The pace of (technological) change is so fast now that it is considered to be of revolutionary proportion.

Much of what we have learned in our lives is about to become obsolete. In fact, much of it already has.

For example, our schools teach us to get an education, get a good job, get promoted and earn a higher salary, all without teaching us about financial literacy. Then we are told to save part of our pay, to put that into a savings account with interest rates less than inflation (which gets taxed…lol), to invest in RRSP’s, RESP’s etc., supposedly to grow into a retirement nest egg.

The problem is with fees and taxes, unless one invests in the stock market (risky) or real estate (less risky) it is impossible to become financially secure, let alone wealthy.

Some believe that the ‘system’ is designed to keep most people poor, or at least working hard their entire lives just to keep their heads above water. We are seeing this more and more and more.

From a technological standpoint, the advent of (ro) bots and artificial intelligence are about to disrupt our lives in every way possible in the years ahead. Driverless cars? How can this be possible? What is certain however is that bots will result in the elimination of tens of thousands of jobs as we know them, even entire industries.

More and more our lives are affected by the so-called ‘internet of things’. Everything is gravitating towards the Internet. The validity of getting a college or university degree (to get ahead) is being challenged like never before. In short, disruption of the status quo will become the norm.

Much of this coming change will force humans to think and act differently than we do today. However, it is within the internet that lies promise of a more prosperous future for many, in fact for everyone that embraces it because it is ‘levelling the playing field’ like never before.

The truth is that we are seeing more and more people becoming wealthy online. Starting an online business takes less effort, less capital and less time than a conventional grass roots start up. Money, lots of money is being made faster than ever before.

The internet also gives us the opportunity to educate and become informed in a more savvy, meaningful way, and the key is for us to forget what we’ve been taught about making money in the past. We need to learn how to educate ourselves, create our own jobs and make our own money moving forward. Growth in recent years in self employment has accelerated dramatically and will only continue to rise.

Undeniably, personal financial security and wealth creation is largely dependent upon how we view and understand today’s big bank culture and business practices, much of which has been chronicled in the media in a less than favourable light; such that it appears things have gotten ‘out of hand’ and in need pullback. Trust and transparency used to be the pillars of our financial system. Unfortunately, this is no longer the case. As politicians, governments and school systems have become outdated and less trusted, so have our banks.

Yet we continue to deposit our paychecks giving the banks free money with which to profit. The banks take fees in an instant while holding our cheque deposits for days (more free money) even when we have more than sufficient funds to clear the cheque. Lending practices including mortgages have in fact become predatory with (potentially harmful) terms and features that are not disclosed to the borrower, which is not only unfair, but not right. Bank mortgage penalties have been systematically manipulated such that when a mortgage is paid out prior to maturity, the lesser of 3 month’s interest somehow no longer applies. Rather the greater of, or the IRD interest rate adjustment factor does, costing Canadians often (tens of) thousands more. Many agree that today’s reality is that the banks’ quest for ever increasing profit at the expense of and on the backs of unsuspecting Canadians is unconscionable.

Just as Fintech (new financial technologies) have begun to revolutionize banking and financial services, we need to revolutionize the way we think about and treat our money. Those in the know pay no annual fees on credit cards, use online bank institutions who charge less or no fees, pay more interest, and they are more likely to obtain the services of a trusted and transparent independent mortgage (broker) professional.

We are reminded from time to time that many people still believe that to use our services means having to pay a fee. This could not be further from the truth since our services are free for arranging prime mortgages (OAC) on approved credit where we are paid a finder’s fee from the lender. Only more difficult, more time consuming mortgages and private mortgages require a fee from the borrower since that is the only way we can be compensated for our services.

Most importantly, we always put you the customer (your interests) first and foremost. We are all about helping you find the most advantageous, cost effective financing possible and our professional advice is invaluable.

If you have relied on the banks until now, perhaps it’s time to become more protective of your money and investigate the mortgage broker option.

Our industry has grown significantly, particularly over the past decade, and there is a growing awareness of the validity and value of our services. But we still have a long way to go before we are thought of as (mainstream) the better option when it comes to mortgage financing.

For your next mortgage need, be part of the revolution and call us first, or at the very least, get a second opinion and experience the positive difference.

The Financial Post reported that TD Bank stock has been downgraded after CBC News reported allegations of aggressive sales tactics and admissions of law-breaking by bank employees last week.

