Sunday, March 26, 2017

Reaching for the Top - Another sign we are in the mania phase

Meet Larry and Adam Rachlin.

They're mortgage brokers in Ontario, and our newest poster children for the Canadian Housing Bubble.

Larry has Bachelor of Arts degree in Political Science & Speech Communication (honours) and is a 27 year veteran in mortgage financing and brokerage. He has an even longer tenure in the financial services industry including secured and unsecured funding, debt consolidation as well as personal & business tax preparation.

Adam is Seneca College graduate with a Diploma in Financial Services Underwriting. He's been in financial services for over 21 years including mortgage & loan underwriting, personal & business income tax preparation as well as commercial leasing & property management.

Together they run Mortgages Unlimited, a mortgage brokerage whose slogan is "We don't say 'NO', we offer an alternative."

Larry recently posted a youtube video (you can see it here) promoting their services and here is the opening pre-amble:
Every day someone calls and tells me they have an urgent cash crisis. 
They tell me nobody is able to help them, they're ready to give up. 
They say I'm their last hope. And I tell him this: I don't care if you have bad credit. I don't care if you can't prove income. I don't care if you have tax arrears or if you haven't filed an income tax return. Or even have mortgage arrears. I don't even care if you won't be able to make any payments for a while. 
All I require is that you have a good story and own a home that has some reasonable equity. If you have that, I'll get you the money you need. And I'll let you have up to 12 months with no monthly payments. Got a good story if so call me Larry Rachlin.
Your house is an ATM machine and all you need is a "good story".

Speaking of good stories, did you ever hear the one about the US housing crisis of 2008 and HELOC's?


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Wednesday, March 22, 2017

Toronto's Condo King declares Canadian economy solely dependent on foreign buyers

Meet Brad Lamb. Faithful readers will recognize Lamb as Toronto's version of the Rainforest's Bob Rennie - aka 'the Condo King' of their respective cities.

If you haven't been keeping up, the centre of the universe has been awash in Lotusland Asian money overflow since the imposition of Krusty's 15% foreign buyers tax last September. Panic buying has gripped Toronto and suddenly there are calls from all corners for the Big Smoke to take BC style action and implement their own foreign buyers tax.

Of course all of this is curious since, just like Vancouver pre-tax, the local real estate industry has been adamant that Toronto house prices are not fuelled by foreign funds. In fact as recently as Jan 31, 2017 the Toronto Star newspaper noted the following denial by the Toronto Real Estate Board:
Don’t blame overseas investors for the high price of housing in the Toronto area, says the city’s real estate board. 
The Toronto Real Estate Board (TREB) released new research Tuesday showing only 4.9 per cent of the 113,133 residential real estate transactions in the Toronto region last year involved foreign buyers.
Now you would think that if only 4.9% of the market is impacted by foreign money, any discussion of a foreign buyers tax would be inconsequential to the industry.

But as political momentum gathers to implement just such a tax, the Condo King of Toronto comes out with a claim that utterly shreds the 4.9% narrative.

Today BNN reported that Lamb is publicly warning that "taxing foreign home buyers in the skyrocketing Toronto real estate market could trigger a national recession."
In an email sent to unit owners in his 17 buildings late Tuesday, Brad Lamb railed against the long-debated idea of a 15 per cent surcharge on buyers of Toronto properties who are not Canadian citizens or permanent residents; similar to the one imposed in Vancouver in August 2016. Boasting of having “eaten, drank, and slept the Toronto real estate marketplace for 30 years,” the CEO of Lamb Developments argues such a tax would be “an egregious error in policy.” 
“In Toronto… it could also precipitate a Canada-wide recession,” Lamb wrote near the start of his roughly 1,300-word note. 
“Kill the new condo market, kill the Ontario economy. Kill the Ontario economy and Canada falls too,” Lamb wrote.
The Toronto Real Estate Industry now joins their Vancouver counter parts in trying to move heaven and earth to politically intervene in public policy dealing with the massive malinvestment created by the worldwide excess credit epidemic.

In the process we get another glimpse at how the Real Estate Board's claims about the impact of foreign money is completely detached from what their members on the ground know all too well.


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