first annual loss since 2000.

Canadian 5 year bond yields markets +.03 to 1.95. The yield was 1.80 on Dec 18 and we have seen lenders start to increase fixed rates. The spread (obtained by subtracting the bond yield above from the industry average 5 yr rate published mortgage rate of 3.59) is well below the profit range at 1.64. If the increase in bond yield continues upward, the spread shrinks, which could prompt interest rates to rise. The range for investor desired profitability is currently a bit lower in the region of 1.80 and 2.00.



Five Canadian mortgage market predictions for 2014
Robert McLister Special to The Globe and Mail Dec. 30 2013


1. New mortgage rules
Expect more rule tightening in 2014 designed to reduce mortgage risk for lenders, mortgage default insurers and the government. By definition, those rules will make it slightly harder to get approved for some mortgages and further slow the housing market.
2. Credit unions will steal market share
Since they’re provincially regulated, credit unions have more flexible lending guidelines than federally regulated banks. They’ll use that to their advantage in addition to marketing more heavily, both online and to mortgage brokers. We’ll also see some big mergers this year as credit unions seek out economies of scale.
3. Stronger online players
A new breed of online mortgage broker is sacrificing commissions for volume, and selling cut-rate mortgages. This trend will heat up competition industrywide, delivering greater mortgage discounts to all consumers.
4. Hybrid mortgages will grow more popular
Economists and government officials have been warning us of higher rates for four years. So far they’ve been wrong, and now many consumers aren’t sure what to believe. More Canadians will hedge their rate bets with hybrid mortgages (part fixed and part variable).
5. Consumer IQs will increase

For those in the mortgage industry who prefer an uninformed consumer, your days are numbered. Canadians will spend more time researching rate comparison websites, online mortgage forums, news portals, blogs, calculators and other online mortgage tools. They’ll become increasingly savvy about fine print like penalty calculations, rate blend policies and refinance restrictions.

Mortgage Market Commentary for December 24, 2013

• TSX +7.40 to 13,399.60 (CP) amid data showing the US economy performed much better than expected during the third quarter
• Dow +42.06 to 16,221.14
• Dollar +.15 to 93.91 US
• Oil +.28 to $99.32 US
• Gold +$10.10 to $1,205.10 US

Canadian 5 year bond yields markets -.02 to 1.84. The spread (obtained by subtracting the bond yield above from the industry average 5 yr rate published mortgage rate of 3.59) is well below the profit range at 1.75. If the increase in bond yield continues upward, the spread shrinks, which could prompt interest rates to rise. The range for investor desired profitability is currently a bit lower in the region of 1.80 and 2.00.


Should you help buy your kids a house?

Ted Rechtshaffen | December 14, 2013

One of the interesting factors supporting real estate growth is the role of financial support of parents and grandparents on some home purchases. The rationale for this growing practice is simple. Parents want their children to be able to get into the real estate market – and live remotely close to the type of neighbourhood they grew up in.

With the average price of a detached house at $635,000 in greater Toronto, and $925,000 in greater Vancouver, it is easy to see a challenge for both first and second-time homebuyers.

If you want to help your child with a home purchase, there are a couple of factors to look at. The first is the parenting philosophy of an individual. The second would be the financial strength of the parent. The third might be the financial strength of the child. The fourth might be the strength of a child’s marriage.

Philosophy of the parent

In the past, it was much more likely that parents would say ‘I never had any help buying my first house, so my kid can do it themselves’. Today, with the daunting house prices facing those first and second time home buyers, it leads many parents to a different opinion.

Many parents have personally seen the financial benefits of home ownership. They also see the financial struggle and limited housing options facing many of their children, and have decided to do something to help.

In some cases, helping means a loan with normal interest rates. In some cases it is a loan with lower or no interest. In some cases it is effectively a gift.

Today, we are seeing a general philosophy of parents wanting to help their children with real estate – assuming they have the financial strength.

Do you look at a child with a good job and a decent savings discipline, and help them get a leg up? Or do you let that child fend for themselves because they will likely be OK, but only help out the child that will never be able to afford a home on their own? Do you make sure that all children receive equal benefits? Our general recommendation is to assume you are helping all children equally, regardless of their personal financial strength. After all, as the Smother’s Brothers used to say “Mom always liked you best.” Kids never outgrow that issue and concern. This means that if you think you can help your children with $300,000, and you have 3 children, you better not overextend to the oldest child and then run out for child two and three.

It is very difficult for a 60-year-old couple to know how generous they can afford to be, without having some form of detailed financial projection that will show the impact of a financial gift or loan. You want to know what would happen if you gift $200,000 to a child? Will that put you in financial trouble in 20 years? What if you make a loan to a child, and they never pay you back? Can you afford that? Unfortunately, family debts are among the most likely to become impaired debts. Regardless of the financial planning and projections, a loan with a modest interest rate is the least likely to be of risk to the parent. Remember, once the gift is made, it is very difficult to unmake it. The financial and emotional stress of a poorly thought out gift can be very difficult for the whole family for years to come.

Financial strength of the child

There are some children (I know it is rare), who don’t want their parent’s help. They want to be able to do it on their own. There are also children who have good jobs and are a good loan risk. This means that if the parents want to lend them money at a standard or low interest rate, it likely doesn’t represent much of a risk for the parent’s financial picture.

