Why Mortgage Rates Are Rising

Rising Mortgage Rates

Canadian mortgage rates increased once more this month, but this time around, it wasn’t caused by new data on the economy or a rise in bond yields. Rather, one major lender increased rates, which subsequently led to everyone else following suit—a cycle many mortgage brokers have seen as of late.
Over the last few months, these instances of “Simon Says” have lowered average 5-year variable-rate discounts from prime minus 0.60 percent to prime minus 0.40 percent, and increased average 5-year fixed rates from 2.59 percent to 2.79 percent.
Such sweeping changes to mortgage rates in the country are hard to predict because they often start out as arbitrary decisions made by one lender, signaling everyone else to follow suit. What’s more, in most cases of these changes, lenders that followed have vastly different reasons for increasing rates as leaders did.

Reasons for the Recent Increases to National Mortgage Rates

1. Funding costs of lenders have slowly been increasing, and will continue to do so for much later. The gaps between government debate and the funding mechanisms used by lenders to create capital for mortgages have slowly but surely widened, with investors marking these kinds of credit as being riskier in nature.
However, this general increase and the spreads between residential-mortgage funding mechanisms pale in comparison to the figures seen on other credit types.

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2. Lenders have a limit on how much they can securitize into the Canada Mortgage Bond (CMB) program. When lenders reach this cap, they have no choice but to transition to other capital sources, which are often more expensive. Of course, some lenders will simply increase rates to compensate for higher funding costs, but some will opt to take these costs for a limited time in order to be competitive against other lenders who don’t necessarily meet their caps at the same time.
However, if competing lenders raise their rates, others will be quick to follow suit. It should also be noted that not all lenders have a viable replace to the CMB, which leads to them using rate spikes to pull themselves out of the competition until such a time that their CMB cap is reset.

3. 2015 has been an extremely busy year for lenders, with many finding themselves short of staff. Challenges to lender capacity are made tougher due to a shortage of experienced underwriters. And with backlogs continuing to accumulate, many lenders have resorted to raising rates in order to slow volume, buying their underwriters time to process applications and paperwork. Mortgage brokers must have been busy!

4. Price/rate wars are at their fiercest during the spring market, when competition is at its peak. As the year comes to a close, and when lenders have achieved their targets—as most have this year—they are more likely to recoup the funding sacrifices made during the spring market push.
Mortgage rates increased recently, but it’s not because of bond yield movements or markets reacting to economic data. Instead, the rate hikes were caused by a combination of the factors above. It’s important to note this distinction, as these kinds of rate increases are usually NOT a sign of a much wider uptrend in mortgage rates.

It doesn’t look like this trend is going away soon. Make sure to keep yourself posted and visit our site for more information. You may also reach out to us for any needed information.



Current World Events

All over the world, there is always something happening, whether it is newsworthy or not. When you read the newspaper or look through the news on the internet, there is no doubt that you are going to see a news article about someone being shot by a police officer, a storm about to pummel somewhere, ISIS issues, hostage rescues, drug raids and more. The world is a gigantic place and no matter where you go, you are going to hear about something major that has just made national news.

Hurricane Patricia

As you are probably well aware, there is a hurricane currently slamming Mexico. Hurricane Patricia is the strongest storm ever recorded at sea. This hurricane has approached the Pacific coast of Mexico and is predicted that it would become one of the most dangerous storms in history. Thousands of people were evacuated before the category5 storm had a chance to touch down on Friday evening near Cuixmala. The winds reached a stunning 165-mph which uprooted trees and blew over power lines like stick houses. The rains that came along with it caused major mudslides and many other problems. There have been no reports of fatalities or major damage, for now. Since it was in a mountainous area, there was very little damage other than the mudslides, trees and powerlines.

