THANK YOU FOR YOUR BUSINESS
Thank you to the Professionals: Jocko Toic of the Investors Group, Kathy York of Prudential Kelowna Properties and Christopher Blake of Prudential Kelowna Properties.
Thank you to the clients: Ron and Doug Lepan, Shannon Beaudry, Henri and Laura Beaudry, Thomas Wood.
WHAT A SUMMER!
Well I can tell you that I am very sad to see the summer go. In the Okanagan, you can expect to have a home like a hotel when you're from Alberta it is always great to have the company and spend so much time outside on the beach and in the sun. I know when they go, you're like "aaahhh my couch and TV all to myself". But I found myself today wishing it was July 1st and wishing to do it all again. I hope all of you had a great summer and good luck getting back to that routine. Have a safe first week back to school.
Sincerely Your Mortgage Broker,
Steven Faux
Consumer confidence highest since early '07
By Bill Mah, Edmonton Journal August 11, 2009
More Albertans believe now is the time to buy a home than in anytime since PricewaterhouseCoopers began tracking the indicator in early 2007, said the firm's business and consumer confidence survey released Monday.
Buying a house reached an index rating of 164 in July--the highest index since tracking started in February 2007. It was 157 in May and 146 in March.
"Consumers continue to see advantage in purchasing a house in the current economy," said David Bryan an advisory partner in PricewaterhouseCooper's Edmonton office.
Nine hundred Albertans and 246 business leaders were surveyed by telephone in late July by Leger Marketing. The margin of error is plus or minus 3.3 per cent, 19 times of 20.
Businesses are growing more optimistic about the economy, results suggest. The business confidence index inched to 103 in July, up from 101 in May--when it crossed the 100 mark for the first time since May 2008.
An index score above 100 represents an optimistic sentiment, while a score below 100 represents a pessimistic feeling.
"These figures are promising and appear to indicate that many Alberta business and consumers are expecting improvements in Alberta's economic conditions in the coming year," Bryan said.
Business leaders also expect interest rates may rise in the next few months as the economy recovers and their confidence in the job market reached 107, breaking 100 for the first time since May 2008.
"While business leaders are pessimistic about the current business environment, they are optimistic that things will change in the near future. This optimism is scaled back a bit from May '09 which may indicate that they feel it will take somewhat longer for the the current economic climate to improve."
Consumers, meanwhile, are growing more confident about jobs. While still below the 100 mark, the survey's future consumer unemployment index increased to 93 in July, up from 81 in May.
"Consumers are starting to feel more positive on multiple fronts ranging from finding a job to buying a house," Bryan said.
But the optimism runs counter to Alberta's unemployment rate, which has steadily increased since last October to 7.2 per cent in July.
"Although unemployment has increased, we are still Canada's third-lowest unemployment rate behind the provinces of Saskatchewan and Manitoba. This survey likely indicates that both consumers and business leaders anticipate our unemployment rate will now start to decline," Bryan said.
Buying inducements must be disclosed
Bob Aaron in Legal
Lenders need to have all pertinent information to prevent mortgage fraud allegations.
An Alberta court has ruled that the contents of a lawyer's file in a real estate transaction may be disclosed to the police when no legal advice was provided to the client, and the circumstances give rise to a presumption that a crime was committed.
Back in April 2007, Christopher and Roya Gour began the process of buying their first home in Edmonton. They contacted a local realtor, Sanjay Sharma, who showed them a house listed at $405,900. He did not reveal that he was the seller as well as the agent.
When the Gours expressed concern that they would not be able to afford the renovations needed on the property, Sharma informed them that the seller would give them a "renovation credit'' of $40,000 on the purchase.
On May 1, 2007, the Gours agreed to buy the house for $405,000 and signed the paperwork.
ResMor Trust Company agreed to provide financing for $364,500 without knowing about the $40,000 renovation credit. As a result, it unknowingly financed the entire purchase price.
Sharma referred the Gours to David Westra, a local lawyer who would represent seller, buyer and new mortgage lender in the transaction. The deal closed June 30, 2007, and the Gours moved in.
In 2008, the Gours filed a complaint about the transaction with the Edmonton Police Service. The police began an investigation and applied to a judge under the Criminal Code for a warrant to search the Westra law office "on the basis that there were reasonable grounds to believe that Mr. Sharma and Mr. Westra had taken part in the furtherance of a mortgage fraud."
In the search warrant application, ResMor stated that had they known about the $40,000 credit, they would never have advanced the mortgage funds. They claimed they had been defrauded.
The search warrant was granted and executed. Various files relating to the Gour transaction were seized and sealed pending a second hearing by a judge to determine whether they were protected from disclosure to the police by solicitor-client privilege.