If the child’s situation is not in as strong, one of the questions is whether, even with help, the child should be buying real estate? If they get a loan from their parents, will they be able to pay it back? Will it cause family stress? If they receive a financial gift, will they still struggle with paying the mortgage at the bank? Sometimes the best help a parent can give is to advise the child to keep renting (or living at home) rather than buying real estate that they can’t afford.

The strength of a child’s marriage

This is important, as a financial gift will become your child and their spouse’s family property as soon as it is received. We have seen cases, where a parent gifted $400,000 to help buy a house, and six months later the child’s marriage broke up. In this case, the parents just handed their soon to be ex-daughter or son-in-law a $200,000 gift.

The best way to avoid this is to not make a gift at all. Whether it is a standard loan with standard interest rates, or a 0% interest rate, or even a demand loan that isn’t meant to be paid back, the key is to make the financial ‘gift’ in the form of a loan.

If the goal is to make it a gift, we generally tell clients to write up a demand loan note. This says that you are ‘loaning’ $200,000 with no repayment plan. However, you have the right to call the loan at any time. The reason this is important is that technically the child and their spouse owe this money. It is not part of their family property. In the event of a marriage breakup, the parent would demand the loan, and this loan amount would be reduced from the family property.

One way to look at this is that in a best case financial scenario, you will likely be leaving a sizable estate to your children when you pass away. It is usually preferable to not wait until you are gone (and your children might be in their 50s or 60s), if some gifting could have happened earlier. Why not help at a time when your children can use it, and you can see the benefits. Unless your child is single, I would recommend structuring any financial support as a loan.

In a scenario where you may be financially in a position to help, but it isn’t so clear, it is better to be safe and only look at a loan scenario with a clear expectation of repayment. If repayment isn’t so likely, then it is better not to help.

One last thing to keep in mind is that while owning personal real estate is a positive from a tax perspective, and is generally positive from a ‘pride of ownership’ perspective, it may not be the obvious choice in 2013 that it was 40 years ago. In many cases, renting provides greater peace of mind and a higher standard of living, given how large many mortgages are today.

In the end, part of being a parent is knowing when to help and when to stand back.

Mortgage Market Commentary for October 8, 2013

• TSX +29.60 to 12,788.25 (CP) as investors nervous about the debt impasse in Washington pushed bullion prices higher.
• DOW -136.34 to 14,936.24 tumbling below the 15,000 pt mark as the U.S. government entered a second week of a partial shutdown as Democrats continued to resist calls from Republicans to link funding to changes in the country's three-year-old health-care law and to spending cuts. It's becoming clear that the Republicans intend to extend that linkage to raising the government's debt limit, which will be reached on Oct. 17.
• Dollar -.20c to 96.96c US amid a housing report that missed expectations. Statistics Canada said that Canadian municipalities issued building permits worth $6.3 billion in August, down 21.2 per cent from July. Economists had expected a drop of only 15 per cent.
• Oil -$.81 to $103.03 US
• Gold +$15.20 to $1,325.10US as investors looking for safety pushed December bullion ahead. Gold will rally in periods when uncertainty is high and thus investors seek the safety of a hard asset. Conversely, gold will rally when the economy is doing much better and inflation expectations are ticking back up. “It’s really a sentiment asset, a reflection of fear or euphoria in the market over the short term”, observed Craig Fehr, a Canadian markets specialist

Canadian 5 year bond yields markets -.02 to 1.87. The spread (obtained by subtracting the bond yield above from the industry average 5 yr rate published mortgage rate of 3.79) is centered within the profit range at 1.92. If the increase in bond yield continues upward, the spread shrinks, which could prompt interest rates to rise. The range for investor desired profitability is currently a bit lower than in the past, more in the region of 1.80 and 2.00.




Wired to spend: How alluring tech add-ons are hiking our expenses
Christine Dobby | 05/10/13 | Financial Post 07/10/13

Paying for your iPhone is just the beginning
This summer’s war over wireless competition touched on that most familiar of Canadian complaints — high cellphone prices — but on top of the technology expenses we have grown accustomed to paying, a new generation of alluring add-ons is quietly expanding our communications and entertainment budgets.

Cellphones were once an extravagance of only the very busy and important — today the average household in Canada has two. Add in a slew of extras and financial experts say the cost of communications and entertainment goes well beyond the basic monthly rates many of us pay.

“People see their cable, Internet and cellphone bills as a sunk cost. They’re spending $180 per month and it’s like [paying for] heat — they just see it as a lost cause,” says Fabio Campanella, a partner at Toronto accounting firm Campanella McDonald LLP. “Then they start adding additional costs on, like an on-demand movie for $7, or Netflix for $8 a month that they use once a month.”

While 86% of households continue to subscribe to traditional television services, a generation raised on the Internet is increasingly going online to watch.

In 2012, the average Canadian household spent $185 a month on television, Internet, landline and cellphone expenses, according to the country’s telecom regulator.

That breaks down to $67 a month on cellphones, $31 on Internet, $52 on television and $35 on landlines, the Canadian Radio-television and Telecommunications Commission said in its annual report on the sector published in late September.

But the report also pointed to new forms of entertainment capturing communications dollars.
Annual growth in the number of subscribers to traditional cable and satellite services has slowed to just 1% although about 12 million households were still signed last year, according to the CRTC.

