You’ve heard it all before, Europe bad, China slowing and US crawling along.  With respect to Canada’s economy, the BOC is projecting a 2.1 percent growth this year, 2.3 percent next year a 2.4 per cent in 2014.

As a surprise to absolutely no one the Bank of Canada left the benchmark interest rate at 1% for the 25^th consecutive month.  Furthermore, BOC’s economic outlook for the next few years remains unchanged.  In other words not much has changed since the last announcement from the Bank of Canada.  Maybe there should only be announcement when there’s actually something to announce.  Given the repetitiveness of the announcements everyone is looking at language subtly for an indication that something might be different.  There was a twist or something new in this announcement in that the central bank will consider the state of household finances before increasing the target rate.

That’s interesting because the BOC expressed, yet again, their concern it has over household debt.  So if Canadians do not curb their insatiable appetite for debt (let’s be clear the debt refers to mortgages) the BOC may increase rates to curtail the said behaviour.  Is this simply a threat, and why now?  I think it’s rather apparent that market has slowed since the last changes to the mortgage rules in July, so was another shot across the bow necessary?  The answer appears to be yes.  The BOC also made it very clear that no cut to interest rates were being considered at this time.  There are things in life that don’t have to be said, and now “changes in BOC benchmark interest rates” falls into that category.

The BOC’s forecast for the Canadian and global economy is fairly consistent with their last statement.  You’ve heard it all before, Europe bad, China slowing and US crawling along.  With respect to Canada’s economy, the BOC is projecting a 2.1 percent growth this year, 2.3 percent next year a 2.4 per cent in 2014.  In other words no one should be planning a parade over the growth of our economy.  The BOC did indicate that “over time, some modest withdrawal of monetary policy stimulus will likely be required, consistent with achieving the 2 per cent inflation target.”  What monetary policy stimulus might be withdrawn?  It’s a cliffhanger, not as big as “who shot JR?” but a cliffhanger nevertheless (Those under 30 years of age, Google who’s JR Ewing).

The BOC announcement reminds me of what baseball legend Jogi Berra once said, “it’s like déjà vu all over again”.  A blog that I posted not long ago, Bank of Canada Still Locked With the US Fed, I opined that if you want to know what’s going to happen with our rates you don’t have to look any further than what the US Fed is doing. 

“The reverberations of QE3 will be felt here in Canada.  Bernanke has stated that the Fed is committed to leaving its target interest rate close to zero until 2015.  A few short months ago the prediction for a rate increase was 2014.  Clearly the Fed believes interest rates are too high in the US to encourage investment and mortgage borrowing.  I am not sure how enamored the Bank of Canada is with this decision.  Up until now the Bank of Canada has been in lock step with the US Fed.  Will they deviate from that?  I highly doubt it.  So, an overnight lending rate increase may have been pushed out for another 12 months in Canada.  That’s good news for consumers, especially for borrowers renewing their mortgages over the next 24 months.  The not so good news is that if you’re a first time home buyer, don’t expect the government to reverse the most recent changes to mortgage rules anytime soon”.

God, I hate being right.

Until next time,

Cheers.

“It is to our collective benefit to ensure that the talent pool is deep, and cultivating that talent will enable our industry to flourish and grow.”

Well, sort of.  Last week CAAMP forwarded the attached video to all members, and seeing how I did the narration I thought it would be appropriate to use the video as my blog.  In the event you didn’t get a chance to see the video,  it speaks to one of my initiatives, organic growth for the channel.  This is an issue that we as industry should all be cognizant of.  Succession planning is critical for any organization, and the same principles hold true for an industry.  Many of the past and present leaders of our industry still have time to make significant contributions.  But with each passing day we get closer to passing on the leadership torch.  Who will be the ones to take on that responsibility?  Many of our future leaders are among us now, and some maybe contemplating our industry as a vocation.  Identifying future leaders, and providing them with council and visibility, will assist  our industry through transition.  It is to our collective benefit to ensure that the talent pool is deep, and cultivating that talent will enable our industry to flourish and grow.  Where will the next generations of brokers, lenders and insurers going to come from?  Would it not be to our benefit to have university and college students choose brokering as a career path?  Can we continue to count on people just bumping into our industry and deciding that they’ll give it a go?  Our industry is at a crossroads.  Our market share has flatten, intense competitive factors are at play and we all now face the challenge of strong regulatory headwinds.  Our future leaders will have to be far more sophisticated to deal with these issues than we are today.  Our industry is evolving, and it will be imperative that the leadership skill level evolves at the same pace.

Until next time

Cheers

I’m in Quebec City today to chair my last CAAMP Board meeting. Where has the time gone? I have on more official function to serve, the annual AGM in October, and one ceremonial event, Mortgage Form 2012, before passing on the torch to our Vice-Chair, Daryl Harris.

I had dinner with Daryl last night to discuss association issues. He asked me if chairing my last board meeting was bitter sweet. My answer was, no. It’s time. For this association to grow and and evolve requires fresh ideas. My time chair has been rewarding on so many fronts, but now it’s Daryl’s time to lead the board. I know Daryl will do an outstanding job as chair. My role on the executive next year is that of Past-Chair, and the Past-Chair’s primary role is to stay out of the Chair’s way. There to be called upon for council and advise but the leadership and vision will be in Daryl’s hands come October.