That hearing took place in Edmonton in April before Justice Sheila Greckol. The Crown alleged that there were reasonable and probable grounds to conclude that mortgage funds were obtained by fraud, and as a result, the files should be released to it.
ResMor and the Gours waived solicitor-client privilege, but Sharma strongly objected to the release of the transaction files and accounting records to the Crown.
As further evidence of the alleged offence, the police introduced an appraisal of the house concluding that its value at the time of the Gour purchase for $405,000 (or $365,000 after the $40,000 "credit") was between $320,000.00 and $335,000.00.
In her 25-page judgment published last month, Justice Greckol wrote, "The Crown has met its onus of showing, on a balance of probabilities, that there has been the commission of a crime." She ruled that the documents were not protected by solicitor-client privilege and ordered that they be released for purposes of the police investigation.
Two lessons emerge from the Westra Law Office case. The first is that where a criminal offence has allegedly been committed with respect to a real estate transaction and no legal advice has been provided, the transaction files may be released to the police. The second is that when a credit against the purchase price has been arranged but not disclosed to the mortgage lender, the lender may well allege that the mortgage has been arranged by fraudulent means.
A further reminder is in order. Some builders are offering an inducement of $15,000 as a credit against the contract purchase price. Even though this sort of inducement is perfectly legal, it is typically prepared on a separate document as an amendment to the agreement of purchase and sale.
It is imperative that buyers disclose this credit to their lenders. Failure to disclose may well be regarded as mortgage fraud.
Bob Aaron is a sole practitioner at the law firm of Aaron & Aaron in Toronto and a board member of the Tarion Warranty Corp. Bob specializes in the areas of real estate, corporate and commercial law, estates and wills and landlord/tenant law. His Title Page column appears Saturdays in The Toronto Star and weekly on Move Smartly.
Recession may be over but growth will be limited next year
Inflation and interest rates will remain low as economy recovers
TORONTO, Aug. 25 /CNW/ - CIBC (CM: TSX; NYSE) - The recession in Canada and the U.S. may be over, but the damage it left behind means Canadian growth and inflation will be muted next year, keeping Bank of Canada interest rate hikes on the sidelines until 2011, notes a new report from CIBC World Markets.
"While the 2009 recession may already be over, the slack it created is both large and likely to persist," says CIBC's Chief Economist Avery Shenfeld. "Unlike the Bank of Canada, we don't expect growth to average above the non-inflationary potential until 2011. But even under Governor Carney's more optimistic trajectory, inflation will still be feeling the downward pressure of a sizeable output gap next year, one as large as we saw in the early 1980s and 1990s downturns."
Mr. Shenfeld finds that while the core inflation rate did not decelerate as much as the Bank of Canada predicted earlier this year, there are reasons to expect a further easing in core inflation ahead. "A look at the underlying components for headline and core inflation helps identify what has, in our view temporarily, prevented core inflation from easing much thus far. And part of the answer lies in what economists call, the "income effect."
He notes that by stripping out volatile items from the CPI, the Bank of Canada's core measure now excludes most of the items that have been deflating, much more so than in the "old" core measure that simply left out all food and energy prices. With the "volatile" measures included, headline CPI is negative, largely driven by the dive in gasoline prices from a year ago. Lower gas prices have pulled down costs for intercity transportation fares as well, which the Bank of Canada also excludes from core inflation. Other non-core items such as natural gas, fuel oil and mortgage interest costs have also eased off.
"The deep dive in non-core items, has left those Canadians still working with some spending power," adds Mr. Shenfeld. "While nominal wages have begun to decelerate in a slack labour market, a negative year-on-year inflation rate has meant that in real terms, the buying power of the average wage has escalated. So after filling their gas tank and paying their new, lower, mortgage bills, Canadians simply have more money in their pockets when they go shopping for other items, keeping those prices aloft."
Mr. Shenfeld notes that economic slack usually takes time in exerting its disinflationary force. Given that wages get adjusted only as contracts come up and that some prices are fixed ahead of time (as is the case for catalogues), he believes the upward pressure on prices will ease in the coming months.
"Headline inflation rates won't be as benign as they have been," says Mr. Shenfeld. "If crude oil hugs the $60-70 range, energy will revert from a huge negative contributor to CPI to a modest positive in early 2010, with spillovers into related products like airline fares. But by reversing the "income effects" noted above, that implies diminished buying power for other goods, contributing to a cooling in core CPI. With a lag, a strong Canadian dollar will also provide a dampening impact on retail prices for imported goods and services.