Yet, on top of that, one-third of Canadians watched programming online last year and the average user spent three hours a week watching.

Netflix Inc., which offers on-demand streaming movies and television for a monthly fee, does not disclose its Canadian subscriber numbers, but the CRTC estimates that by the fall of 2012, about 17% or 5.9 million Canadians paid for the service.

The average Canadian household spent $185 a month on television, Internet, landline and cellphone expenses.

That’s a significant jump from the approximately 2.1 million subscribers the commission estimated Netflix had in the spring of 2011.

“Twenty years ago you had a landline and a TV, period,” Mr. Campanella says. “Now a family of four have a landline, they have two to four cellphones, they have cable, they have Internet, they have Netflix and they’re seeing everything as an individualcomponent or expense. They’re not looking at the overall communications expense that the family is dishing out every single month.”

There are many ways to access online content for free but numerous subscription services are also popular.
In addition to Netflix, people might spend on streaming music services that charge fees for premium access, Skype or other Internet calling applications that charge for certain features, movie rentals and purchases on iTunes, subscriptions to online publications or sports platforms, and even a service that gives users a U.S. IP address to facilitate access to content blocked outside the United States.

Rogers Communications Inc. just announced it will soon launch the digital magazine subscription service Next Issue for Canadian users, offering monthly access to more than 100 of the most popular U.S. magazines as well as its own publications. The news was exciting for Canadian magazine fans but it will still add another $10 or $15 (depending on the package) to monthly spending. I’m going to tell you that a lot of people don’t look at their bills

Although television subscribers are relatively stable in Canada, the trend toward spending more on the Web is undeniable and telecommunications providers are taking steps to protect their existing businesses or capitalize on the online opportunity.

One strategy is to sell less popular services, such as landline telephones, along with desirable ones and bundles have never been more popular: There were 10 million subscriptions with bundled services last year, the CRTC says, up from 5.8 million in 2008, a compound annual growth rate of 16.9%.

The surge in use of online services to consume programming has also dramatically increased the amount of Internet bandwidth people use.

The average residential Internet subscriber downloaded 28.4 GB and uploaded 5.4 GB per month in 2012, a considerable increase from just one year earlier, up 56% and 42%, respectively, according to the CRTC.
While users, particularly younger ones, may be diverting their money from traditional cable packages to online services, telecommunications companies can recoup some of that with more expensive high-capacity Internet plans. Plus, Canadians are consuming more media on mobile devices than in the past, offering an opportunity for the wireless arms of companies such as BCE Inc., Telus Corp. and Rogers to realize new revenues on mobile data.

Mr. Campanella says the habit of charging all of this to a credit card helps spur indiscriminate spending, in part because many people place too much importance on collecting reward points.
“People buy things they don’t need and let it route to their credit card and at the end of the year, they’re happy because they get a cheap flight to New York.”

Jeanette Brox, a certified financial planner and senior financial consultant with Investors Group in Toronto, says many of her clients aren’t carefully tracking what they’re paying for.

“I’m going to tell you that a lot of people don’t look at their bills,” she says. “It’s either coming out of their bank account or it’s charged to their credit card bill.”

The average household that spent $185 per month in 2012 had an income of about $77,000, according to the CRTC, making the $2,220 in annual spending on TV, Internet and phones about 2.8% of annual income.
Households in the lowest income bracket, earning less than $28,000, spent $119 per month or $1,428 per year — 8.4% of their yearly earnings.

The highest earners, households with more than $112,000 in annual income, spent 1.7% of that on those expenses: $258 a month or $3,096 annually, according to the CRTC.

Not included in those figures are the additional expenditures Mr. Campanella says didn’t exist 10 or 20 years ago.


“It’s a hidden cost that people aren’t paying attention to that maybe if people made some cuts they could save $50 a month, save $500 or $600 a year and it adds up,” he says, noting that if a 35 year-old saved $500 a year, invested at 5% for 30 years, he or she would have an extra $33,000 at retirement.

Mortgage Market Commentary for October 4, 2013

• TSX -103.88 to 12,735.12 (CP) has lost ground in three of the last four sessions reflecting increased volatility arising from worries that the United States could be heading for a big economic shock later this month.
• DOW -136.66 to 14,996.48 falling below the 15,000 pt line as the U.S. Treasury Department warned Thursday that the economy could plunge into a downturn worse than the Great Recession five years ago if Congress fails to raise the federal borrowing limit and the country defaults on its debt obligations. The Treasury’s report says a default could cause the U.S. credit markets to freeze, the value of the dollar to plummet and U.S. interest rates to skyrocket
• Dollar -.05c to 96.84c US amid widespread U.S. dollar weakness.
• Oil -$.79 to $103.31 US
• Gold -$3.10 to $1,317.60US

Canadian 5 year bond yields markets -.00 to 1.86. The spread (obtained by subtracting the bond yield above from the industry average 5 yr rate published mortgage rate of 3.79) is centred within the profit range at 1.93. If the increase in bond yield continues upward, the spread shrinks, which could prompt interest rates to rise. The range for investor desired profitability is currently a bit lower than in the past, more in the region of 1.80 and 2.00.


