Why Canadian banks are doing it right

[Vic]

Originally posted by: Phokus

Originally posted by: Vic

Originally posted by: sandorski
[The reasons have already been pointed out, but there are basically 2:

1) No speculation/flipping
2) No Sub-Prime Loans

1) wrong
2) wrong

Where'd your banks get their money to lend again, BTW?...

edit: granted, you guys didn't have the cash-out refi frenzy we had here.

What? You don't knwo what you're talking about, Canada had a small fraction of subprime loans compared to the US. Stop posting.

I've forgotten more about mortgage lending than you'll learn about it in your entire lifetime. Subprime defines the borrower, not the source of funds or even the terms of the loan.

 

[StageLeft]

It was generaly harder for a canadian to get a loan than an American. I still remember in 2007 a guy talking with incredulity about how those in the US were able to get loans worth 100% of their house and I was like "Hi there!". He was not a moron, so that's when I realized there was a huge difference between the US and Canada (yes, a single half-drunk guy's statement ).

 

[chess9]

Originally posted by: Vic

Originally posted by: sandorski

Originally posted by: Vic

Originally posted by: sandorski
[The reasons have already been pointed out, but there are basically 2:

1) No speculation/flipping
2) No Sub-Prime Loans

1) wrong
2) wrong

Where'd your banks get their money to lend again, BTW?...

edit: granted, you guys didn't have the cash-out refi frenzy we had here.

Central Bank/Profits/Deposits

Not sure why you say my points are "wrong", those are the 2 things that sets the US Bubble apart.

So what sets the British housing bubble apart? (and it's as bad or worse than what's going on in California or Florida).

And sorry, but there was speculation, and a govt loan to subprime borrowers is still a subprime loan. Technically speaking, there still is subprime lending in the US still, they're just FHA only now.

From what I've seen and read about England, they've had a lot re-financing, and had a housing bubble up til about 2005 with home prices just going crazy. A home adjacent to where I stay near the Village of Rusper went in 2005 for 980,000 pounds, with a horse barn and 4 acres of pasture. The contractor who bought it put another 200,000 pounds into it for his thoroubred horses. He's now bankrupt! The home is listed locally for 700,000 pounds. Another friend in Horsham had to sell his home at a loss, and was happy to do it as that was in 2008 when prices hadn't fallen to rock bottom. Now that house is worth about 20% less than when he sold it.

England has a lot of sub-prime loans out as well. Northern Rock did a lot of that.

-Robert

 

[StageLeft]

Originally posted by: chess9
From what I've seen and read about England, they've had a lot re-financing, and had a housing bubble up til about 2005 with home prices just going crazy. A home adjacent to where I stay near the Village of Rusper went in 2005 for 980,000 pounds, with a horse barn and 4 acres of pasture. The contractor who bought it put another 200,000 pounds into it for his thoroubred horses. He's now bankrupt! The home is listed locally for 700,000 pounds. Another friend in Horsham had to sell his home at a loss, and was happy to do it as that was in 2008 when prices hadn't fallen to rock bottom. Now that house is worth about 20% less than when he sold it.

England has a lot of sub-prime loans out as well. Northern Rock did a lot of that.

-Robert

When I was in England in 2005 I literally did not understand how people could make it work. I was thinking that based on my earning power (a touch better than average but nothing to write home about in any way) if I wanted to start a life there my family would be stuck to a two bedroom house basically indefinitely. Everything was obscenely expensive. I never understood how it was possible and now we know that ultimately it wasn't. Housing prices to income were far more insane than even in the US.