COVID and the housing market

[nobbie48]

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Is that an actual ‘case study’ or a possible scenario?
Cash calls to maintain LTV are very rare.

It's a specific situation instead of a bunch of specific situations averaged out. Ideally they keep up payments and the bank lets the percentages ride, especially in an unstable market.

Decades ago I saw similar situation develop in a townhouse complex. Engineers found deterioration with a tab of millions. All owners were told to go to the bank for $20K each. A lot of owners were underwater due to the recession and said let the place rot.

Obviously owners with good equity saw things differently.

45 years ago we lost a deal on a house we really wanted because our offer was conditional. In our case it was the best thing that could have happened as we would have been caught renewing at 22% in the early 1980's rate rampage.

 

[crankcall]

The private lender thing is by far the scariest . Good friends father is a private mortgage lender , my good friend has three rental houses in Kitchener . Guess how he got rental houses for a way under market price? Hint , Dad foreclosed on idiots , doesn’t want to be a landlord so junior buys the houses . It’s a dirty business but pretty lucrative.


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[Mad Mike]

The private lender thing is by far the scariest . Good friends father is a private mortgage lender , my good friend has three rental houses in Kitchener . Guess how he got rental houses for a way under market price? Hint , Dad foreclosed on idiots , doesn’t want to be a landlord so junior buys the houses . It’s a dirty business but pretty lucrative.


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That's not only dirty - it’s a very dangerous game, and highly illegal. Canadian courts are hostile to lenders who engage in non arms length power of sale transactions, and punish lender if they can’t demonstrate they carried out their duty to protect the borrower and other creditors.

Lenders risk having the sale reversed back to the original owner + generous damages, not only from the home owner, but from other creditors too. CRA also revalues most of these transactions for tax purposes, putting the lender on the hook for FMV adjustments.

 

[nobbie48]

The private lender thing is by far the scariest . Good friends father is a private mortgage lender , my good friend has three rental houses in Kitchener . Guess how he got rental houses for a way under market price? Hint , Dad foreclosed on idiots , doesn’t want to be a landlord so junior buys the houses . It’s a dirty business but pretty lucrative.


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Good and bad. If the borrowers were over their heads because they were greedy flippers they get to see the backlash and IMO, tough luck. You gambled and lost.

More sympathy to those just wanting to get a foothold in the market.

The non-arms length part is also a gamble if pursued but home losers aren't usually flush with cash to pay for lawyers. I'd have trouble sleeping at night.

 

[crankcall]

I would hazard a guess the unfortunates they have dealt with couldn’t hire a second year student let alone an actual lawyer . Two kinds of people , those that understand compound interest and those that pay it .


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[nobbie48]

My algorithms keep feeding me posts and opinions by a chubby mortgage broker, usually painting a bleak picture of doom, gloom and nasty doings.

Isn't that counter productive for him?

 

[GreyGhost]

My algorithms keep feeding me posts and opinions by a chubby mortgage broker, usually painting a bleak picture of doom, gloom and nasty doings.

Isn't that counter productive for him?

Ron Butler? Some of his videos are a bit funny, I find most annoying.

EDIT:
As for is it productive? I know his name. That's a plus for him. I wouldn't call him because I love what he is doing though. That's a minus. I think the over/under varies for each person. As an aggregate, I suspect he thinks it helps him. If I was picking clients, those that worshiped an angry foul-mouthed dude would not be high on my list.

 

[Mad Mike]

Ron Butler? Some of his videos are a bit funny, I find most annoying.

EDIT:
As for is it productive? I know his name. That's a plus for him. I wouldn't call him because I love what he is doing though. That's a minus. I think the over/under varies for each person. As an aggregate, I suspect he thinks it helps him. If I was picking clients, those that worshiped an angry foul-mouthed dude would not be high on my list.

When people are looking for money, their standards go out the window.

 

[crankcall]

The “mortgage finder” guys with catchy ads are about one step up from the payday loan guys . They exist because there is a market , it’s sleazy, but desperate people do unfortunate things .


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[mimico_polak]

Good and bad. If the borrowers were over their heads because they were greedy flippers they get to see the backlash and IMO, tough luck. You gambled and lost.

More sympathy to those just wanting to get a foothold in the market.

The non-arms length part is also a gamble if pursued but home losers aren't usually flush with cash to pay for lawyers. I'd have trouble sleeping at night.

Our old realtor did this on the regular. 'Interest only payments' to flippers and if they missed X payments, he bought the house for a stupidly low price.

Dirty business, but if you know how to play it...VERY lucrative.

He's still active in the Mississauga area, and his son is in on the game also. He tried to get me to sign up (even offered to pay for my real estate license) but I felt dirty just talking to him.

 

[nobbie48]

The “mortgage finder” guys with catchy ads are about one step up from the payday loan guys . They exist because there is a market , it’s sleazy, but desperate people do unfortunate things .


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In some cases they work for a certain type of people. The type of people that the establishment says they can't do it. Those people are prepared to pack extra people into the house, live with it "As is", work multiple jobs and get their hands dirty.

 

[crankcall]

Many new Canadians and also Old Canadians in business for themselves , or those recently separated without a separation agreement can struggle to qualify for a conventional mortgage . These are often folks that will work hard and pay the mortgage ( sometimes early) . It’s the guy that has two mortgages and thinks three will consolidate credit card debt and get a new Durango hemi. That’s the problem.


