In these two sets of numbers lie Canada's housing bubble.

There's an article in today's Vancouver Sun by Barbara Yaffe.

Titled: The high cost of home ownership: Canadian homeowners carried nearly $1.2 trillion in mortgage debt last year, the article shares a stunning statistic:

The Canadian Association of Accredited Mortgage Professionals estimates, homeowners in this country — of whom 60 per cent carry mortgages — owed nearly $1.2 trillion in mortgage debt last year, up from $664 billion in 2008. In other words, national mortgage debt has nearly doubled in just four years.

Combine that with the fact that CMHC has gone from $100 Billion in insured mortgages in 2006 to almost $600 Billion today and you know where Canadians got the money to bid the price of real estate to astronomical levels.

Debt fuelled our bubble, plain and simple.

Throw in emergency level interest rates to facilitate the low monthly payments on massive mortgage amounts and you get a real sense of why the bubble has continued for so long.

But make no mistake.  These are not real estate prices which reflect intrinsic value.  The real estate bubble is born of excess credit.  Massive, excess credit.

This is a scenario that has been repeated over and over the past 500 years.

• Tipper and See-Saw Time (1621)
• Tulip mania (top 1637)
• South Sea Company (1720)
• Mississippi Company (1720)
• Railway Mania (1840s)
• Encilhamento ("Mounting") (1886–1892)
• Florida speculative building bubble (1926)
• Roaring Twenties stock-market bubble (c. 1922–1929)
• Poseidon bubble (1970)
• Japanese asset price bubble (1980s)
  • 1997 Asian Financial Crisis (1997)
• The Dot-com bubble (1995–2000)

A boom caused by excess credit will always bust. Ours will be no different.

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Richmond real estate agent's response to the latest wave of optimism?

One of the biggest frustrations from some market watchers has been the failure of the market to 'crash' in spectacular fashion.

But if you have followed this blog for any length of time you have watched the progression.

First it was the outlining areas of B.C. Then it was Vancouver Island.

All last year we charted the periphery of the Lower Mainland, particularly Whistler. And this year it started here with the Fraser Valley and Richmond.

And now, within the Lower Mainland, it is the less desirable properties getting hit the hardest.

Those in the real estate industry tell you there will be no 'crash', just a slight correction - a 'flat market'.  Most significantly, prices will not come down.

But if there is no danger of that happening... why is CAAMP going to Ottawa to lobby for a return to loose mortgage regulations?

The answer is simple... for the bubble to grow there has to be access to easy credit.  Without it, the market will continue to wither.

(And for those who are frustrated at the slow pace of the decline, tomorrow we will hi-light how the pace of that decline has been more significant than most realize)

Real estate agents know the reality of this situation.  And once again, it is Richmond agent James Wong who succinctly summarizes the situation.

As Wong notes, the decline in listings is not a sign the market is strengthening... it is expected at this time of year:

The improvement in the Months-of-inventory (MOI) in Richmond from 12 months to 10 months was due to the 10% reduction in total listings. Many sellers either pulled their listings off the market or allowed their homes expired. The decline in listings is expected to continue for December. Seasonally this is not the time for home sellers to list their homes for sale.

 Sales are still abysmal and any sales that occur, happened because sellers cut their prices:

Sales in Richmond for November at 207 homes were slightly lower than the previously month sales of 225 units. Price discounting continued as motivated sellers tried to attract buyers. 

Will sales improve in the new year?

Many people in the real estate industry are hopeful that home sales will improve after January, 2013. An up-stick in sales can be expected in spring next year, but the overall market sentiment will likely remain subdued.

And why will it be subdued?

There is a marked difference for 2013 and 2012 as the number of active listings at the beginning of 2012 was around 1,655. The supply in 2013 is expected to take off from a higher base at around 1,950 homes by January 01, 2013. Many more new listings are expected to be added to the market after the new year.

What will the flood of listings do to the market?

The large number of listings in Richmond will result in more sellers lowering their prices to sell their homes. Current market sentiment is not expected to change much. Buying activities are likely to remain subdued. Many homes in Richmond are expected to sell below their city assessment values.

More price erosion can be expected as many home buyers are expected to stay on the sideline. Majority of these buyers know that it is to their advantage to wait for the market to continue its correction. Buyers when making offers, typically test sellers’ motivation by making low ball offers.

