To The Pointwith Boris Bozic
Commentary, Opinions, Thoughts and Discussion on Current Events, Politics and The Mortgage Industry

5 Comments Shaping the Narrative

Article written by Boris Bozic on the 12 Jan 2012 in Business

credit card debtThe art of public relations is just that, art.  There’s a real skill set to PR work, and sometimes the messaging is so subtle that you’re not aware that the spin machine is in full force.  Over the holidays I read a number of articles about our homes being overvalued, too much debt, and the ever popular too much mortgage debt.  The cynic in me wonders if there’s genuine concern by the authors of these reports or is this a Machiavellian tactic.

It would be foolish and naïve for us not to worry about consumer debt.  Besides the obvious, a professional responsibility, overall consumer debt can impact our business significantly.  Delinquency, defaults and foreclosures serves no one, with the exception of collection agencies and lawyers.  A stable and affordable market is our nirvana, and anything that might threaten our utopia we have to be aware of, and be proactive about it.  A long term outlook in this regard may cause some grief in the short term.  But if we want to prosper going forward we have to think beyond tomorrow.

What’s equally important is ensuring that the discussion around overall consumer debt relates to ALL debt.  It’s been fashionable, and headline getting, to portray mortgage debt as the great big bad boogie man.  Yes, mortgage debt makes up a good portion of the consumers overall debt.  It’s also, in the vast majority of cases, good debt.  It provides shelter and in time a return on your investment.  If the home is viewed as a long term investment, the owner of the home will win.  That’s been historically demonstrated.  What hasn’t been demonstrated is that credit card debt is good debt.  Yet that’s an extraordinarily profitable business line for the credit card issuers, with very little regulations.  Credit is available today for anyone who wants it.  Consumers are being enticed in every possible way.  It’s all about more.  There’s no argument that the consumer bares the responsibility to use their available credit in a responsible way.  But with temptation and ease bad judgment usually follows.

The point is if there’s going to be a debate about  overall consumer debt, then let’s make it just that.  Just prior to Christmas, CAAMP engaged it’s Chief Economist, Will Dunning, to write an Op Ed about credit card debt.  It was published in the Globe and Mail on Thursday, December 29th.  The article was well written, and Will raised a number of important issues.  To read the article click on the link below.  Moreover, if we’re going to have this debate then a balanced viewpoint is required.

Credit Card Roulette – The Globe & Mail – Will Dunning

Until next time.



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Dawn Shantz @Twitter ID Website Reply

Thanks Boris for keeping this message alive. Maybe with persistance we can get this message through to the policy makers in this country.

Great post Boris- I could not agree more! Will Dunning’s G+M article was well done and this kind of communication is something that CAAMP should be doing more of. Hopefully other industry participants will join in getting the message out that needs to be heard by the politicians and the public. Mortgage professionals can and should also be much more proactive providing financial education to consumers. What better way is there to further differentiate yourself from the banks?

Mark Kerzner @Twitter ID Website Reply

Boris, thanks again for the thoughtful perspective.

I wrote a little blog last month ( talking about the confusion that exists among all the headlines – with the ones around household debt being at the top of the list. Canadians (and policy-makers) need to keep perspective. Not all debt is bad debt and sometimes access to cheaper debt (often the case with secured debt) allows consumers to consolidate higher interest debt. Speaking with a mortgage broker is a great starting point for any consumers with questions regarding their debt.

Wayne Campbell @Twitter ID Website Reply

Bang on!

Wayne Campbell
Invis – Prince George

Dustan Woodhouse @#dustanwoodhouse Website Reply

Boris, Thank You!

Indeed this is a conversation that needs to remain open. How the Goverment can make a case for reducing maximum amortisations on low interest debt secured against an appreciating asset, yet allow effective amortisations as high as 157 years on unsecured consumer debt backed only by memories of a vacation, excessive clothing purchases, or several meals out boggles the mind.

Compounded by the fact that there is no significant income qualification required for most types depreicating or non-asset purchases (i.e. furniture, appliance, & car loans).

Keep on pushing the topic.

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