Three annoying things that banks do to customers are about to become history.
Following up on commitments made in the past two budgets, the federal government has announced measures that will stop banks from mailing unsolicited credit card convenience cheques to customers, and that will reduce the holding period on newly deposited cheques. The banks will also have to stop being so secretive about the penalties clients must pay when they want to get out of a mortgage early.
These measures represent some good work by a government that has been under pressure lately as a result of the robo-call affair. Strangely, the measures were announced on a Sunday and, therefore, didn’t get the initial attention they deserve.
The sharp decline we’ve seen in mortgage rates over the past few years has prompted many people to think about breaking their mortgages in order to lock in lower borrowing costs. A mortgage penalty must generally be paid in this situation, but it’s exceedingly difficult to find out how much it is and how it’s calculated.
Click here for mortgage prepayment bank requirement details from Ottawa.
Despite ongoing concerns about household debt, home ownership is becoming more affordable in Canada, not less, says new research by RBC.
RBC’s latest report says home affordability actually improved in the final months of 2011 for the second consecutive quarter, thanks to softening house prices and income gains.
Owning a home in Canada now takes up as much of pre-tax income as it did a year ago, even though household indebtedness has continued to rise and is now at a record high 153% of disposable income.
Ownership even became more affordable in the ultra-expensive Vancouver market, although it remains the dearest place in Canada to own a home.
Sluggish domestic growth and uncertainty about the global economy will likely keep the Bank of Canada from raising rates until the second quarter of 2013, according to a Reuters survey.
The Reuters poll of 42 economists and strategists released last week showed the median forecast for the next interest rate hike was pushed back by three months from the first quarter of 2013 projected in a January poll.
The results were similar to a February 17th poll of Canadian primary dealers, which forecast the next rate hike would happen in the third quarter of 2013.
The Bank of Canada’s target for the overnight rate has been at 1% since 2010.
A BC real estate agent was fined $258,000 when he unilaterally cancelled a contract to sell a home and resold it to a second buyer for a higher amount.
Hwang Soo Lee of Surrey, BC, ended up having to compensate his first buyer for behaviour described by a judge as “high-handed and outrageous.” The lesson is that sellers who think they can change their mind and get out of a deal, should a better offer arise, must beware of the consequences.
In mid-January 2009, Lee signed a deal to sell his home in Surrey for $740,000. He needed to sell the house in a hurry, so the price was $26,000 less than he owed on the mortgage and the commission payable to the buyer’s agent.
But before that deal closed, Lee sold the home to a second buyer for $779,000, which would have covered all his costs. In an effort to get out of the first deal, he refused to let the buyers, Kundan and Puja Khullar, into the home to do a home inspection. Then he tried to change the terms of the deal by increasing the price, without any right to do so.
Greece saw investors’ participation in a massive debt relief deal rise today, bringing the country closer to avoiding a default that would plunge it into financial chaos and re-ignite the European debt crisis.
About 24 hours before the deadline for acceptances, investors owning around half of Greece’s privately held debt had committed publicly to the bond swap, in which they will accept losses to avoid facing even bigger ones in the event of an outright default by Athens.
For the deal to work – and for Greece to secure a related €130 billion ($171 billion US) bailout – Greece needs 90% of investors to sign up. But a voluntary participation rate of around 70% could be enough to force most holdouts to go along.
Greece’s financial troubles are the centre of Europe’s two-year crisis, so successfully lightening its debt load is crucial to the overall plan of keeping the 17-nation euro currency afloat. The euro and stock markets rose today as confidence over the bond swap grew.
Click here for full details in the Globe and Mail.