At our Ontario Professional Development Day this week John Bordignon, EVP at Paradigm Quest spoke to us about the upcoming B21 changes coming in early 2014. No one knows for sure what the changes will be yet, but they will affect all 3 insurers, which means the Credit Unions will be affected by the changes this time too.

Some things he thought most likely are coming:

• complete elimination of stated income programs,
• increased documentation required to show proof of numerous areas
• and higher interest rates.

Bank of Canada may not hike interest rates until 2016: Scotiabank
Michael Babad The Globe and Mail Thursday, Oct. 03 2013

How long for the Bank of Canada?

Bank of Nova Scotia economists are now raising the possibility of no move in the Bank of Canada’s benchmark interest rate until 2016.

Other observers have speculated on late next year or early in 2015 for the first rate hike by the central bank.
But Scotiabank’s Derek Holt, Mary Webb and Dov Zigler say the Bank of Canada is now signalling a hold of more than two years, citing signs in a recent speech by senior deputy governor Tiff Macklem, among other things.

Earlier this week, Mr. Macklem painted a less optimistic picture than that painted a couple of weeks earlier by Governor Stephen Poloz.

The Bank of Canada’s benchmark overnight rate now stands at just 1 per cent.

“The BoC probably now envisages spare capacity remaining into 2016,” the Scotiabank economists said, adding the central bank now projects hitting its 2-per-cent target for annual inflation in mid-2015.

They believe the Bank of Canada may change that forecast, to an even later date, when meets later this month and also issues its monetary policy report.

“Against the conventional thinking that the BoC would want to hike before spare capacity closes, we continue to think that very easy money will be required even as spare capacity shuts,” the economists said.
“That’s because we don’t see the economy slipping into material excess aggregate demand into 2016,” they added in a research note.

“Highly stimulative monetary policy may therefore be required even at a resting equilibrium of no spare capacity. An added constraint in this regard is that while the BoC has exercised modest policy independence from the Federal Reserve in the past and with a mixed track record, we continue to view the central bank as being toward the limits of independence from Fed policy.”

The Fed has vowed to hold its benchmark rate at effectively zero until unemployment eases to at least 6.5 per cent.


The Scotiabank economists have been further out than others in the belief that the Bank of Canada won’t move until the third quarter of 2015, with the possibility of holding steady until “well into 2016

Mortgage Market Commentary October 3, 2013

• TSX -8.44 to 12,839.00 (CP) amid rising concerns that a partial U.S. government shutdown in its second day will last longer than thought and impact negotiations over raising the U.S. government's debt ceiling in mid-October.
• DOW -58.56 to 15,133.14 Disappointing job creation data also pressured U.S. indexes. Payroll firm ADP reported that the U.S. private sector created 166,000 jobs last month, lower than the 178,000 that had been expected. It also revised lower its job creation figures for the previous two months. That's likely all the jobs data that traders will get this week as one of the spinoff effects of the shutdown is an absence of government data that usually moves markets.
• Dollar -.06c to 96.79c US as prices for copper,gold and oil advanced.
• Oil +$2.06 to $104.10 US
• Gold +$34.60 to $1,320.70US bullion's attraction as safe haven investment pushed prices higher.

Canadian 5 year bond yields markets -.01 to 1.86. The spread (obtained by subtracting the bond yield above from the industry average 5 yr rate published mortgage rate of 3.79) is centred within the profit range at 1.93. If the increase in bond yield continues upward, the spread shrinks, which could prompt interest rates to rise. The range for investor desired profitability is currently a bit lower than in the past, more in the region of 1.80 and 2.00.



Canada’s love for home renovation wanes: report
Brenda Bouw | Pay Day – Tue, 1 Oct, 2013

Canada's obsession with home improvement is starting to fade due in part to rising interest rates and debt levels, but also because we’re running out of rooms to refurbish, a new report suggests.

After about a decade of redoing kitchens and bathroom, TD Bank predicts renovation activity will slow for the rest of this year and next.

Home renovation spending has grown 7 per cent a year for the past decade, but will fall to half its historical rate for the rest of the year and throughout 2014, the bank says.

“In 2015, the combined effect of higher interest rates, elevated household debt levels and a cooling in housing markets is likely to lead to a modest dip in renovation outlays,” TD Bank economist Diana Petramala said in a note.

Still, she says the $45 billion in total renovation activity expected by 2015 is still more than double its level of a decade ago.

Canadians’ rush to renovate happened alongside a home buying surge over the past decade, driven by rock-bottom interest rates. That also spawned a number of reality shows such as Property Brothers, Holmes on Homes and the Do It Yourself Network, which further fuelled the home renovation frenzy.

The economic importance of the sector has also skyrocketed over the past 20 years, notes Petramala.
Citing Statistics Canada data, she says home renovations account for nearly 40 per cent of total residential investment today, up from 25 per cent in the 1990s.

But that is expected to moderate in the coming years, with the exception of work done to benefit Baby Boomers as they age.

“While home improvements to add quality and value to ones home were likely more popular forms of spending over the last decade, renovations to help make homes more accessible for seniors are expected to be a bigger source of renovation activity over the longer term,” Petramala writes.

For the rest of the population, renovations are expected to slow now that we’ve updated much of what we own.
“There will probably continue to be a significant share of remodeling projects. However, the recent string of new homebuilding and renovation spending has left the Canadian housing stock in the best condition in decades,” Petramala says.