43 Killed in France Bus Crash

A head on collision between a bus and a flatbed truck in southern France is responsible for the death of 43 people. This has been named the worst road accident in more than 30 years. Most of the people on the charter bus were elderly who were on a day trip to the Basque region. There were 41 fatalities on the bus itself and in the flatbed truck, the driver and his 3-year-old son perished. The crash happened at 7:30 a.m. on the D17 highway in Puisseguin on a wooded portion of the road. The bus also caught fire and because there was so much gas in the tank, the fire was very large. The victims of this tragedy are still being identified.

Drug Raid in “Super Tunnel”

The sophistication of drug smugglers on the U.S.-Mexico border is so great that there was railway discovered when the feds raided the eight football field sized drug running tunnel. This tunnel featured a railway, electricity, lighting, and metal beams to prevent cave-ins. There were at least 12 tons of marijuana confiscated which had a street value of $6 million dollars and there were 22 people arrested in San Diego and Tijuana. This is one of the largest tunnels discovered in recent years. The investigation was 6 months long which began in May and had an undercover agent involved who helped with transporting buckets filled with dirt from the tunnel warehouse. This agent then offered to transport and store drugs for those who were running the operation. This is the 10th large-scale drug smuggling tunnel that has been discovered in the San Diego area since 2006.

The stories above are just a few of the headlines that are streaming across our computer screen and newspapers. It is amazing how much is going on in the world and how many people have no idea it is happening.



Addiction To Technology Growing Health Concern

Technology addiction is a huge issue with society today. Most of the time, if you are walking through the mall or even on the street, most people are looking at their phones or talking on them. They use them to take pictures, record video, play games and more. Not only are people obsessed with their phones, but they seem to also be obsessed with their computers. There isn’t anything you can’t do or buy on the internet to certain extremes. So, what does this say about the health of those who constantly have their eyes fixated on their phones or computers? It is a compulsion for some people. Once they hear their phone go off, they absolutely need to check the message, they cannot ignore it. People who stare at a screen for most of their day end up with headaches and those who have the technology addiction often have insomnia because they are constantly thinking about their phones and they just can’t shut their brain off. With all of the brain activity and multitasking that comes along with technology, it is possible for the brain to overheat like a car engine. The brain needs periods of rest in order to function properly.

So, how do we rest our brains properly and ensure they we are getting the proper sleep to rejuvenate?  The first step, as hard as it sounds, is to put down the electronics and forget they exist. When you are looking at the light from the screen of your phone or computer, your brain things that you should stay awake. If you turn off all of your technology, you will be able to sleep better. Once you put down that phone or computer, find yourself a comfortable pillow and mattress. If you align your spine with the right mattress you will have a much better night of sleep than if you are sleeping on an old spring mattress. If you are worried about your phone, write down your worries. Need to send an email but it can wait? Write it down and do it in the morning. Do not drink alcohol or have anything with sugar before bed. Alcohol puts you to sleep, yes, but you won’t sleep for very long, 4 hours at most. Once you wake up, you probably won’t be able to fall back to sleep. One more thing you can do to ensure you wake up refreshed is to wake up to natural sunlight. This will reset your circadian rhythm in your body and this will make sure you are tired at the right time of day. Also, take a vacation away from your electronics like I did when I went to Banff as that can be a great way to disconnect from electronics and reconnect with yourself.

Technology addiction is dangerous. Checking your phone while driving has killed and injured more people than you could imagine. People who cannot stand to have their phone anywhere else other than in their hand have a serious problem and need to learn to set it down once in a while. It can be a very dangerous habit, not only for yourself, but also the people around you.



What the future holds for print and online journalism

There is no doubt that print journalism is on the decline – lots of print journalists, myself included, shifted to other, more dynamic, forms of the trade – web journalism being the foremost among them. There are still lots of traditionalists who shun people that leave print in favour of other forms of media, but at the end of the day, the bills need to be paid, and daily expenses, such as grocery, appliance repair and luxuries, have to be met.

Let’s explore how the decline began, why online journalism gained so much traction and what the future holds for journalists.

