As I mentioned in my last blog, the purpose of my visit to Mexico last week  was to attend the TMG conference.  I was asked to take part on a lender panel, where I and a number of my esteemed lender colleagues,  would answer questions about our industry.  A question that was put forth to me was, “do I believe that regulators would make further changes to mortgage rules in 2013?”  My crystal ball was a little foggy that morning, it could have been the tequila, so I applied reasoning when answering.  I answered, “no “.  No one can say with absolute certainty what the government may or may not do.  But today’s reality leads me to believe that any further changes to mortgage rules may create unintended consequences, which could result in harming our economy even further.   My view is that of CAAMP’S, the most recent changes to mortgages rules may have over reached.  If the most recent changes to mortgage rules was intended to slow down home sales, then one would have to say mission accomplished.  Due to all the changes to mortgage rules over the last three years all of us are feeling an impact in some form or another.  This is the new norm, and time will tell if regulators went too far this time.  So, I’m less concerned about further changes to mortgage rules in the immediate future than I am about rhetoric.

There’s a good article in the Globe and Mail about what could possibly happen to the Canadian housing market when you cry wolf enough times.  Consumer psyche is a fragile thing.  If people in authority, and those supposedly in the know, say it often enough consumers will deem it to be so.  Good evidence of this came from the most recent Maritz survey on behalf of CAAMP.   Over sixty per cent of the general population believe Canadians have taken on too much debt.  Yet close to seventy per cent of the respondents do not believe it applies to them.  So how did they come to formulate this opinion?  Did they conduct a survey in their neighborhood?  Are they all qualified economists?  They form their opinion based on headlines,  and those that are responsible for fanning the flames.  It’s the rhetoric that I’m most concerned about now.  The mind is a powerful thing, and those in sales know how import their psyche is when it comes to success and failure.  Never would I suggest to ignore the facts as it relates to business.  That’s suicide.  Those of us in the industry can separate facts from hyperbole.  But does the consumer do the same?  Of course not.  They’ll form their opinion on sound bites and snippets of information.  Thus my concern about rhetoric, especially coming from those who have fallen in love with the sound of their own voice.

Here’s the link to the Globe and Mail article, it’s a good read. 

Until next time,

Cheers.

The sports world was a buzz yesterday with the announcement that Brian Burke (President and General Manager of the Toronto Maple Leafs) was told that his services would no longer be required.  As often is the case in these situations; code is used when making the public announcement.   At a press conference yesterday President of Maple Leaf Sports & Entertainment, Tom Ansell said the following “Brian will not have direct authority over hockey operations…We want to thank Brian for accepting his new role and staying on with our organization.“  That new role is place holder for Mr. Burke to give him time to work on his transition.  The fact of the matter is that Mr. Burke was terminated, fired, gassed, punted or any other such term that is used by all of us to describe what REALLY happened.  It doesn’t matter where your name is slotted on an org chart, being terminated is a devastating process.  Being terminated is something employees take personally.  And on termination the employee is being told that the organization is best suited to go forward without them.  How can than not be personal?  Now throw in the fact that it’s all taking place in the public eye, now that’s tough.

It’s easy to say that the public aspect of termination comes with the territory; absolutely, but there is a human element to it.  Regrettably people forget or just don’t care.  I was listening to an all-sports radio station on the way home last night and one caller into the station said, “I was praying for this to happen.”  Really?  With all things going on in the world this is what the idiot caller picked to pray for?  Ignorance aside, you can’t help but wince when someone goes through something like this in the public domain.  I feel for Mr. Burke but there’s a lesson here.  I don’t believe his termination was necessarily performance based; if it was, why now?  I think this decision was based on style versus substance.  It’s also a case of personal principals trumping corporate objectives; therein lays the challenge.  Effective leaders depend on their intuitive skills and internal compass.  But there’s a balance, and the question becomes when do you put your principals aside for the greater good?  Sometimes shareholders, the board or even employees may suggest the path chosen by the leader may not be the right one.  But ultimately the leader will decide if he/she is willing to risk their employment over principal.  As romantic as it may sound that you will never compromise your own principals, there’s the issue of pragmatism.  Is it worth winning the battle only to lose the war?

Termination is never easy.  I struggle with having to do it.  It’s a duty and responsibility that I have, and I will execute it.  But I can assure you that it’s caused me many sleepless nights.  Over the years I’ve come to accept the fact that I will never be able to truly separate the personal from the business when terminating someone.  I know that it is no consolation for the person being terminated but if there ever comes a day where I don’t consider the personal element of a termination…it’s the day I will not be able to look at myself in the mirror.

Until next time,

Cheers.

It plays an important role for many in our society.  I bristle at those who condemn people of faith because “science” can’t prove the existence of what they believe in.  Of course I’m not referring to people who bastardize or prostitute their faith in the name of war or violence.  The people who do this are nothing more than charlatans and con artists, irrespective of religious doctrine.  I have great respect for people who frequent their house of worship, and truly feel better for doing so.  The fact they feel spiritually uplifted is reason to applaud them.  If faith causes people to treat each other with respect, kindness and human decency, then these people should be admired and not mocked.

There’s also another kind of faith, our faith in mankind.  Regrettably our faith in mankind is being tested with far too much regularity.  Our faith was tested, yet again, when evil visited Sandy Hook Elementary School, in Newport Connecticut.  I have no idea how to categorize the actions of the mass murder other than pure evil.  The killing of innocent babies leads me to set aside reasoning or any form of rationale.  Gun laws will be debated, as will mental health treatment, but in my mind clinical terms cannot be used to describe the actions of the cold blooded murderer at Sandy Hook Elementary School.  He possessed a human shell but he was devoid of humanity.