About a quarter of current housing stock in the country still needs minor repairs and maintenance. Petramala says the average age of homes in Canada is also falling, which isn't surprising given the amount of new construction that has hit the market in recent years.

Her report comes as home renovation companies like Rona Inc, Canada's largest home improvement retailer, struggle with falling sales.

Economists are also forecasting Canada's housing market will slow, despite a surprisingly strong summer, particularly in large cities such as Toronto and Vancouver.

We're also saving more, even though our debt-to-household income ratio was at a record late last year. Last month, TD economist Leslie Preston noted Canadians' personal savings rate is near a 16-year high.

"Despite the focus on the high absolute level of household indebtedness, it is apparent that households in Canada have shifted towards greater thrift," Preston wrote. "This trend suggests that households have been taking action to improve their longer-term financial prospects."

Mortgage Market Commentary - August 12, 2013

TSX -10.79 to 12,542.13(CP) amid a mixed bag of quarterly financial reports and signs that Canada's private sector added jobs last month even as the overall unemployment rate rose in June to 7.2%. A double-dose of economic news was released in Canada, potentially indicating that the economy wasn't faring at a pace that some have come to expect. Statistics Canada reported a net loss of 39,400 last month, with public sector workers and youth taking on the biggest share of the losses. On a positive note, however, Canada's private sector employers added 31,400 jobs.

DOW -72.81 to 15,425.51 An onslaught of positive economic data from China was not enough to lift the markets, as figures showed that Chinese inflation in July was steady at an annual rate of 2.7 per cent. . Chinese industrial production also rose 9.7 per cent in the year to June, ahead of expectations for a nine per cent increase and retail sales grew 13.2 per cent in July from a year earlier

Dollar +.28c to 97.14c US

Oil -$2.57 to $105.97

Gold +$2.20 to $1,312.90US

Canadian 5 year bond yields markets -.02 to 1.76
The spread (obtained by subtracting the bond yield above from the industry average 5 yr rate published mortgage rate of 3.59) is slightly below the profit range at 1.83. If the increase in bond yield continues upward, the spread shrinks, which could prompt interest rates to rise. The range for investor desired profitability is currently in the region of 1.90 and 2.10


Want to improve your presentation skills?
Maria Elena Duron The Globe and Mail Published Wednesday, Jul. 10 2013,

Knowing how to deliver a good presentation is an important skill for everyone, whether they’re still students or the leaders of an organization. The knowledge that an individual possesses doesn’t make a difference if they don’t know how to convey those thoughts concisely. If you are a small business owner, having a superior product is likewise not a guarantee that your business will sell loads of it and be successful if you don’t know how to present the product in a way that will convince your audience to purchase it.

An individual’s success is directly related to their ability to influence others, because having good presentation skills captures the interest of the audience and eventually transforms their view to your point of view. The skill to speak effectively is crucial to building a brand and to the success of the business. If you are someone who is very knowledgeable about your field of work and you have the ability to share that knowledge effectively, people will look to you as an expert in that field. This in turn, will help you in your word of mouth marketing strategy for the brand because people will not only rely on your products, they’ll also look for advice and recommendations.

But not everyone has the gift of gab. In fact, a lot of people dread speaking or presenting in public. This doesn’t mean that this skill can’t be learned. With this in mind, here are some of the tips that will get you comfortable when speaking in public so you have a positive impact on others.

Public speaking tips
Your presentation skills are greatly influenced by the efforts you put into preparation. Start with choosing the right clothes to wear. Dressing is very important in creating an impression to the audience. Aim for a decent and professional look; it makes you more comfortable and confident, aspects that will be reflected to the audience who will focus more on what you have to say rather than your clothes and appearance. Prepare visual aids, handouts, posters, and other helpful material to aid your oral presentation. Not everyone in your audience will concentrate for the full length of the presentation, so these aids come in handy to pique their attention.

Prepare a speech beforehand. Thoughts are scrambled and words are hard to put together if you choose to do things on the fly. A readily prepared speech gives you pointers to base the presentation on, and also conveys an organized flow of thought and ideas. Don’t forget to practice it, too!

Have a clear message. It is essential that you know the purpose and objectives of the message.
Be clear and concise in your delivery. Again, the audience will likely shift their attention to something else if you start rambling on about a particular highlight. Keep it at most three points per topic, to keep from burdening the audience with too much information. Further explanations to particular topics can be supplemented by printed handouts and booklets.

Deliver your message effectively. It is very important to know how to express your message to your audience. Avoid using words or phrases that are unfamiliar with your audience, or that may be deemed as technical/jargon. Be conscious of the tone of your voice as it will set the mood. It helps to share stories, quotes, and anecdotes that your audience can identify with. Doing this increases the engagement levels with the audience, and makes them more receptive to the presentation.

At the end, interact with them by asking questions or feedback about what you have just presented.
Public speaking, though not easy at first, is a very important tool to keep in your word of mouth marketing arsenal. It provides you with a clear path to the audience’s mind, so you have to be on your A-game before, during, and after the presentation. Keep these tips in mind and you’re sure to pull off a great public presentation.