Before I pass the torch on to Daryl, one of the most important events during the calendar year has to take place, CAAMP Board elections. A number of CAAMP Board members are up for re-election and many have stated that their intention is to run again. To those board members who have decided to run again, I wish you all the best. You served our members with distinction, and you made a contribution. For those members who have decided to run, you’re to be commended. Fighting for the right to volunteer your time is truly admirable.

Until next time

Cheers

For many in our industry the ability to maintain margins is becoming increasingly difficult.  There was a time when lenders were the loudest when it came to bemoaning the issue of margin compression.  Now others in the industry have joined the chorus.  Lenders have finally hit the wall and the days of increasing commissions are but a fond memory.  Broker owners have been forced to reduce margins in the name of recruitment and retention.  Mortgage brokers, who for years were sheltered from the margin compression storm, are now willing to forgo a portion of their fees to buy down interest rates in the name of competition.  Everyone in our industry has been forced to adjust and deal with the changing dynamics and demands of the client.  The next wave to hit is for many of our suppliers – realtors.

The real estate industry has done a masterful job protecting their own interest, and they deserve a tip of the hat for their ability to demand and justify their commissions.  It was a great run but change is coming.  The real estate industry will not go quietly into the night, as demonstrated by their recent battle with the Competition Bureau of Canada, but the genie is now out of the bottle and there’s no putting her back.

I came across an article in the Financial Post by Erin Burry, which chronicled the evolution of a new start up in the reduced real estate commission business.  Prior to reading this article I never heard of TheRedPin, a new entrant into the real estate game.  After reading the article I checked out their website and I have to say it was rather slick, limited geographically, but it looked and felt like the way of the future.  I was struck by a quote in the article from TheRedPins founder, Shayan Hamidi.  Here’s what he said, “The real estate industry is built of massive franchises that simply license their brand to thousands of independent agents who run their own individual business.  We only hire professional agents and they are non-commission.  We pay them a salary and a bonus that’s based on customer satisfaction, so their interests are completely aligned with their clients.“  I do not profess to know if Mr. Hamidi’s claims are true, I’ve never used their services before, but I do believe he’s onto something.  Over the past few years there’s been a number of new entrants into the reduced real estate commission space and they all seem to share a commonality, the vendor has to do all the work.  For most people a real estate transaction can be intimidating and even with greater access to the MLS all the work still awaits.  It appears that TheRedPin is taking a different approach, full service with a flat fee.  In my opinion that’s been the missing link.  Vendors want to pay less but still have the work done for them.  That’s no different than most consumers, they want quality and they want it cheaper; a reflection of today’s reality, which applies to the real estate industry.  They can fight it all they want but it’s a battle they’re going to lose.  If it’s not TheRedPin it’s someone else who’s building a business model which will revolutionize the real estate industry, just like it’s happened in every other industry.
Until next time,

Cheers.

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“What makes this award a little sweeter is that the CAAMP Mortgage Forum 2011 beat out two large American conferences.”

I had a new blog all crafted and ready to be posted today but I had to set it aside.  Why?  Because I received some fantastic news on Monday morning that I had to share.  CAAMP Mortgage Forum 2011 was the recipient of  another award over the weekend.  This is now the second award that the CAAMP Mortgage Forum 2011 has received.  The most recent award was from the International Events Society.  The ISES awarded CAAMP the “Best Meeting Conference over $250K”.  What makes this award a little sweeter is that the CAAMP Mortgage Forum 2011 beat out two large American conferences.  The sense of pride and accomplishment has nothing to do with an inferiority complex.  We can do anything as well as they do South of the boarder and given the state of our respective economies we’ve demonstrated that we can do a lot of things better north of the 49^th parallel.  What makes this a little sweeter for me is based solely on the fact that Canada’s Woman soccer team lost to the US woman’s team over the weekend at the London Olympics.  The loss was a direct result of shameful officiating and the referee in charge of the match should never be allowed to officiate a match of such significance again.  It was gut wrenching to watch our gal’s come out on the short end because of an officials ineptitude.  Our Woman’s soccer team have dedicated years of training for this moment, and as far as I’m concerned, they’re true champions.

Okay, I’ll get off on one soap-box to jump on another.  We won, hands down fair and square!  I’m so proud of the staff at CAAMP.  Putting a conference together like ours takes extraordinary effort.  It’s easy to take for granted the work that is required to pull off an event of this magnitude.  The truth is the CAAMP staff has spoiled us a little.  It’s easy to assume that every conference is like ours and that every conference is as cost effective as ours.  As someone who’s attended many conferences outside of Canada, I can honestly say that we’re very fortunate.  From sheer size to quality and cost, we are the best.  And now we have some hardware to prove it.  Take a bow Michael Ellenzweig, Cara Shulman, Alison Cousland, the organizing committee and all the staff at CAAMP for making it happen.  Most importantly, thank you to all the Mortgage Forum sponsors, and those who attended.  Without your collective support the conference doesn’t happen.

Thanks to our sponsors, Mortgage Forum 2012 in Vancouver promises to be bigger and better.  Hopefully I’ll see you in Vancouver from November 25 -27, 2012.

Link to Mortgage Forum 2012 Conference site

 Until next time,

 Cheers.