The steady decline of print journalism started out in the late 1980s, well before online journalism had become a real thing. This decline become more pronounced as the digital era dawned, with digital journalism gaining popularity and the public gaining access to the Internet. It cannot be said that the fall of the former and the rise of the latter are directly correlated – print journalism had been on the decline well before online journalism had become common.

It is probably due to the fact that print journalism had been failing at delivering quality content for quite some time. Aside from this, the readily available cable television and 24 hour news channels made the printed product far less interesting, the front pages printed what most people had seen on last night’s news. This problem was accentuated by online journalism – with users being able to easily check the news at any time of the day, thereby losing their morning paper or even news viewing habit. Print media hasn’t changed from what it used to be 4 decades ago, it hasn’t adapted properly to the changing circumstances, and is in desperate need of an overhaul which isn’t happening.

People like the online form of journalism because it allows them to create and consume stories through new and varied languages and features. Interactivity and multimedia are two important features of this medium, and with the social tools thrown in, it becomes a different ballgame entirely. The near unlimited access to online media is equally important, with users being able to watch/listen/read the news from thousands of outlets across the globe. Geography is no longer the limit – it is only a search parameter.

As a colleague of mine shrewdly observed, the whole journalism industry is presently going through an identity crisis. With the exception of a handful of media groups, most do not have a well-defined strategy to deal with the new demands presented by the digital era. The last few years have seen journalists being fired left, right and centre, while the demand for skilled people in newsrooms increased. This hasn’t just affected online production, but also print. Good journalism has also gone out the window in some cases, with the journalists being told by their bosses to produce stories with glitz rather than content. In other words, quality has declined in both online and print journalism. It can be said then, that both facets of journalism face the same problem, essentially a lack of proper strategies and long-term planning on part of media group boards, and also the ‘us vs. them’ (i.e. print vs. online) mentality, which has become extremely common these days.



A Couple of Places That Taught Me Valuable Lessons:

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I would like, today, to share memories from a couple of places I visited during the days when I was starting out as a corporate journalist. I like to think that I visited these places to get inspiration about my future as an RJ with a journalism degree and indeed, I did get inspired that it was time the public was made aware of the truth of corporations and how they operated:

Silicon Valley

I visited Silicon Valley because it was, in my opinion, the place where the future of big business lay – eight years later, I’m glad I made that trip, because today, computers, smartphones and ‘apps’ have become the biggest money spinners and the most dominant corporate companies are Apple, Intel, Google, Facebook and so on. My original plan had to been to get interviews from a couple of entrepreneurs. I was supposed to meet them both at Buck’s of Woodside a restaurant famed as a focal point for the sort of people I intended to meet and interestingly, the place where services such as Tesla and Hotmail were incorporated.

The interviews went great and did raise some interesting points – one of the interviewees told about how he was starting a new software company, he believed that the best way to reach the public was to resort to social media and blogging, and really inform the people about what his service could do for them rather than using billboards and television commercials, which might figure into his marketing campaign later. Tech start-ups should definitely take this advice since it won’t cost them much and they’ll be addressing a global audience given their product/service is something unique. In fact, I’ve frequently quoted his words in my radio shows since then.

While there, I decided to kill some time by visiting a famous landmark since I was something of a tech geek. The HP Garage, the place where Silicon Valley was born, was my intended destination. In terms of inspiration for a business journalist, I could think of no better place than this – a small rental house that produced a dominating tech giant and an inspiring story that led to so many others.

Wall Street

 

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A trip to Wall Street is recommended for all commerce students, and corporate journalists won’t do wrong in visiting it either. The truth is that this place is a hotbed for the most aggressive kind of marketers – stockbrokers. These individuals represent the zenith of classical marketing where company stocks are sold to names written on call lists using flashy jargon and marketing ploys, the customers are identified by the numbers on the list and nothing more. I was the proponent of the notion that each customer should be thought of as a whole informed ‘audience’ and be present with the whole truth regarding a service and Wall Street was the exact opposite of my ideology. However, I still believed that it was a good idea to gain an insight into the flaws of the present corporate system before trying to make an effort to change it, which is why I signed on for a trip to Wall Street with the touring company ‘The Wall Street Experience’.