Mortgage Commentary March 7, 2013

As at close of markets Wednesday

TSX +95.93 to 12,831.96(CP)

DOW +42.47 to 14,296.24 Positive employment data helped push the Dow Jones industrial average to a fresh, record high for a second day — its highest level since early October 2007. Payroll firm ADP said the private sector created 198,000 jobs last month. Also the central bank's so-called Beige Book said the U.S. economy expanded in all parts of the country in January and February, helped by strong auto sales, a continued recovery in housing and improved job prospects.

Dollar -.33c to 96.96c US after the Bank of Canada kept its key rate unchanged at one per cent and indicated that persistent economic weakness and low inflation means a hike is a long ways off.

Oil -$.39 to $90.43US after the U.S. Energy Information Administration reported that crude supplies climbed by 3.8 million barrels last week, much higher than the 1.1 million-barrel climb that analysts expected.

Gold +$0 to $1,574.90

Canadian 5 year bond yields markets -.01 to 1.30The spread (obtained by subtracting the bond yield above from the industry average 5 yr rate published mortgage rate of 3.24) is now centred in the desired profit range at 1.94 . If the increase in bond yield continues upward, the spread shrinks, which could prompt interest rates to rise. The range for investor desired profitability is currently in the region of 1.90 and 2.10

Bank of Canada softens stance, but rate hike still on horizonGordon Isfeld | Financial Post 13/03/06

OTTAWA — After months of staring down increasingly threatening economic data here and abroad, the Bank of Canada appears to have blinked — ever so slightly.

The central bank on Wednesday did what it has done for two-and-a-half-years, leaving its near-rock-bottom interest rate unturned.

But the wording behind the decision — keeping its trendsetting lending level at 1% — has been softened somewhat.

The bank, which has left its key rate at the same level since September 2010, also highlighted concerns over continued slack in the economy and pointed to a longer extension of that holding pattern.

I don't think anybody is going to be taken by surprise by what they are saying. I think most believe that the bank is going nowhere for a long period of time," said Douglas Porter, chief economist at BMO Capital Market.

"But to have the bank actually spell it out so explicitly was a little bit of a surprise," he said. "They've been a little bit stronger in their language than most had expected. But it's hardly a shock."

In their statement, policymakers said that given the "continued slack in the Canadian economy, the muted outlook for inflation, and the more constructive evolution of imbalances in the household sector, the considerable monetary stimulus currently place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required."

Mortgage Market Commentary March 6, 2013

As at close of markets Tuesday

TSX +28.63 to 12,736.04(CP) Investors took comfort from China's announcement of record government spending this year, which helped lift commodity prices. Scotiabank results of an increase in quarterly profit of 13% capped off a week of stronger-than-expected quarterly reports from Canada's top banks, which in many cases used lower loan-loss provisions, cost-cutting, and stronger international revenue to offset slower growth in domestic consumer lending

DOW +125.95 to 14,253.77 Assurances from China's leadership that the government will make sure economic targets will be met helped push New York's Dow industrials to an all-time record high, breaking through its previous record high from October 2007

Dollar -.02c to 97.28c US a day before the Bank of Canada makes its next announcement on interest rates

Oil +$.70 to $90.82US

Gold +$2.50 to $1,574.90

Canadian 5 year bond yields markets +.00 to 1.31The spread (obtained by subtracting the bond yield above from the industry average 5 yr rate published mortgage rate of 3.24) is now centred in the desired profit range at 1.93 . If the increase in bond yield continues upward, the spread shrinks, which could prompt interest rates to rise. The range for investor desired profitability is currently in the region of 1.90 and 2.10



Home sales slip further, but signs of traction emerge
TARA PERKINS, BRENT JANG - REAL ESTATE REPORTER TORONTO and VANCOUVER — The Globe and Mail Monday, Mar. 04 2013

Canada's housing market may still be cooling, but there are fears in some quarters that "bubble fatigue" will pump it back up heading into the spring season.

What economist Benjamin Tal means when he uses that phrase is that home buyers are skeptical about whether the residential real estate market is heading for a sharp price and sales drop. At the same time, mortgage rates are declining, not rising.

Just this weekend, Bank of Montreal cut the price on its five-year, fixed-rate mortgage to 2.99 per cent from 3.09 per cent. That's the lowest advertised rate among Canada's big banks, and lower rates are available in the market.

The concern for observers like Mr. Tal is that the housing market needed to deflate, as it has since Finance Minister Jim Flaherty brought in new mortgage restrictions last summer in an attempt to engineer a soft landing. Should that reverse, it could lead to bigger problems down the road.

"I think the spring will surprise on the upside," the CIBC World Markets economist said on Monday.

"I don't think, from a macroeconomic perspective, that is a good thing, since we do need to see the market softening. Any delay in that process will add to a longer and maybe even deeper adjustment in the future," Mr. Tal said.

Indeed, "bubble fatigue" may well prove wrong the forecast for dismal sales this spring, he added.

"People have been talking about a collapse for two years, so many are becoming a bit skeptical about that," he said. "As well, rates are in fact going down, not up."

For now, the slump in sales continues, with the Greater Vancouver area reporting on Monday a 29-per-cent decline in February to 1,797 on the Multiple Listing Service from 2,545 a year earlier. It marked the second-lowest February level since 2001.

Sales in the Greater Toronto Area during the first 14 days of the month were down 8.3 per cent from a year ago. (Full monthly figures will be released Tuesday.)