Why all the low ball offers?

The market situation for Richmond detached homes remained depressed. There are currently 540 homes for sale at prices above $1,000,000. With average past 3 months sale around 33 homes, the MOI is at 16.36 months.

This is a slight improvement from 17.88 months in October, partly due to expiry and 10 homes reducing their prices to below $1,000,000. There are 293 homes over $1,500,000 in Richmond. At an average sale pace of 12 homes the past 3 months, this translates into 24.42 months of supply.

2013 will be another difficult year for Richmond.

Wong summarizes exactly what the problem is... a problem CAAMP is also worried about:

The absence of home buyers, dampened market sentiment, and tightened lending rules are expected to continue into 2013.

The current MOI though better than the past 2 months, will likely be reversed when more new listings hit the market the next few weeks.

There are no signs of the Government changing or relaxing the current lending directives to Canadian Banks. Richmond’s market for 2013 is expected to have persistently high number of homes for sale and below average buying interest.

All of which is adding up to create the perfect storm in 2013... a reality real estate insiders are privately very afraid of.

Speaking of dealing with the current market dynamics, have you seen real estate agent Owen Bigland's reality check for seller's when it comes to listing you home for sale in today's market?

(video posted 2 days ago):

"Let's talk about pricing. One of the biggest mistakes people make, or seller's make, is they price the home according to their needs as opposed to what the market is dictating.

In other words they say we paid $800,000 for the home 3 years ago, we need to net $800,000 today.

Well, unfortunately, the market doesn't work that way. A home is priced based on the current fundamentals."

And the current fundamentals say you need to lower your expectations. What a paradigm shift from only 12 months ago.

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Thurs Post #1: The assault on Ottawa begins: CAAMP launches winter lobbying

You can imagine how hard it is for real estate agents right now as they deal with clients who have their home on the market.

Sellers have expectations skewed by a housing boom driven by almost 35 years of of unprecedented debt expansion, a boom which has gone parabolic in the last decade.

Declining prices?  Bite your tongue.

You can just imagine the conversations as agents patiently explain to perplexed sellers that November sales figures are 30.3% below the 10 year average. You just know those sellers aren't receptive to suggestions they should 'adjust their expectations' or 'price their home for the current market.'

So what to do?

Pull the listing, of course.

Massive inventory will be blamed (triggered by those repressive mortgage changes) and the industry associations are almost promoting the factors now.

It's leading to headings like yesterday's in the Province newspaper:Vancouver homeowners pulling properties off the market rather than settle for lower prices.

The free-falling Vancouver housing market shows no signs of reversing its slide with the latest figures showing November sales 30.3% below the 10-year average for the month.

The Real Estate Board of Greater Vancouver now says consumers have begun pulling their homes off the market rather than settle for a lower prices in what is still the country’s most expensive market to buy a home... Home sellers appear more inclined to remove their properties from the market today rather than lower prices to sell their properties.

Toss in supporting articles by industry 'experts' about how prices simply 'won't be coming down' and you can see the framework for yet another cunning media campaign to mould the mindset of homebuyers and particularly sellers.

"Everyone else is pulling their listing and not accepting less... why wouldn't you if you believe it's 'worth this much?"

But the clock is ticking on that strategy.  Come Spring those removed listings will come flooding back with a vengence with sellers anxiously expecting the market to have recovered.

But as we outlined yesterday, there is no government rescue plan being implemented which will facilitate a Spring recovery.

Yet.

Which is why CAAMP (the Canadian Association of Accredited Mortgage Professionals) is wheeling into action :

CAAMP leadership will be talking to bureaucrats and politicians in Ottawa early next week in yet another effort to raise the red flag on tighter mortgage and lending regimes.

“Our Chair, I and our chief economist will have a series of meetings in Ottawa on Wednesday with both public servants and politicians to discuss the findings of our most recent research,” Jim Murphy, president and CEO of CAAMP said. “We will obviously discuss the government’s recent changes along with the need to maintain a healthy housing and mortgage industry in Canada.” 

And what is that 'recent research'?

Last month, CAAMP released its Annual State of the Residential Mortgage Market in Canada report.

They produced surveys which indicated that most Canadians are dealing with the largest level of debt in history very well, thank you.

They have been handling their debts and paying down their mortgages “comfortably.”