"All told, Governor Carney will not fret about the stickiness of core inflation because, given time, core prices will come down. Look for headline and core prices to cross paths in the second quarter of 2010, at a level well under the Bank of Canada's two per cent target. As a result, Canada's inflation rate will be no threat to the Bank easily fulfilling its pledge to keep interest rates at a slim quarter point through mid-2010. In fact, market expectations for rate hikes in the first half of 2010 could be a full year too premature."
Unlike the central bank's outlook, the CIBC report does not see the Canadian economy gaining much benefit from a forecast U.S. recovery. It notes that the nature of the budding recovery will be very different than what we have seen in the past, with U.S. consumer spending taking a back seat to government stimulus.
CIBC's analysis finds that protectionist trade barriers and a tilt in U.S. stimulus spending towards industries that have less-than-average propensities to import from Canada, will dampen the benefits that this country typically sees from economic growth south of the border.
The complete CIBC World Markets report is available at: http://research.cibcwm.com/economic_public/download/saug09.pdf.
CIBC's wholesale banking business provides a range of integrated credit and capital markets products, investment banking, and merchant banking to clients in key financial markets in North America and around the world. We provide innovative capital solutions and advisory expertise across a wide range of industries as well as top-ranked research for our corporate, government and institutional clients.
Thank you to Rachelle Gregory from Merix Financial for the above article.
Steve's Rates
| Mortgage Term | Our Rates | Standard Rates |
|---|---|---|
| Variable Rate | 2.40% | 3.00% |
| 6 Month Closed | 4.75% | 4.95% |
| 1 Year Closed | 2.75% | 3.75% |
| 2 Year Closed | 2.85% | 4.05% |
| 3 Year Closed | 3.65% | 4.55% |
| 4 Year Closed | 3.99% | 5.24% |
| 5 Year Closed | 4.19% | 5.15% |
| 7 Year Closed | 5.05% | 5.55% |
| 10 Year Closed | 5.15% | 6.95% |
| 15 Year Closed | 9.05% | 0.00% |
| 18 Year Closed | 9.05% | 0.00% |
| 25 Year Closed | 9.15% | 0.00% |
Rates are subject to change with very little notice and certain conditions may apply to individual mortgage applications, QAC, E&OE
For the best rates call 1-866-993-8787.
Resources
Business Supporting Business — Thank You:
Investments
www.thenewwestside.ca
Insurance
Canyon Insurance covers all your needs, ask for Harry Mason
hmason@canyoninsurance.ca
FCm Travel Solutions
wes.flanagan@fcmtravel.ca
Jocko Toic - Consultant
Investors Group Financial Services
3500 Carrington Road, Suite 102, Westbank BC, V4T 3C1
Ph. (250) 707-3265 Cell (250) 869-9636
Fax (250) 768-4563 Toll Free (866) 768-4546
Email jocko.toic@investorsgroup.com
Success starts with a Sound Plan
Private Home Sellers
www.privatehomesellers.ca
David Beeson
Realtor for the Kelowna Area
Royal Lepage Phone:1-800-747-6954
Email: davidbeeson@royallepage.com
Spring Creek CONSTRUCTION & MILLWORK
Established 2007 by Owner/Operator Florian Hoppen with 25 years in the woodworking industry.
Spring Creek offers quality custom craftsmanship and superior service on:
- Woodwork & Millwork
- Cabinetry Building & Installation
- Woodcraft Doors
- Renovations
- New Building Construction
References for Projects and Workmanship upon Request
Contact: Florian Hoppen
Ph: 403-931-2247 Cell: 403-510-8925
Email: springcreek@platinum.ca
Leslie Marton, C-I-R REALTY
Calgary PH:403477-6996
EMAIL: lmarton@cirrealty.ca
Friends Supporting Friends — Thank You:
Krystal Beisick
www.krystalbeisick.com
For Investments check out — www.renascencedevelopments.com
Ask for Lisa Thomas lisa@renascencedevelopments.com
A Quote to Note:
Preschool Survival Kit
The penny is to remind you that you are valuable
The star is to remind you to always try your best
The eraser is to remind you that it's okay to make mistakes
The life saver is to let you know that you can always talk to me
The tissue is for drying your tears and those of others
The band-aid is to let you know that together we can make things better
The chocolate hug is to remind you that you are cared for
The sticker is to remind you that we always stick together
Also a member of the Okanagan Mortgage Lenders Association
Contact
At Prolink Mortgage Inc., I have over 30 lending financial mortgage institutions in Canada with Steve Faux sourcing the best rates and the best products to suit your needs!
Direct Line — 1.866.993.8787
Email — steve@yourmortgages.ca
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