Admissions of high pressure sales tactics and unethical practices including “breaking the law with practices such as increasing lines of credit, overdraft protection and credit card limits without customers’ knowledge.”

If anyone thinks this issue is with one bank only, then they are either kidding themselves or have something to hide. We believe there is little doubt that all our big banks have similar practices. Will they be sued? This remains to be seen suffice to say that this could become “A Wells Fargo moment”.

Wells Fargo was fined US $185 Million on Sept 8, 2016 by U.S. regulators when ‘abusive’ sales practices by the bank were uncovered. That bank was fined for opening hundreds of thousands of retail bank accounts without client approval according to the Associated Press.

One Canadian analyst suggested that the reported revelations could inflict damage that may have a “material impact on the (TD) bank’s reputation” and earnings and valuation.

Is this just the tip of the proverbial iceberg? Only time will tell but this isn’t going away anytime soon and will likely be news for some time. Are other banks involved in the same type of practices? Is there more to the story, meaning other practices not yet uncovered? When will it be deemed more than just unethical? When is it deemed that they’ve crossed the line and broken the law? Canadians deserve to have such questions answered.

On the mortgage front, we have being informing our readership about the perils of bank Collateral Mortgages now for over five years. For example this type of mortgage product gives the banks the ability to secure previously unsecured debt instruments, thus giving them the power to ultimately force the sale of a property without any missed mortgage payments whatsoever, charge higher interest ‘at will’ etc. While the mortgage product itself is legal, they don’t disclose to consumers the general nature of the new product. Isn’t the act of omission, by not mentioning to the customer that they are signing a Collateral Mortgage, in and of itself illegal?

As your trusted mortgage advisors, we suggest that the lack of disclosure practised by our big banks, which has become commonplace, should perhaps be investigated and challenged to establish whether it is in fact breaking the law. If so, then the potential damages could become astronomical.

The value the mortgage brokerage industry brings consumers has never been more clear. We also keep the banks competitive. Without us, Canadians would be paying much more.

Please understand that obtaining a mortgage is much more than about ‘Rate’. It’s about the ‘Terms’ of the mortgage and the ‘Trust’ you have in the supplier. Call us to discuss.

There may finally some progress being made with the Federal Government after Dominion Lending Centre’s Founder and CEO, Gary Mauris, presented to the Standing Committee on Finance in Ottawa on February 8th about the imbalance in the Government’s new mortgage rules.

In October 2016, the Federal Government made changes that are limiting and threatening to average Canadians and their ability to buy housing and access equity from their homes… Especially those of that live outside of major city centers.

How is purchase power affected? Let’s look at Barry & Louise’s situation. Combined, they earn $65,000/year. He works at a local factory and she at a grocery store. They have great beacon scores, a $400 car loan payment and minimal credit card debt. They have $16,500 saved for a down payment on their first home.

Before the changes, Barry & Louise would have been able afford to purchase a $330,000 home with 5% down, qualifying for a mortgage of $313,500, paying 2.89%.

Now, because they are forced to qualify under the “stress test” at a rate of 4.64%, they can only qualify for a $253,500 mortgage, lowering their affordability to $270,000. That’s a $60,000 difference in purchasing power. They are priced out of the market.

The bottom line as we see it, is this. There was no logical, ethical reason for the Federal Government to implement such rigid regulations so swiftly. The mortgage default rate in Canada is less than 1/3 of 1% … that’s only 0.003%!!! Mortgages are not the issue. High interest rate, easily accessible consumer debt products are.

Through the Mortgage Broker Channel, monoline lenders now account for 38% of all mortgage funding in Canada. This is great for Canadians! Competition is always beneficial for consumers. Look at airlines and cell phone companies. Lack of choice = monopoly, which means more expense and less flexibility for consumers. The same thing goes for mortgages.

The only mortgage institutions that don’t benefit from more choice are the big chartered banks. Banks make multi-billion dollars in profit, year over year. They are in the business of cross-selling multiple high interest rate products and charging massive penalties for early mortgage pre-payments.

The moment a bank has a new mortgage client, they start enticing them with great offers on lines of credit, credit cards etc. They have the power to lock you in and change the rates on the fly, making it difficult to go elsewhere. They often don’t approve clients for refinances for debt consolidation as they make their money on your consumer debt.
The government consulted with a few banks before making these rash changes. They did not consult with the broker channel or monoline lenders. There is something unjust about this and it favours the banks. We support choice, competition and what’s best for Canadians. Contact us and see how we can help protect you.