More significantly the report raised concerns that the mortgage rule revamp implemented by the government has shut out many first time homebuyers from the market and caused a drop in housing market activity.

[Which is exactly what they were supposed to do]

(There) is a sentiment shared by many brokers who argue that the mortgage rule changes were ill-timed since the hot housing market was already moving towards a price correction.

Mortgage professionals also warned of a possible snowball effect wherein a reduction in activity at the entry level will create difficulty for those who wish to sell their homes and move up in the market, creating a slowdown in upper segments of the housing market as well.

“Our concern today is the number of growing first-time buyers who are now unable to get a mortgage. We worry that this is having a dampening effect on what was already a cooling market, we hope policymakers will give some thought to addressing the needs of this key sector.”

CAAMP is desperate to lobby government to make changes before the Spring market rolls around.  And the organization no doubt feels their chances may have improved with the looming departure of Bank of Canada Governor Mark Carney.

I suspect next week's efforts will be the first of a Winter long offensive.

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Sat Post #2: The battle for public support: the real estate industry vs the Federal Government

Two days ago we talked about the latest offensive by CAAMP against the changes made this year by the Federal Government to the rules around mortgages.

One of the first impacts can be seen here in the Vancouver Sun as reporter Shelley Fralic regurgitates the CAAMP news release and asks: "What, exactly, is wrong with a 35-year mortgage?: Government as babysitter is pricing many, especially first-time buyers, out of the market"

Besides the excellent response from the Huffington Post we profiled in the post two days ago, we simply refer back to the excellent article the Post came out with back in the first week of November: "Canada Housing Slump: Flaherty's New Mortgage Rules A Scapegoat For A Much Bigger Problem"

This summer, Prime Minister Stephen Harper and Finance Minister Jim Flaherty took a regulatory hammer to Canada’s housing markets, causing condo sales to plummet in Toronto, and sinking Vancouver house prices by jaw-dropping margins.

Or so the finance and real estate industries would have you believe.

To hear Canada’s banks, industry groups and even the Conference Board tell it, the slowdown that descended on many Canadian housing markets over the summer is the fault of the strict new mortgage rules Flaherty put into place this past June.

"To the surprise of no one, following the introduction of the most recent rule changes, sales activity ratcheted down," said Gregory Klump, chief economist at the Canadian Real Estate Association, in announcing a 15.1-per-cent year-on-year decline in home sales for September.

The Toronto Real Estate Board chimed in: “Some households have put their home purchase plans on hold in response to the higher cost of home ownership brought about by the recent changes to mortgage lending guidelines.”

The industry has good reason to maintain this narrative. For one, it makes it seem like falling sales volumes and prices are all "part of the plan," nothing to worry about. (Not true.) And it also deflects uncomfortable questions about the role of real estate developers, agents, banks and industry groups in creating the inflated house prices Canada has seen in recent years.

The media are happy to go along with it, because it offers a neat and simple explanation for why Canada's decade-long housing boom is coming to a halt. The only problem is, this isn’t what’s happening.

Hmmm... someone get these guys a blog, they'd fit right in with us.

First the background: Flaherty tightened the rules for mortgages for the fourth time in as many years this past June, reducing the maximum length of a mortgage insured by the CMHC to 25 years from 30, effectively making that the maximum amortization period for most Canadians who take out mortgages. He also reduced the maximum amount you can borrow against the value of your house to 80 per cent from 85 per cent. These changes, like the previous ones, were aimed at ensuring that Canada's rising home prices weren't due to irresponsible lending and borrowing.

The be sure, this will have a cooling effect on the housing market. There are prospective home buyers who just can’t afford the extra $140 per month, on average, that the shorter mortgage periods represent. Some homebuyers have just been priced out of the market. But can that alone explain the 70-per-cent drop in condo sales in Toronto, or the nine-per-cent drop in house prices in Vancouver?

Highly unlikely.

TD Bank forecast the impact of the mortgage rule changes on the housing market and found it would amount to a three per cent decrease in house prices - far less than what Vancouver, for one, has already seen. Not to mention, we’ve had three previous rounds of mortgage rule tightening since 2008, and none of them tipped the market downward. Clearly, something else is happening here.

The industry would argue that the last changes were the straw that broke the camel's back and the cumulative effect is at fault, but do go on:

The housing market’s fundamentals aren’t looking good. Standing in the way is that pesky basic law of economics — supply and demand. In some Canadian markets, those two things have become entirely detached from one another.

