Bosley Realestate

Canada’s Big Banks Respond To Covid19 Pandemic Panic

March 18th, 2020 | Real Estate

At a time when our collective world is being turned upside down, we're extra thankful that we've forged valuable relationships with knowledgeable, trustworthy partners! Over the years the advice and guidance from our go-to mortgage broker - Mortgage Jake - has been absolutely invaluable.

He's informed on the latest, including how the Canadian Big Banks and other mortgage lenders are restructuring their approach to lending and finance due to the Covid19 pandemic. 

 

 

 

 

Jake holds himself to a high standard, ensuring he quickly disseminates crucial information to his clientele. Case in point: today we received an email from Jake containing a vital piece of news for buyers, sellers, realtors, mortgage applicants, investors, etc., and a prediction on what we'll be seeing in the near future.

Canada's major banks just announced they will be tweaking their procedures and policies in response to the COVID-19 pandemic.

 


Here is MortgageJake's update:

Last night the big banks announced a collaborative effort to allow for six month deferrals of mortgage payments and other credit. We do not know the specifics yet, I expect all lenders to follow suit, and we will know later this week how this will play out. Morneau just said a $50B package is available to banks & lenders. Very important. If your clients are asking please have them contact their bank directly because they will get the answer quickest. Most banks/lenders do not know yet how this will play out though. I can absolutely help clients figure out where to call. I am posting a thorough lender list today of all contact information.

Appraisals are starting to be a little more difficult to do. Get your appraisals in asap. Lenders might start accepting "drive-by" and desktop appraisals which will help when properties auto-appraise or aren't "unique". If your client (over)paid to get their house, they should be prepared to make up the difference(s).

Refinances might dry up next week, as early as Monday. All refinances in the pipeline will continue to be funded but new applications may stop. This won't be with every lender but this is not something I am surprised to see/read. This would be a HUGE impact on our ability to use our equity to survive the next 6 months. Ugh. I'm worried.

 

 

Interest rates are going up. Variable-rate discounts are evaporating and fixed rates are rising. Bond yields have steadily increased in the last 3 days. Hence, the lenders' increases in rates. Liquidity is becoming a problem. Hence, the lenders' increase in rates. Clients who are rate-sensitive should get approvals asap and finalize their files PRONTO. All docs with broker/lender need to get in TODAY. No delays. This is not a time to 'shop around' in my humble opinion. Advice, not price.

Approvals are taking longer - not 5 days yet - but a little longer than normal due to: 1. Volume, and 2. Staff working from home. Lender exceptions may not be around much longer - if your file needs one extra checkmark, oh oh.

People who bought and need to sell must have a plan B as soon as possible - just in case. Anticipate a quick sale may not happen and/or be hugely impacted, so a refinance or HELOC option may be the only option. The private market is going to cut back. "65% is the new 80%". This means the percentage of loan to values will be lower, which means less equity will be available to extract by borrowers.

~ Jake

 


 

Have questions for our mortgage expert, MortgageJake? Reach him via email: jake@mortgagejake.com

 

 

Want another must-read? See what Jake has to say about other financial hurdles on the horizon: Canadian Real Estate Sees Interest Rate Cut & Mortgage Stress Test Change.

 


 

If you're interested in learning more about the Toronto market through our lens, consider reading some of my other posts:

Getting On The Bidding War Bandwagon

About Holdbacks On Offers, Bully Offers & Bidding Wars For Buyers - and - Sellers

The Implications Of Moving Toward An Asset-Based Economy

Here’s What’s Happening With The Toronto Condominium Market

 


 

We're Urbaneer.com!

May my team and I become your realtors of choice, and guide you to the best of the best Toronto real estate as it meets your wishes, wants and needs?

With a multi-disciplinary education in housing - and 27 years experience in the property market - let me help you develop your custom housing matrix so that you can secure the right property. 

 

 

Thanks for reading!

 

-The Urbaneer Team

Steven Fudge, Sales Representative
& The Innovative Urbaneer Team
Bosley Real Estate Ltd., Brokerage - (416) 322-8000

- we're here to earn your trust, then your business -

 

*Did you know we were recently listed as one of The Top 25 Toronto Real Estate Agents To Follow On Twitter! - The Top 50 Blogs On Toronto - and The Top 100 Real Estate Blogs In Canada? Consider signing up in the box below to receive our FREE monthly e-newsletter on housing, culture and design including our love for unique urban homes and other Toronto real estate!

*Love Canadian Housing? Check out Steve's University Student Mentorship site called Houseporn.ca which focuses on architecture, landscape, design, products and real estate in Canada.

Subscribe To Our Free Monthly Newsletter