A collection of articles and quick commentary on residential real estate. "It's different this time, really . . . " Ha ha ha. No, it's not.
When China goes down, so does Australia and Canada.
"Of course, CHMC is the 800-pound gorilla (actually, a 600-billion-dollar monkey) of the mortgage insurance business, underwriting the lion’s share of high-ratio, high-risk mortgages on houses bought by people who have no money. Because CMHC stands behind lenders like BMO or CIBC, it takes away their risk in the case of default. That means banks have no reason not to give money to people they’d otherwise laugh out of the branch.Behind CMHC, which is an agency reporting directly to the federal government, stands you. If CMHC, which last year had its lending authority extended to six hundred billion, a number roughly equivalent to the national debt, were ever to stumble, Ottawa would bail it out with tax dollars. At least, that’s the theory.Of course, that was the logic in the US, as well, when its quasi-governmental mortgage insuring giant, Fannie Mae collapsed in the housing bust. Well, $164 billion later, it is still an orphan of the state, bleeding from a million sores as the foreclosure crisis continues and defaults mount."http://www.greaterfool.ca/2011/07/22/default-denial/
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