As the CEOs of both BMO and RBC have attested, Canada’s real estate market is simply overbuilt -- particularly in Toronto, where condo construction has grown so thoroughly out of hand that there are now twice as many high-rises going up there as there are in New York City.

And more, much more, construction is being planned.

In Vancouver, where residential construction has been somewhat more restrained than in Toronto in recent years, the supply-demand disconnect is reflected in prices, which have flown so high that Vancouver has nearly as many houses listed for sale over $1 million as sell in the entire United States in a month. The city's housing costs ranked as the second least affordable in the world, after Hong Kong, in a recent survey.

Across the country, house prices are now 35 per cent higher relative to income than has been the long-term trend through history, Bank of Canada Governor Mark Carney noted earlier this year.

Simply put, prices are too high. Canadians aren't earning enough to justify these price levels. And closely linked to this is the elephant in the room: debt.

And of course this is what the battle is all about: the real estate industry wants the government to endlessly feed the ponzi with cheap, easy credit backstopped by the taxpayer's of Canada. As we have noted numerous times, the amount CMHC insures has gone from under $100 Billion in 2006 to almost $600 Billion today.  Right there is the source of the housing bubble in Canada.

It has never been cheaper to take on debt in Canada. With a global financial crisis busting out all around, the Bank of Canada dropped its base interest rate to one per cent in January, 2009, and it has stayed at or below that level for nearly four years now.

Some economists argue this is an excessively expansionary policy that has overheated Canada’s housing market. (Plenty of others would say that, given the damage taking place in other parts of the economy, those low rates were necessary.)

All this has had an alarming effect on household balance sheets. StatsCan recently revised its measurement of household debt to make it more in line with international norms, and found the debt-to-income ratio hovering at a record 163.4 per cent, higher than the level the U.S. had when its housing market began a years-long decline half a decade ago.

That offers more of a clue to why Canada’s housing market has peaked and appears to be on a downward trajectory. It’s basic mathematics writ small in the finances of households across the country — there’s just no more breathing room to borrow more money.

Add to that the phenomenon of foreign investors bailing on condos, at least in Toronto, and you have a pretty perfect storm for a housing slowdown.

And, if anything, the adjustments to the mortgage rules were too little, too late.

What should happen in a market like this is a re-balancing — or a correction, if you prefer. Whatever the terminology, house prices have to come down relative to incomes. Then and only then can they return to healthy, stable levels of growth.

Our finance minister agrees with this.

“It’s better to have some softening in the market rather than have sudden movement,” Flaherty said this summer, talking about the new mortgage rules.

But can “softening” be achieved at this point? Or has the housing market become so out of balance that there’s simply no way to avoid a hard landing? That, of course, is the big question these days.

Interestingly, as CAAMP argues how the mortgage changes are harming the economy - and by extension jobs - there is an article out in the United States that is taking the data and showing us: "How Too Much Household Debt Buried The Job Market."

One of the most interesting side shows is in watching the frustration that is now clearly being felt by the real estate industry when it comes to their growing inability to manage their message in the media.

For the past 10 years they have had free reign to massage public perception.

They still have some pull, as the Fralic column in the Vancouver Sun demonstrates.  But they are being overwhelmed on the whole.

More on this tomorrow.

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The battle over the mortgage changes heats up

Wikipedia defines the OFSI (the Office of the Superintendent of Financial Institutions) as an independent agency of the Government of Canada reporting to the Minister of Finance created "to contribute to public confidence in the Canadian financial system".

Seems with all the backlash about recent changes to the regulations surrounding the mortgage industry, the OFSI feels it is in need of some public confidence themselves.

Yesterday the OFSI set up a twitter account.  Their 2nd tweet?

OSFI has authorized CMHC to commence web-based social-networking campaign to booster public image.

Which seems odd because while the OFSI joined twitter yesterday, CMHC has been on twitter since July 2011.  Mind you the sum total of their twitter contribution so far has been only 2 tweets:

The backlash in question, in case you have missed it, is coming from the mortgage broker industry, as the Huffington Post noted a few days ago.

The press coverage comes as CAAMP (the Canadian Association of Accredited Mortgage Professionals)  issued a report declaring that “the changes to mortgage insurance criteria are unnecessarily jeopardizing the health of Canada’s housing markets and the broader economy.”