As shocking as the barbaric act was, I’m equally shocked at how compassionate and forgiving people can be.  The father of one the slain babies held a press conference and said that his prayers were with the murderer’s family, for they too are grieving.  This man had not even buried his six year old daughter, and yet his faith in religion and mankind leads him to embrace the murderer’s family in their time of grief.  My reservoir of compassion runs too low to be able to do the same.  What I also can’t do is watch the endless news coverage.  How much heart ache is enough?  CNN posted pictures of all the victims, which included the boys and girls who were slain.  I can’t look at the pictures because when I do I think how they were systematically executed.  The son of b!t$& who murdered these babies had to reload to finish what he had set out to do.  I can’t imagine how the parents of the slain children are dealing with this.

I know the cable news channels have to fill time, and this is news.  But enough is enough.  One of the most simple and moving tributes came from, of all places, Saturday Night Live; for a TV show that has no boundaries they exhibited extraordinary dignity and simplicity.

Until next time,

Godspeed.

For some time now, finding positive news about the mortgage industry and the real estate market in general required a Sherpa Guide and a donkey.  “I think I just heard something positive about mortgages…  OOPS, my bad, it’s just Big Foot.”

It hasn’t been easy but over the past couple of weeks there’s been news which leads me to believe the Four Horsemen of the Apocalypse may not be on the way.

CAAMP’s Annual State of the Residential Mortgage Market in Canada (love those short titles) was released just prior to Mortgage Forum 2012 in Vancouver.  It’s a must read for everyone in the industry.  All the major media outlets have picked up the report and there’s been a significant amount of coverage based on the report.  One aspect of the report that bodes well for the industry, and should give regulators some degree of comfort, is how responsible Canadian borrowers are.  I found it striking that 32% of borrowers either increased their monthly payments or made principal reductions over the past 12 months.  It is estimated that $3.5 billion in additional monthly payments were made, and a further $20 billion in lump sum payments.  Yes, consumers are taking on more debt but they’re looking at paying off their debt sooner.  When stories are written about consumer debt levels, a word or two should be dedicated to how responsible Canadians are in attempting to eliminate their debt.

Here’s another indication that consumers maybe be smarter than the press give them credit for.  Over the past 12 months there’s been a high level of ARM conversions to 5 year fixed terms, and the product of choice today is 5 year fixed. Maybe, just maybe consumers are smart enough to know that now is not the time to gamble.  They’re looking at five year terms and saying the rate is competitive and it’s worth the peace of mind for the next five years.

As far as I’m concerned, the only stat that matters to our industry is the unemployment rate.  Everything else, where prime is going etc., is secondary.  Our industry, our entire economy will rise and fall with employment numbers.  It’s simple, if borrowers are working and they have access to cheap money, like they do now and will have for the next few years, there’s less reason to dump a property.  A home owner may not get the price they’re looking for but because the home is affordable there is less reason to discount the price.

If a home owner loses their job a completely different set of circumstances arise.  That’s why there’s reason for optimism over the most recent employment numbers.  According to Stat’s Canada, 59 thousand new jobs were created in November. On a year over year basis 294 thousand new jobs have been created, and hours worked have also increased.  These numbers are critical, not only to our industry but to our economy. Anytime we see a reduction in the employment rate it’s a reason for a high five or fist bump.  So turn around and give your work mate a fist bump because our unemployment rate has been reduced to 7.2%.

There’s more good news that will be readily available when the full Maritz survey becomes public in January, another must read.  But even if we only take into account the data available today there’s reason for optimism, and lessons to be learned.  For instance, consumers do not require regulators to legislate responsibility. Consumers are miles ahead on that one.

Until next time,

Cheers.

 For many Olympic athletes it’s not about the money, it’s about chasing the dream, representing a country and standing on the podium.

Maybe it’s just me but I really could care less when the NHL lockout comes to an end.  I think both sides make a good case why their position is the right one but if the NHL was to cancel the entire season it would have zero impact on my life.  I used to be a sports junkie, and I do enjoy sporting events. But the love of  the game for it’s purity has long since passed for me.  The naivete that the owners and players should do what’s best for the game is best left for those who refuse to believe that professional sport is business, big business.

I can’t think of a bigger business than the business of the Olympics. Multiple billion of dollars in revenues, along with envelopes full cash being passed under tables.  That just screams sporting innocence doesn’t it? In spite of the Olympic machine you can’t help but marvel at the athletes who participate, setting aside NHL and NBA pros.  For many Olympic athletes it’s not about the money, it’s about chasing the dream, representing a country and standing on the podium.  Thanks to an industry colleague, Brian Nason, I was reminded that within the business of sports there can be purity for the love of the sport.  I would like to introduce you to Larisa Yurkiw.  Frankly, I never heard of Larisa until Brian reached out to me to assist in his efforts to support Larisa.  According to Brian,  Larisa is good people, who comes from a good family.  I don’t know Larisa, I’ve never met her but I can say this, she’s got guts and she has the heart of a champion. All she wants is another shot at the Olympics, and a chance to represent Canada.  You have an opportunity to give her a hand up to the podium.  Please have a look at the video,  if for no other reason than to remind yourself that the purity of sports still exists.

Until next time,

Cheers.