And sales in Calgary, which was forecast to be an outlier this season with rising transactions, saw them dip 1.27 per cent year over year in February.

Several economists and policy makers still hope for an orderly slowdown amid lingering fears that prices remain too high.

The Fitch ratings agency said Monday that Canadian prices are overvalued by about 20 per cent. And while that estimate is somewhat higher than most, many economists believe it would be unhealthy for a market rebound this season. They hope prices will soften before any market rise in interest rates or drop in employment, either of which could spell trouble.

Because of inflation and the momentum in prices, Fitch does not forecast that prices will drop that far, and it expects a decline to be gradual.

"If growth halted and prices began to drop, it would be expected to take several years for home prices to revert to their sustainable values, depending on a number of factors such as government support and credit availability," the rating agency said. "With this time frame, the actual observed decline in prices could be as low as 10 per cent," with inflation offsetting some of the greater decrease.

There are signs that the sales slump that has persisted since the middle of last year is nearing an end.

Vancouver's February sales, while much lower than a year ago, were still up 33 per cent from January.

"With a two-point increase in our sales to active listings ratio and a reduction in the average number of days it's taking to sell a home, February showed some subtle indications of a changing sentiment in the marketplace compared to recent months," said Eugen Klein, president of the Real Estate Board of Greater Vancouver. New listings are also down in Toronto, lending support to prices in the country's most populous city.

Real estate economist Diana Petramala of Toronto-Dominion Bank noted that national sales have fallen by about 8 per cent since Mr. Flaherty tightened the mortgage insurance rules in July. "Our view is that the impact of mortgage insurance rules tends to be very temporary, and lasts for about two to three quarters," she said. "So we do think we'll see a bit of a bounce back in sales, particularly heading into the spring period."http://www.theglobeandmail.com/report-on-business/economy/housing/canadian-home-prices-overinflated-by-20-per-cent-fitch/article9257855/

Mortgage Market Update March 5, 2013

As at close of markets Monday

TSX -65.71 to 12,707.41(CP) A new round of worry about the Chinese economy and uncertainty about the impact of big U.S. government spending cuts pushed the Toronto stock market lower. Also depressing buying sentiment Monday was a move by the Chinese government to cool surging housing prices. The government said it will raise required minimum down payments in areas where prices are deemed to be rising too fast and crack down on efforts to evade limits on how many properties each buyer can acquire. Any move to tighten China's economy is usually taken as a negative because the world's second biggest economy has played a huge role in helping the overall global economy recover from the 2008 financial collapse and subsequent recession.

DOW +38.16 to 14,127.82 In New York, where indexes aren't nearly so resource dominated, stocks advanced despite concerns that the US$85 billion in across-the-board cuts that went into effect Friday could slow the economic recovery. Republicans insist there can be no new taxes and Democrats refuse to talk about any bargain without them.

Dollar -.06c to 97.30c US two days before the Bank of Canada makes its next announcement on interest rates. The bank could signal that interest rate hikes are even further down the road than thought because of persistent economic weakness.

Oil -$.56 to $90.12US

Gold +$.10 to $1,572.40


Canadian 5 year bond yields markets +.01 to 1.31The spread (obtained by subtracting the bond yield above from the industry average 5 yr rate published mortgage rate of 3.24) is now centred in the desired profit range at 1.93 . If the increase in bond yield continues upward, the spread shrinks, which could prompt interest rates to rise. The range for investor desired profitability is currently in the region of 1.90 and 2.10

If your clients saw this article in the Globe, be prepared for these 5 questions.

Decoding the mortgage market

Are you getting the best mortgage rate? 5 questions to ask your broker
Robert McLister Special to The Globe and Mail PublishedMonday, Mar. 04 2013, 6:00 AM EST

There are many mortgage professionals who are skilled, honest and dedicated to their customers. But if you're shopping for a mortgage, those aren't the ones you need to worry about.

In my last column, I highlighted mortgage conflicts in the banking world. This time I'll reveal potential pitfalls when dealing with less-than-ethical independent mortgage brokers.

One of the biggest challenges some brokers face is the lure of letting compensation dictate their recommendations. Brokers are usually paid by the lender for referring customers and processing applications. But that compensation varies, with some lenders and mortgage types paying more than others. For a minority of brokers, the prospect of a higher payday is irresistible.

Term-based compensationGenerally, the longer the mortgage term, the more a broker gets paid. One-year terms, for example, pay 25 to 50 per cent less than five-year terms. An unethical broker may consider that a disincentive and rarely sell a one-year term, even if it's the best fit for a client.

This, of course, sparks concerns about how often unsuitable mortgages are recommended. It's one example of why forward-thinking regulators in Ontario, Saskatchewan and Nova Scotia require that brokers confirm suitability when recommending a mortgage. This suitability legislation, which doesn't apply to mortgage salespeople at banks, is a consumer protection that should be adopted in every province of the country.

Some of the term bias in the mortgage business stems from inexperience. A newbie broker may not know how to weigh the risk or reward of a one – or 10-year term with the needs of a client. Instead, they may simply recommend a "safe" garden variety five-year fixed.

How much experience do brokers need to be competent? "If they're brand new to the industry with no lending experience, it can take up to five years to learn the permutations [of the mortgage market], understand credit and apply it relevantly," says Rob Regan-Pollock, a senior mortgage adviser and veteran broker with Invis.