As the Huffington Post notes:

Ever since Canada’s housing market began swooning earlier this year, mortgage brokers, bankers and real estate agents have been busy telling us that the federal government is to blame, thanks to its tightening of mortgage lending rules this past June.

Never mind the evidence that the most overheated markets were already cooling by the time the mortgage rules were announced; never mind the rather extreme “coincidence” that our housing market began to slide just as we reached household debt levels similar to those seen in the U.S. and U.K. when their housing markets crashed. No; the real problem, according to the industry, is Finance Minister Jim Flaherty’s reduction of government-insured mortgage amortization periods from 30 years to 25.

The CAAMP report presents data to suggest the new rules have priced some percentage of prospective homebuyers out of the market.

According to CAAMP's estimates, if the new mortgage rules had been in place in 2010, 11 per cent of the high-ratio mortgages approved that year wouldn’t have been. A high-ratio mortgage is one where the buyer has put down less than 20% as a down payment.

CAAMP argues that this will impact employment as the construction sector struggles.

And that's the heart of the offensive.  CAAMP argues real estate has become such a significant part of the economy and as real estate goes, so goes the economy... so, federal government, don't stick with the changes you have made to mortgages.

But as the Huffington Post notes:

[CAAMP's] warning about the economic dangers of an overheated housing market could just as easily be an argument for Flaherty’s mortgage rule changes as they are an argument against them. If the economy stands to be devastated by a housing slowdown, then the best thing to do is to stop the overheating as soon as possible — or face an ever larger crash. This is what the mortgage rule changes were meant to accomplish.

And the effect of the mortgage rule changes is really no more than what one would expect to see with a fairly small hike in interest rates.

Right now, a 25-year mortgage at three per cent interest on a $350,000 house (the average price in Canada right now) would cost you $1,656 per month, according to TD Bank’s rate calculator. If the rate went up to four per cent, the payment would jump nearly $200 per month, to $1,847.

According to estimates, the new mortgage rules would jump housing payments on average by $140, due to the shorter repayment periods. In other words, the new mortgage rules have less of an impact on affordability than a one-per-cent interest rate hike.

This is what the real estate industry is freaking out about and blaming Flaherty for — the equivalent of a small hike in interest rates.

The hypocrisy in CAAMP's arguments are gleefully exploited by the Post:

And yet Dunning’s report asserts that “Canadian mortgage borrowers and lenders have been prudent and there is very substantial room to absorb higher interest rates.”

Really? Really?! Our household debt burden is now 163 per cent of household income, a record high and a higher level, slightly, than what the U.S. and U.K. saw before their housing market collapsed.

So how is it that Canadians have room for more debt, when the same debt levels in the U.S. and Britain proved to be unsustainable?

The truth is, Canadians don’t have room for more debt. And the contradictory argument that they can handle higher interest rates but not tougher mortgage rules is proof that the blame-the-mortgage-rules argument doesn’t hold water.

Our housing market isn’t experiencing what Dunning calls a “policy-induced housing slowdown.” It’s experiencing fatigue from excessively high debt levels, and a long run-up in prices, combined with general weakness in the job market and unimpressive wage gains.

Yet it seems the industry will continue to maintain that the blame for the housing market slowdown lies not with the irrational exuberance of a housing bubble, but with the entirely rational efforts to fix it.

You can be sure this battle is only getting started. 

Which is why the OFSI is taking to social media as part of it's counter-offensive.

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Tuesday Post #2: Can I get a purchase order # for all the cheese we need?

If you've every worked in a large bureaucratic company, you are familiar with purchase orders.  You need them for everything.

Glancing at the world press today, I wonder if I could get a purchase order for all the cheese we need to procure?

I mean... let's face it... what good is all that whine without lots of cheese?

Tonight we start in China.  As the Vancouver Sun notes, home prices are in decline in a record number of Chinese cities.  The decline is no accident. China is engineering a much needed deflation of their housing bubble.

"Prices fell in a record 46 of 70 cities tracked by the government in April from a year earlier as officials pledged to keep restrictions on property purchases that have sapped buyer demand... The Housing Ministry said China will steadfastly continue curbs on the housing market and won’t flip-flop on its policies. This followed a pledge by the State Council, or Cabinet, last month to stick with existing property controls implemented over the past two years, where the government tightened down payments and mortgages, and imposed restrictions on the number of homes families can buy.

