Spoken Opinion -


by Becky Ellis

Canadian Real Estate – Recent Survey Data

Mathematically, three out of four homes in the United States are worth just what the mortgage is paid on them. In November of 2011, an estimated one out of every four hundred and ninety two homes went into the foreclosure procedure. Analyzers cannot determine where the U.S. will bottom out in real estate for the fourth consecutive year.

This is not the situation, however, in Canada. Little attention is paid to Canada’s mortgage finance system by the U.S.. Historically, none of the banks in Canada failed when the Great Depression hit, and this trend continues during what the Usa refers to as the Great Recession. According to published reports, there are fewer than one percent of mortgages in Canada that are delinquent.

How did Canada come out on top with real estate?

A vice president from the Canadian Bankers Association in Ottawa answered this question by simply stating they give loans to individuals capable to pay them back. It sounds simple, according to one of the CEOs, but it’s the way the business works.

Relatively speaking, real estate agents in Canada are not quite as busy contemplating the differences in people. There’s an estimated 34.3 million residents living in Canada, and the people of the USA is more than 307 million. Canada ranks ninth in the world’s economy, and also the USA ranks number one.

The World Economic Forum ranked Canadian banks best in the entire world in the last several years. However, it’s noted they’re a small group of lenders. There are 71 which have federal regulators, in comparison to the U.S. lenders having more than 8,000. The Federal Deposit Insurance Corporation provides insurance to U.S. lenders.

Considering how conservative Canada is, however, there is a good deal to learn out of their regulatory process. The standards required are more complex, as well as the set-asides in groundwork for economic slowdowns or alternative losses are bigger.

There are also no big write-offs on taxes for Canadian homebuyers. All they receive is a capital gains tax exemption. The fact that there are really no mortgage interest deductions lets Canadian homeowners to fast pay down their mortgages. There is also no such business model similar to Freddie Mac or Fannie Mae in Canada.

Another difference between Canada and the USA when it comes to mortgages is, if a Canadian loses their house, they’re still required to pay off the mortgage debt. This really is called a non-recourse loan, plus it prevents Canadian homeowners from walking away from their real estate loan debt. Read additional information about Eddie Yan on this website. Real estate agents reveal all of this information to potential homebuyers before the procedure commences. These Canadian lessons prove useful to the States.

Mortgage-interest deductions issued in the U.S. likely will not come up in the coming year when Congress begins debate on reducing the deficit. It is been advocated that the USA scale back significantly on mortgage-interest deductions in order to lessen debt and create more revenue used to reduce deficits.

The National Commission on Fiscal Responsibility and Reform made this recommendation, but it was not put on the table. Yet, there are a large number of defenders of the real estate mortgage tax write-off stating it helps drive homeownership in america.