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" n3 k& z% W9 n & [9 |1 d/ L- }: U% v , W3 C8 w  }3 H- |Industry News 8 F! W: {' u$ r+ d, d6 a& VHere we go, again. The economy is generating more jobs, a handful of banks raise mortgage rates and all of a sudden you’re being advised to lock in your mortgage before the bank doors slam shut. In fact, some say you’d better hurry up and buy a house now before mortgage rates go so high you’re locked out of the housing market forever. This is not the first time that mortgage rates are on the brink of blooming only to fade a few months later. This has happened more than a handful of times in the last decade. The headlines are often the same. A month or two of increasing mortgage rates, the public is urged to act now, and then a few months later something unforeseen appears on the horizon.   Q0 d) g# u, T# s# B' vThe last occasion was just over a year ago. The posted five-year mortgage rate in March 2010 went from 4.7% to 5.15% in April, and then to 5.3% by May. The recommendations were clear: lock in. But then, by October they were back to 4.5%. The economy sputtered, Greece and Spain hit the headlines and the rest was history. ! z& Y+ `  o$ e: K7 U# E3 B6 R Don’t get me wrong. Short-term interest rates are abnormally low today and the Bank of Canada has pledged to raise them eventually. But that is a far cry from advocating that you lock in your mortgage – which is actually driven by long-term bond market rates – or heaven forbid using this as an excuse to buy a house you can’t really afford. + c5 J3 q, U, `" n9 U3 A4 `2 LClick here to read the full article from The Star. The commercial real estate market saw an unprecedented recovery last year, with investment growing 48% as the economy improved and investors returned to the market. ; I$ g, P7 f0 e4 h$ @ Canadian commercial real estate sales volume reached $18.9 billion in 2010, according to CB Richard Ellis, from $12.7 billion in 2009 – though it’s still a long way from the $19.8 billion posted in 2005. % a4 k$ k+ @) O1 S+ g “Once we were a few weeks into 2010, we could feel momentum picking up so that by the year-end, we were about where we expected it to be,” said John O’Bryan, CBRE’s Vice Chairman. “It was really a coast-to-coast recovery – something we haven’t seen before.” The only market that didn’t see an increase in volume was London, Ontario. Toronto finished the year with $7.4 billion in trades, up from $3.8 billion in 2009 as volume grew by 95%. ! _* Q8 t/ T0 w9 D0 ~/ y0 u6 ? Click here to read more in the Globe and Mail. + j3 c" G+ W& K * V7 v9 S! ^8 K$ s* M) B8 ?The resurgence of the loonie and continued degradation of US home prices are spurring more Canadians to invest in property south of the border. But while this may appear an opportune time to snatch up a retirement home or dream vacation property, experts warn that jumping into these major purchases without doing extensive research is a recipe for disaster. . d/ {* S! y8 }7 k* V: u8 q1 K. TThe list of things to consider before buying in the United States is long, ranging from estate taxes to property maintenance to insurance. 1 Y0 F' F' s. ?' m! } ) F+ Y0 w6 \3 \0 R8 i1 L5 i3 f“There are lots of things that most people don’t think about,” says Laura Parsons, a mortgage expert with Bank of Montreal. “I know quite a few people who went into the market in the US without a lot of knowledge about what that means.” 2 [: p7 h/ U/ e: ^First and foremost, experts caution that speculative investments in US real estate continue to be a roll of the dice. - s# V6 n; p) c* p5 v4 R Click here to read for the full details in the Globe and Mail. * k0 l+ U6 w5 z1 `# z( A- W+ [8 v$ q Think Outside the Bun. That’s Taco Bell’s slogan. It’s meant to remind us that fast food doesn’t end with hamburgers. Tacos are pretty tasty in their own right. In the lending world, the closest equivalent to “the bun” is the five-year fixed mortgage. Like hamburgers are to fast food, the five-year fixed is to mortgages. It’s been the most popular term in Canada for years. + r* M. h& w1 E: b+ t Yet, despite its prevalence, qualified borrowers owe it to themselves to think outside the five-year fixed. A little extra risk can sometimes yield a lot more reward. 1 q, q# t1 Z" e7 X: Q; e . ?) e+ L" Y9 t) n  f  C+ L" [% fFixed five-year mortgages are especially popular in uncertain/rising rate markets (like today’s). People who can’t afford rate risk, and those who cannot qualify for shorter terms, often choose a five-year fixed by default. Even individuals with rock-solid financial resources frequently gravitate to five-year terms. Much of the time that’s because they don’t want to over think the safety of a longer-term mortgage. In other cases, it’s because no one has ever shown them how much five-year fixed terms really cost over the long run. 0 B: m( f0 W( n' X7 i+ }Click here to read the full CanadianMortgageTrends.com article. ' A" a' f; ^- @: _8 U) BThe problem with teaching people to be smarter about money is that they learn to ask questions for which there are no ready answers. 2 }" S3 G7 }4 f) b4 ]! @$ { 2 ~6 i5 |0 R* xThat’s why it’s disappointing to see banks, advice firms, investment dealers and mutual fund companies treated solely like part of the solution to the lack of financial literacy in Canada, and not part of the problem as well. ; z1 [, R8 K- E Better disclosure from the financial industry of fees, rates, terms and conditions is an important way to make Canadians savvier about money. And yet, the recommendations that the federal task force on financial literacy made public last Wednesday largely ignored this issue. 5 V! R. R# r. m: h8 iOverall, the task force report has come up with some good suggestions that will help boost our financial IQ in Canada. That fact that it didn’t go further relates to the influence the banking and investment industry has in this country over all matters financial. * O* w: u" c3 I, `4 w, m$ u( TClick here for the full Globe and Mail article. 9 P; B5 @1 b7 ?: D4 S$ M Lender News For more information, contact details for your local lender BDM are available on our Intranet: https://secure.dominionintranet.ca/welcome2/lenders_contacts.php With the announcement of a common share offering, Equity Financial Trust says the new capital will support the anticipated launch of its mortgage and deposit business. 7 K, I/ ~' v: x* k5 W4 y/ j ' H: i" L* R) y  [( n. W7 T! \Equity Financial Holdings Inc expects the offering, which will close on February 25th, to net $10 million and the net proceeds will be used primarily to purchase additional shares of its wholly-owned subsidiary, Equity Financial Trust Company, to enable it to attain a regulatory capital balance of not less than $20 million. " z# F  Z3 @  K! A6 VEquity Financial Trust applied in January 2010 for regulatory approval to become a deposit-taking institution in order to enter the field of residential mortgage lending. If approved, Equity Financial Trust will focus on the 5-10% of the market represented by alternative residential mortgages. The approval process also requires Equity Financial Trust to become a member of the Canada Deposit Insurance Corporation. - K  S( m! M7 y7 D( t; i4 W$ v4 D“With the relatively low level of competition in this segment, the company is confident in its ability to launch and operate a successful mortgage operation,” said Nick Kyprianou, Equity Financial Trust’s President, Mortgage Operations. & ]- w) y0 I* D# e0 r ! l  x2 R4 Z) F; N6 F. w( Z- u5 t 5 u( B% k4 l+ e4 ^8 Q5 ~0 P" |1 @ 5 M* Q* c3 g- n% h3 O" w; X ; k, T# r" ?1 r8 O, o/ j

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