Not buying it? Neither did my grade four teacher, Mrs. Cops.  I still remember her after all these years.  What I remember the most about her is the accuracy she had when throwing chalk at us.  She would be writing on the board and in one fluid motion turn, fire and nail you right in the forehead.  It was uncanny.  That’s why I always tried to sit behind the kid with biggest head in the class.  I was just trying to work the odds.  Speaking of odds, after posting over 104 blogs, without fail, there’s was bound to be a day when I just couldn’t come up with anything.  Maybe it’s the heat wave we’re going through in Toronto, maybe it’s trying to catch up after all the travel or simply a cranial cramp.  I got nothing. 

I wonder what would have happened if I was totally honest with Mrs. Cops?  “My homework?…To be honest Mrs. Cops I didn’t feel like doing it”.  Just got a shiver.

Until next time,

 Cheers.

“Italy and Spain will be left with little choice but to plug its nose, open wide and except the bitter medicine. Both Italy and Spain are too big to fail.”

Canada wasn’t the only nation that celebrated this weekend. The Austerity Bowl, better known as Euro 2012 soccer final was played this weekend. The finals were a nice distraction for those of Spanish and Italian decent – that was before the game started. The final wasn’t much of a game because Spain destroyed the Italians on the field. Soccer purists could marvel at Spain’s dominance and breath taking skills. But if it was an exciting game you were looking for, you would have been better off channel surfing. If you missed it the final score it was Spain 4 Italy 0. Ouch!

Prior to Sunday’s final game you couldn’t help but notice the flags of European countries being proudly displayed by motorists. If it’s like this in Toronto and other Canadian cities can you imagine what it must have been like in Spain and Italy leading up to the game?! These two countries could sure use a distraction. Both countries are in dire straits when it comes to their respective economies. Both Spain and Italy’s have had to look for handouts from their European ruler, Germany and the IMF. The only thing missing for the Italian and Spanish President is a piece of cardboard that reads, can you spare a trillion? Spain’s unemployment rate has now reached a shocking 25%, and they can only envy Italy’s 10.2% unemployment rate. Investors view Italy as being much safer than Spain, but that’s like picking your poison. Home sales in Italy have dropped by 20% in 2012, and they cannot service their $2 trillion debt. That being said home prices have remained steady in Italy, and their banks are not nearly exposed as Spanish banks. But Italy’s irresponsible government spending in the last twenty years has given them very little leverage to negotiate favorable loan terms. Italy and Spain will be left with little choice but to plug its nose, open wide and except the bitter medicine. Both Italy and Spain are too big to fail. They are the 8th and 12th largest economies in the world, their neighbor, Germany, cannot afford to let that happen. Greece? A throw away. The two aforementioned countries? Not a chance. Germany will figure out a solution and Italy and Spain will have to accept the terms; Like maybe having Angela Merkel’s picture on all their currency, including coins.

If the fine people of Italy and Spain derived any kind of pleasure prior to the final, good for them. A distraction doesn’t make the problems go away but being able to put aside everyday problems for a brief moment must have been such a relief for them. I suspect that good number of people in Italy and Spain must be envious of us here in Canada. Sure, we have our issues but when compared to other countries around the world they would gladly trade their problems for ours. How fortunate that those of Italian and Spanish nationality get to live in such great countries like Canada. That applies to individuals of every nationality that lives in Canada. Maybe one day everyone will remember to celebrate Canada during international sporting events; something simple, like displaying the Canadian Flag along with your country of origins flag when driving around the city. No one can use the excuse “I didn’t think of that”. The final was played on Canada Day.

Until next time

Cheers

“My goal since day one was to create a company whose employees would be recognized as being the best in the industry.”

In some ways I find it difficult to believe that we’ve hit the six month mark already.  Yet, on the other hand it feels like a year’s worth activities have taken place in the first six months of 2012.  As an industry we have had to deal with the constant media attacks.  Personally, as CAAMP Chair, regulatory issues and media distortions have been at the forefront for me day in and day out.  Just when you think there might be a reprieve, or at the very least seventy two hours of tranquility, BAM!  Something happens.  It’s been that kind of year.

A sure sign for me that the first six months of the year is now visible in my review mirror is the mid-year Merix Sales Conference.  We just completed our seventh annual conference, and if truth be told I think I get as much out of the conference that our employees do.  I was a tad concerned that fatigue might get in the way of providing the right level of energy for our employees.  Since mid-May I’ve traveled to Australia, Poland and now San Francisco for the Merix Sales Conference.  All wonderful experiences but getting there (wherever there might be) and back is a little draining.   So, I inhaled a little extra high octane coffee and got on with it, and after the first day no artificial stimulants were required to manufacture energy levels.  The Merix employees provided that for me with their level of engagement and appreciation during the sales conference. I always marvel at how prepared our employees are when they come to the conference.  All pre-work is completed and there are no wallflowers.  They want to learn, they want to improve their skill sets and they want to enjoy the experience.  A big thank you to Genworth for participating, and for the educational content they provided.