Scaled pricingOne of the biggest conflicts of interest in the broker world is something called "scaled pricing." That's where a lender offers two rates for the same mortgage: a competitive rate with fair compensation to the broker, and a higher less-competitive rate which pays the broker extra.

Some brokers sell those above-market rates and the client is none the wiser. In certain cases, it may be justified if the borrower has qualification challenges that demand an unusual amount of effort or expertise. But a less-fiduciary broker may simply pocket the extra commission.

How do you as a customer prevent this from happening?

Step one is asking this question point blank: "Is the rate you're quoting me the lowest rate for that term on that lender's broker rate sheet?" If you have any doubt, ask another broker for a second opinion.

Step two is knowing the most competitive rates in the market. Compare a broker's rates against those you find online. Just make sure that the rates you've found include similar privileges, the same or fewer restrictions, comparable service/advice, like qualifications and the same rate guarantee period. If a broker then tries to sell you a materially higher rate – e.g., 3.14 per cent instead of 2.99 per cent – he or she better have a good reason.

Status programsAnother broker conflict is what's known as status programs. That's where a lender gives a broker better rates and service in return for higher volume.

On one hand, this is great for customers because they get that lender's best deals and fast turnaround. High-volume brokers who are loyal to a lender also tend to know that lender's products inside out, minimizing surprises on or after your closing date.

However, when a broker sends a mortgage to a lender primarily to meet its volume targets, status programs become a problem. Some brokers do this to maintain their perks with a lender, even though another lender has a better mortgage for that client.

Data from mortgage technology provider Davis + Henderson suggests there are 24 lenders that do significant business with brokers (i.e., control more than 0.1 per cent of the broker market). Theoretically, that lets brokers offer far more choices than the one option people get when they go to a bank.

Yet, according to Maritz Research, a whopping 90 per cent of the average broker's volume goes to only three lenders. Those three lenders may have the best rates and products for the broker's target clientele – or they may not.

At any given time, only one of those 24 lenders may have the optimal mortgage for a given borrower. But, if you're a broker who only uses a handful of lenders, your customers' chances of getting that best deal drop considerably. That's why dealing with a high-volume broker can pay.

"There is power in volume," says Mr. Regan-Pollock. "Lender status matters and that's something that consumers don't really know."

If a brokerage closes $200-million versus $20-million, for example, "That gives it more options for best pricing. If I can get a nickel or dime (0.05 per cent or 0.10 per cent) off the rate, that is significant savings over five years."

When you're shopping for a broker, a $100-million-plus broker team will generally provide you the widest array of rates and options. It's a sad truth but mom and pop independent brokers are a dying breed in the mortgage broker business.

Rates rates ratesIf you talk to a broker you've never met and the first thing out of his or her mouth is a rate quote, you may have picked the wrong broker.

"Mortgage professionals don't get into rates without explaining products," says Mr. Regan-Pollock. "It's a warning sign when someone talks about the rate before they know who I am and have a strategy session."

The reason? Rates are just one part of total borrowing cost, which can rise due to things like: fees, penalty calculations, prepayment restrictions, completely closed terms, portability restrictions and uncompetitive rates when adding money to your existing mortgage or converting to a different term.

When a broker quotes rates without knowing a client's circumstances, they become a glorified "shopping service," says Mr. Regan-Pollock, as opposed to a trusted adviser who recommends a mortgage relevant to your future plans.

DisclosureConflicts, like those above, are supposed to appear in disclosure documents mandated by provincial regulators. But I've seen cases where the disclosure language is so vague, the clients would have little clue they've been sold an inferior mortgage.

It's important to stress that most brokers, like most bank mortgage representatives, truly do have their client's best interest in mind. After all, we're in a business that lives off referrals. But you have to keep vigilant and never be afraid to challenge your mortgage adviser with hard questions.

Here are five such questions to remember:

1. How long have you been in the business? (Ideally, at least two to five years)

2. How many lenders does your team have "top-tier status" with? (Preferably six to seven or more)

3. Is the rate you're quoting me the lowest rate for that term on that lender's broker rate sheet? (If not, why not?)

4. How much volume did your team do last year? (Ideally $100-million-plus)

5. Do you do over 50 per cent of your business with one lender? (If so, why?)

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/are-you-getting-the-best-mortgage-rate-5-questions-to-ask-your-broker/article9251384/

Growth in House Prices in Major Cities

Growth in house prices in major cities

Published Monday, Apr. 30, 2012 5:44PM EDT

Mortgage Market Commentary April 5, 2012

A big surprise from Canada’s job numbers for March – 82,000 jobs created, dropping the unemployment rate 0.2 of a percentage point to 7.2%. Expectations had been for about 10,000 new jobs. The increase is broadly based and mostly full time positions. Canadian employment is up 1.1% Y/Y.

 

The total value of Canadian building permits is up 7.5%, to $6.5 billion for February – soundly beating expectations. The increase was led by non-residential construction and reverses an 11.4% drop in January. The value of non-residential permits jumped 36.2% to $2.5 billion in February. Residential permits declined 5.3% to $3.9 billion.

 

And European debt jitters are creeping back into investor psyche. A lacklustre government bond auction in Spain saw low demand and higher yields.

 

Mortgage Rates remain unchanged.