“The general price trend as a result of developers cutting prices and regulatory environment is continuing this month,” Chris Brooke, chief executive officer for Greater China at CBRE Group Inc., said in a Bloomberg Television interview from Beijing. “The objective is to remove the speculative element from the market."

China has been struggling with an all-too-familiar dilemma... how to prick the speculative housing bubble while helping the general economy.  Thus the China government has been implementing (and maintaining) its housing curbs while the central bank lowers the amount of cash that banks must set aside as reserves, a move the PBOC has done three times since November to boost liquidity and spur loan growth.

Of course the government's moves have been met with wide spread howls of complaint.

And attempts by some of the locals to circumvent the federal government's moves have been quashed. Wuhu in Anhui province and Foshan in the south in the past six months have tried to lift local property curbs. Both locales had their efforts halted within a week.

"Prices haven’t fallen low enough for the government to relax the property policies," said Zhang Zhiwei, Hong Kong-based chief China economist at Nomura Holdings Inc.

Whining about government attempts to deflate the housing bubble aren't restricted to China.

On this side of the Pacific, the Government of Canada is also trying to find a way to deflate the Canadian real estate bubble while still assisting lending for the broader economy.

One of the Fed's key strategies in doing so appears to be shaping up in the new regulations being proposed by the Office of the Superintendent of Financial Institutions (OSFI).

Among the host of proposed changes to the regulations governing Canadian banks are rules that would require that banks recheck areas such as employment status, current income and the current value of the home for mortgage renewals and refinancings.

“This would be a significant, significant change,” Jim Murphy, the head of the Canadian Association of Accredited Mortgage Professionals (CAAMP).

So concerned is CAAMP about the impact of the changes on it's self interest that the professional association has launched it's own organized media whine campaign.

The OSFI unveiled the proposed new rules in March and requested submissions from the real estate industry as part of the government process of consulting with state holders. A significant number of submissions from trade associations, lenders, insurers and the brokers as well as private citizens have been received.

OSFI is still reviewing them and hopes to release final rules by the end of June, along with a summary of the submissions and the reasons for its decisions.

But CAAMP can see the nuances of the political back room process at work. The OFSI proposed changes were released after the Financial Stability Board, a global financial oversight body, called on all regulators to ensure mortgage lenders were adhering to certain underwriting principles.

And with Ottawa seeking to prevent a runup in Canadian house prices from leading to a crash, it's clear you can see the hand of the Conservative government behind the proposed OFSI guidelines which go a bit further.

CAAMP has clearly launched it's counter offensive to try and stir up the general public in an attempt to influence pressure on the government to back off.

With the June deadline rapidly approaching, expect the level of whining to increase exponentially.

Cheese anyone?

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Meanwhile... on the local real estate front

If you read my little blog you know that I (and my colleagues) believe that the Village on the Edge of the Rainforest is in for the mother of all real estate collapses.

How big of a collapse?

We stand by our prediction of a minimum drop of 40%-50% in the value of single family houses from the highs, and likely much more.

Strengthening that conviction are reports like this one from the Canadian Association of Accredited Mortgage Professionals (CAAMP).

CAAMP simulated the impact of mortgages hitting 5.25% – a rate which isn't even 2% higher than the current average of fixed-rate loans outstanding - and the impact will result in about 500,000 mortgage holders who will be in trouble.

When you add in the 375,000 who are already having difficulties, you have a total of about a million mortgage holders who very shortly be falling on difficult times with their payments.

How significant is that?

About 9.3 million families own houses in this country and 5.5 million have mortgages. So if rates rise less than 2%, 2 out of every 10 mortgage holders will be under significant 'financial stress'.

That's 20%.

The US housing market dominoes started falling on far less than this.

Ramping up the heat on this percolating mess is the fact that approximately 2 million mortgage holders carry variable rate mortgages. Economists are predicting that those prime variable mortgages will be going (in very short order) from the current 2.25% to 5%.

That's a jump of almost 3%, higher that the forecast increase of less that 2% which could cause so many 'problems'.

'Financial Stress' are going to be the buzz words of the coming next two years. Followed very quickly by the companion catch phrases of 'default', 'bankruptcy' and 'foreclosure'.

In the United States these conditions were a recipe for real estate implosion.

Thank God it's different here.

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