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[GreyGhost]

Many new Canadians and also Old Canadians in business for themselves , or those recently separated without a separation agreement can struggle to qualify for a conventional mortgage . These are often folks that will work hard and pay the mortgage ( sometimes early) . It’s the guy that has two mortgages and thinks three will consolidate credit card debt and get a new Durango hemi. That’s the problem.


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On that note, I think a divorce (where you move out) qualifies you for an FHSA without a waiting period. FHSA is a magical account that lets you move a bunch of money pre-tax and it never gets taxed if it is eventually used for a house. It really tilts the own/rent math for the first seven years.

 

[Mad Mike]

Our old realtor did this on the regular. 'Interest only payments' to flippers and if they missed X payments, he bought the house for a stupidly low price.

Dirty business, but if you know how to play it...VERY lucrative.

He's still active in the Mississauga area, and his son is in on the game also. He tried to get me to sign up (even offered to pay for my real estate license) but I felt dirty just talking to him.

Dirty business and illegal. Realtors can’t do that for a lot of reasons.

Dirty realtors are out there, till they get caught or sued.

 

[GreyGhost]

Dirty business and illegal. Realtors can’t do that for a lot of reasons.

Dirty realtors are out there, till they get caught or sued.

Province appointed administrator is taking names and kicking ***** at RECO. CEO out. Multiple brokerages shuttered and their owners banned. More enforcement in the last month than the previous decade. Once they are done taking out dirty brokerages, I hope they look through the agent database and make purges where required there too.

 

[klr_guy]

I'd hoped this would be my forever home, but will likely sell in the next few years. My wife sadly died recently, unexpectedly in her early 50s.
4 bedrooms, 3k+ sq feet is absurd for my son and I.
Thankfully once a cause of death is determined and lawyers do their thing, it'll be mortgage free.

17 months later and after an absurd battle with the insurance company, I'm mortgage free. Last year's Christmas 'gift' was finally a cause of death. I much prefer this one. Merry Christmas to all.

 

[Dresden]

The private lender thing is by far the scariest . Good friends father is a private mortgage lender , my good friend has three rental houses in Kitchener . Guess how he got rental houses for a way under market price? Hint , Dad foreclosed on idiots , doesn’t want to be a landlord so junior buys the houses . It’s a dirty business but pretty lucrative.


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He's not your good friend if he lets you believe this fan fiction. LMAO.

--

RE: COVID Housing - decided to buy and overhaul a house in Bloor West. Reno costs are through the roof, and that's even IF you can get trades to do the work. Literally 2x since 2020 for almost everything.

RE: Condos
I think the worst of the condo slowdown is behind us. Build costs are ~$700/sf. At some point, Gen Z is going to realize there is no alternative if they ever want to get off the rental system. They just aren't building anymore SFH homes in the GTA in meaningful numbers. Costs to build are NOT coming down and the City has their hands tied so they can't lower development costs for a 2 bedroom in a high rise - 2019: $45K
2024: $68K. (50% increase). Someone's gotta pay for the $100M community centres and hundreds of millions thrown at homeless.

Not expecting prices to skyrocket or even go up, just to not go down meaningfully from here and hover around $800-850/sf.

Just my $0.02

 

[nobbie48]

He's not your good friend if he lets you believe this fan fiction. LMAO.

--

RE: COVID Housing - decided to buy and overhaul a house in Bloor West. Reno costs are through the roof, and that's even IF you can get trades to do the work. Literally 2x since 2020 for almost everything.

RE: Condos
I think the worst of the condo slowdown is behind us. Build costs are ~$700/sf. At some point, Gen Z is going to realize there is no alternative if they ever want to get off the rental system. They just aren't building anymore SFH homes in the GTA in meaningful numbers. Costs to build are NOT coming down and the City has their hands tied so they can't lower development costs for a 2 bedroom in a high rise - 2019: $45K
2024: $68K. (50% increase). Someone's gotta pay for the $100M community centres and hundreds of millions thrown at homeless.

Not expecting prices to skyrocket or even go up, just to not go down meaningfully from here and hover around $800-850/sf.

Just my $0.02

Don't forget the $158 million for a few cyclists that might use the rail trail around Liberty Village when they aren't using High Park as their personal country club. 400 acres should be worth about a billion.

Instead of the above, 158 families could be in their own homes 24/365 while setting aside the rent savings to put their kids through secondary education. Thus breaking the poverty gap.

 

[nobbie48]

Re the 158 million being moved from cycling infrastructure to housing:

It isn't simple. A million dollars going to a family with a history of welfare and system abuse would be obscene to anyone with common sense. However, blind liberalism would demand them another chance.

Money being hidden offshore to qualify is another possibility.

Loopholes abound and our officials are suckers at spotting them.

Low rent housing could do the job but the LTB and rights advocates would screw things up.

Setting reasonable boundaries would be seen as judgmental.

Government money = government specs = higher costs = guaranteed payment for over runs.

 

[GreyGhost]

Re the 158 million being moved from cycling infrastructure to housing:

It isn't simple. A million dollars going to a family with a history of welfare and system abuse would be obscene to anyone with common sense. However, blind liberalism would demand them another chance.

Money being hidden offshore to qualify is another possibility.

Loopholes abound and our officials are suckers at spotting them.

Low rent housing could do the job but the LTB and rights advocates would screw things up.

Setting reasonable boundaries would be seen as judgmental.

Government money = government specs = higher costs = guaranteed payment for over runs.

I think the important point that should be clear to anyone with a brain is a short $158M bike path is a terrible use of taxpayer funds. Far too many people think that if a project is a good idea, it is a good idea at any cost and they are very very wrong. Many citizens and politicians have completely lost the plot on reality.

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