The tour was thoroughly informative, with the tour guide being a former stockbroker himself; our tour group got to see all the famous landmarks that are representative of corporate America – the Stock Exchange, the Federal Reserve and, of course, Wall Street itself. We were told actual stories about how the whole financial backbone of the US was functioning and, for me, these stories did shed some light on what drives corporations after they have gone public.

I was so impressed by the tour that I signed up for the more intense ‘Financial Crisis’ tour the company offered which was meant for industry professionals! The tour gave detailed information regarding the financial crisis and the factors which contributed to it. The ruthlessness involved in the day to day life of a successful Wall Street Trader was shocking and instructive at the same time. I learned about technical terms such as Credit Default Swap (CDS) and Collateralized Debt Obligation (CDO) that represented financial transactions that brought down entire institutions.

My trip to Wall Street strengthened my resolve to inform the consumers about how best to make a decision regarding the purchase of a product or service. I had seen first-hand how easily so many people were swayed to invest into a company by the honeyed words of stockbrokers and I decided it was time people realized the truth.



My Views About the 2005 CBC vs CMG Issue

The CBC lockout that left close to 5,500 CMG employees unable to work was a turning point in my career as an RJ. Before that, I had believed that state operated establishments were synonymous with job security – but the lockout provided hard proof that politics and ulterior motives can easily damage the credibility of even those institutes which have a history of prestige and reliability. It made me seek other shores and redefined job security for me.

Before I give an account of those eventful days that happened nearly a decade ago, let me provide you with some insight about the CBC:

The CBC (Canadian Broadcasting Corporation), officially stylized as CBC/Radio-Canada, is a Canadian crown corporation (i.e. it is run by the state) that serves as the nation’s television and radio broadcaster. It is divided into two units: CBC which serves the English speaking populace and Ici Radio-Canada which serves the French speaking public, moreover, these names also represent the whole corporation in their respective language.

The CBC is the original broadcast network of Canada (established on 2nd November of 1936), it was there before all the other corporate networks entered the scene. The CBC’s television broadcasts are funded through state money as well as commercials whereas its radio aspect has been ad free since 1974, much like BBC Radio – it only recently added 4 minutes of commercials per hour in a couple of its radio channels to make up for the budget cuts that it has suffered in the recent years.

Now that there has been a mention of budget cuts, and you have some understanding of how the CBC works, I’ll discuss the factors which led to the historic lockout of 2005:

Back in 2005, the CBC, a state run, non-profit organization, like many other services in the public sector, suffered from huge cuts in its budgets under the Liberal government’s policy of financial restraint and privatization. The corporation had already been suffering from similar policies which the previous Conservative government had adopted. In short, the past two decades had not been kind for the CBC as it had to cut the large part of its local as well as regional TV news programs, close down stations and reduce the number of dramas it produced. Its budget, which had been $1.3 billion before 1990, was cut down to $919 million by 2005 – in constant dollars.

There hadn’t been a financial injection to the corporation by the government since the start of the millennium. The Liberals had provided the corporation with annual supplementary allocations that were only sufficient for countering the effects of inflation on the CBC’s budget. These sharp cuts in its funding left the CBC’s management with only one option – to transfer public jobs to contract based jobs, along with which went the employees’ job security. This was reflective of the then Liberal government’s own policies of organizational restructuring – they, too, were transferring state operations to contract based jobs as well as private-public partnerships.

The lockout:

Long story short, the CBC management sought to impose a new business plan in which a large portion of its employees became contract based workers without any job security. Their efforts culminated in a lockout on August 5th which left technicians as well as journalists who worked at the CBC unable to work in their professional capacity. With the exception of the Quebec and New Brunswick, every English language TV, internet and radio broadcast was affected by the lockout. I found myself unable to carry out my daily radio broadcast from CBC Radio 3 and I won’t lie – it was one of the most shocking twists in my career which made me rethink my path.