My goal since day one was to create a company whose employees would be recognized as being the best in the industry.  Setting aside my rose coloured glasses for a moment, bar none the Merix sales team and support staff is a cut above.  I take great pride in their results but even greater pride in the way they conduct themselves professionally.  They will never do anything to embarrass the company. They treat their customers, be it borrowers or brokers, with professional courtesy and respect.  A way for an organization to ingrain that principal is simple; you treat your employees that way.  If you treat your employees with respect, dignity and courtesy, the odds are good they will do the same for their customers.  The purpose of our sales conference is to educate, refocus and get prepared for the second half of the year, and to remember a moment in time.  For the team it was remembering the sessions during the day, the excursion to Alcatraz, taking in the Giants versus Dodgers ball game, visiting wineries in Sonoma, and officially ending the conference with a team dinner in the most exquisite surroundings.  After dinner I walked out of the cave, dinner was actually served in a man-made cave at the winery, to enjoy a cigar.  I stood there by myself and took great pleasure at the sound of laughter coming from the cave.  These people truly like each other, and they all want each other to succeed.  From where I sit that’s an organizational badge of honour.  

On behalf of all of us at Merix, enjoy the summer.

Until next time

Cheers

If you’re in the mortgage industry and you’re not aware of the announcement made by the Ministry of Finance and OSFI last week, welcome back from the other planet you were visiting.  If you’re spaceship was delayed in getting back to mother earth, here’s what you missed.  Mortgages bad, government very wise.  We’re all aware of the changes, amortization period reduced, LTV for refinances was cutback, and GDS and TDS  was adjusted as well.  And if you can afford a home over one million dollars, who cares about you.  All very straightforward and in it of itself not devastating  to the housing and mortgage sector.  But we cannot look at these changes in isolation.  It’s the cumulative effect of all the changes that have taken place in the last three years which gives us reason for pause and be concerned.  

We have every right to be concerned because this industry is our livelihood.  Unlike “elected” political officials and government “employees” this industry is more to us than a theoretical exercise.  As an industry we have a responsibility to support efforts as it relates to the long term viability of the housing sector.  Anyone, with a modicum of common sense, understands the concept of short term pain for long term gain.  However, stakeholders have every right to call out decision makers if there’s concerns that the decisions made today may have unintended consequences.  We also have every right to ask decision makers to articulate, in a clear and cogent fashion, the rationale behind the decisions they made.

When clarity is missing you’re left to your own interpretations and code breaking ability.  From my viewpoint these changes mean that interest rates will remain at historical lows for an extended period of time.  Given what the US Fed said recently, unemployment rate will be higher than 8% and slow growth until Q4 of 2014, interest rates are not going up anytime soon.  The changes also suggest that government is guessing how Canada will fare within the global economic reality.  It was three months ago that Fed’s said no further changes to mortgage rules was necessary.  So what happened in the last ninety days?  Nothing in Canada, but in Europe, the US and China, a whole lot happened. That’s our new reality, Europe, the US and China sneezes, Canada grabs a tissue and wipes its nose.

There’s a risk with every move the government makes.  It’s clear that the government cannot slow down the housing market through monetary policy so they’ll attempt to do so through regulations.  If the government is too “successful”  in slowing down the market  which  leads to job loss and erosion of wealth, well, home owners will look for someone to blame.  It’s one thing for voters to believe that we all fell off the real estate cliff together due to a natural real estate cycle.  It’s altogether different when the home owner can say, “we were pushed off the cliff”.  

Until next time

Cheers

 “Firstline played a major role in the development and growth of the mortgage broker channel.”

I suspect by now you’ve heard the news that  CIBC has decided to wind down it’s broker brand, FirstLine Mortgages. The industry has been rife with rumors about FirstLine’s future for some time now.  CIBC finally had to confirm that FirstLine was in play, for sale.   There was chatter that a sale was imminent and that the FirstLine brand  may survive but in the end it ended up being “the end” for FirstLine.

CIBC made a business decision to wind down FirstLine, and not being privy to the facts it would be inappropriate on my part to say if they were right or wrong to do this.  I will say this, it’s a shame.  Firstline played a major role in the development and growth of the mortgage broker channel.  Many moons ago I worked for CIBC/FirstLine, as the Area Franchise Manager, Western Canada, for Mortgage Centre Canada. I thought about about some of the people I worked with back then, and the others who at one time worked for FirstLine.  Many of our industry leaders today were at one time employed by Firstline. To me this is a mark of an organization that prided themselves on hiring the best people, for many of these people went on to lead other organizations.  FirstLine always had a reputation for being the best.  They set the standard for all others to follow.  As a competitor, on more than one occasion, I would curse their name.  I did so out of begrudging respect.  I always wanted to beat them but not this way.

In time FirstLine will fade from our memory.  But before that happens I think we should reflect on the importance of FirstLine, and the contribution this brand made to our industry.  No one should take delight in this announcement.  As a former customer and a present day competitor, I want to thank FirstLine for their historical relevance and for the contribution they made towards legitimizing our industry.

Until next time,

Cheers.