Not only did the lockout have a direct socioeconomic effect, it also reflected the fact that the institute no longer had the government support it used to have a couple of decades ago. The government was continuously being pressurized by corporate media giants as well as other neo-conservatives to cut the funding of CBC and it seemed that it had started to cave in. Their problem with the corporation was that it did not conform to their media models where the focus was on advertisements and audience shares. The CBC was the lone voice of liberalism and criticism which simply wasn’t tolerable for these conservative media groups. Furthermore, they were also resentful that CBC produced the majority of top rated dramas. The pressure from these sources was such that even the Liberals had to give in and bring down funding for the corporation. They had started to favour the conservative lobby’s viewpoint rather than the standards of aestheticism and intellectualism which were hallmarks of the CBC.

What did we do about it?

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We, the members of the Canadian Media Guild (CMG), weren’t going to take it lying down that the only public broadcasting corporation of Canada had been hijacked by the conservative mentality and that our careers were suddenly mere ‘contracts’. We separated ourselves from the CBC’s management and started our own programming that comprised of local radio broadcasts and internet blogs. Dozens upon dozens of TV and radio personalities began to join our ranks and we took the fight to the CBC’s management.

Interestingly, this effort was what sparked my interest in internet blogging as a form of communication with the public. I realized that the corporate machine couldn’t be challenged on conventional platforms – they were just too strong and well-funded, for instance, the CBC carried out broadcasts throughout the lockout by using material from BBC! The internet would allow me to be free and vocal about my views on anything I wanted and no corporate bigwig would be able to stop my message from reaching to the masses just because it offended them.

I will still say this about the CBC: the corporations will always attempt to take over that which continues to defy them, it is the duty of each and every Canadian citizen to support the CBC and make sure that the government continues to fund it adequately so that incidents such as the lockout can be avoided in the future.



My Radio Career: From News Casting to Corporate Journalism

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Back in my days at the CBC, I was a radio newscaster with a slot on the evening news every day. I wasn’t really concerned about the contents of what I told the public because the illusion of job security imbued by a good pay and a steady going job was sufficient for me. However, after the CBC lockout in 2005, it dawned on me that there was an increasing danger that the news I was telling on my radio show could be influenced by corporate powers who wanted the public to know their own version of the truth which suited their business designs. I had originally graduated as a journalist and I realized now that it was time to return to my roots and seek a source of living which involved bringing the unbiased, unfiltered truth to the public. And because it was the influence of conservative corporations on the CBC which had brought it about, I decided to enter the field of corporate journalism so I could inform the public of the truth about brands, products and advertisement campaigns.

Since then, I, along with some other colleagues disenchanted by the present state of media and journalism, have started our own radio channel where I do a weekly show on local companies and brands. It took some time, but I managed to convince these brands that the best way to generate new customers today was not by following the marketing mantra of ‘sell, sell, sell!’ but to actively inform their targeted clientele about the qualities and features of their products. My weekly radio shows would focus on a particular brand, and would dissect its pros and cons in an unbiased way, so that instead of having to believe in flashy advertisements, the people could actually decide for themselves whether the product was good for them or not. Obviously, this meant that not every local company was interested in having me do a show about them [read: many corporations have skeletons in the closet] but it did enable several local start-ups who were having a hard time getting through to the public through conventional advertising to get off the ground.

Now many of you may be wondering how it is that we managed to stay afloat when we kept reviewing local companies and corporations in an unbiased and open manner. The answer is that it wasn’t easy but as I’ve already mentioned, there were some honest local companies that had good, solid products and wanted to coexist beneficially with the local community – these were the companies that became our financial supporters. In corporate journalism, these companies are described as ‘transparent and human’ for they respond to consumer criticism by fixing their products and services. This has been my drive ever since the CBC lockout, to drive the point home to commercial companies that the old days of ads filled with superlative claims are now over, you need to actively engage and inform your clients (and think of them rather as an audience) if you want your product to sell.