International online retailer selling Canadian houses like shoes

by Neil Sharma, Mortgage Broker News

Chinese real estate portal Juwai—which collects staggering quantities of data on Canadian housing—has struck a deal with online retailer JD.com to start selling homes like shoes.

Juwai markets overseas properties to buyers in China’s Mainland and, according to a JD.com statement buyers can view houses listed for sale “like milk, shoes and other household goods.”

In addition to Canadian real estate, home listings from Australia, the U.K. and U.S. will also be advertised on JD.com—all popular markets for Chinese investors.

JD.com, which is often referred to the Chinese equivalent of Amazon, made a special request for Canadian real estate because of how popular of a commodity it’s become among Chinese consumers.

China forbids capital outflow exceeding USD$50,000, but it’s in the midst of loosening such restrictions and retailers like JD.com—China’s second-largest retailer after Alibaba—are champing at the bit.

However, news about the deal between Juwai and JD.com is bound to inflame tensions between domestic and foreign buyers, whom believe responsible for rising unaffordability.

Countries like New Zealand, Britain, Australia, Switzerland and Singapore, to name a few, have taken measures to protect their housing markets from foreign speculators, while Canada has steep foreign buyer taxes in its two most expensive real estate markets.

Troubled lender back from the brink

Home Capital has been in the news for all the wrong reasons in the last few years, but it appears the Alt-A lender has reached greener pastures.

In fact, the Toronto-based lender is ahead of schedule. The company’s CEO Yousry Bissada noted that since a buoyant third quarter in 2017, Home Capital is on pace to fully recover at some point this year.

“It’s been improving since the third quarter,” Bissada told Mortgagebrokernews.ca. “We were declining over 70% in the third quarter, and in the fourth quarter it was 60%, and our normal number for Alt-A business has historically been around 50%, so I think we’re going to get to that number in one of the quarters in 2018. We think we’ll get there in 2018, and I’m quite confident we will.”

The Office of the Superintendent of Financial Institutions’ latest Guideline B-20 stipulations threw an additional spanner in the works, but the company’s principal subsidiary Home Trust has undertaken an education program for its broker partners.

“Everybody is relearning what they can and can’t do, so there’s a larger portion of business that Alt-A lenders can’t do,” said Bissada. “Part of it is Home is doing is a lot of push to educate brokers on what mortgages fit our suite so that we have a higher chance of business being sent to us that will stay.

“Our BDMs are going to communicate what B-20 means. Many brokers are very familiar with it, but they’re communicating what B-20 means and what it means specifically for Home. There are brokers who deal with Alt-A quite regularly and are comfortable with it, and some brokers who deal with it as an exception and it’s not their main core business, so the more we can communicate what we want before sending, the more the probability of getting approved.”

Among Home Trust’s most popular product suites are Alternative A for immigrants, the self-employed, and people with bruised credit, as well as the “Accelerator” for A business.

“It’s a completely different year. We’re back in business; we’re full-out with our product offerings to mortgage brokers on the single-family residential side. We’re full-out on our commercial mortgages; as well, we have some retail products and credit cards. Summarizing it, we’re back in business compared to 2017, where we were stopped for a large part of the year. It’s only three months into the year, but it’s business as usual. We’re in this new environment of B-20, dealing with it like every other Alternative A lender has to deal with it. But we think it’s going to be a good year for us.”

Ron Butler of Butler Mortgage can attest to Home Capital miraculous, if quick, turnaround.

“Obviously, they went through a crisis, but every single mortgage that we’ve submitted they underwrote,” said Butler. “They went through a difficult time and they have come out of it much faster, and more efficiently, than I would have ever believed. This has been one of the most stunning turnarounds I’ve ever seen in business—it’s very difficult to pull back from the brink like they did.”

TD Bank CEO Masrani fears trade tensions could bring on recession (BNN)


As the possibility of a full-blown trade war between the U.S. and China looms, Toronto-Dominion Bank’s chief executive says he’s concerned that global trade tensions could boil over and even lead some nations into recession.

In an exclusive interview, Bharat Masrani told BNN’s Amanda Lang that anything that disturbs global trade is worrisome.

“Trade skirmishes have been there since freer trade started. Hopefully this is something in that realm, and not something substantial that results in protectionism and a trade war that could trigger a slowdown and perhaps even recessions in certain countries,” Masrani said.

Masrani’s comments come after China announced Sunday it was raising tariffs on 128 U.S. products in an escalating spat between the world’s two biggest economies.

Masrani warned that TD’s growth outlook could be hit by a risks to the U.S. economy such as the failure to reach a new NAFTA deal or increasing U.S. debt.

“We are seeing major potential deficits in the U.S. at this point in the cycle. If it turns out we get into a slowdown, what’s the implication there? [If NAFTA] it turns out very badly, what are the implications there?”  Masrani said.

“There are a lot of risks out there that we call headwinds that can turn out to be real, and if so, you will see implications at TD from a growth perspective.”

Toronto home sales fall 39.5% year-over-year in March

TORONTO — Canada’s largest real estate board said Greater Toronto Area home sales in March were down 39.5 per cent from a frenzied pace last year, as the market continued to feel the effects of cooling measures introduced at both the provincial and federal levels.

Both sales and price figures reported by the Toronto Real Estate Board on Wednesday dropped significantly from last year — what some observers consider a market peak –when home prices and sales skyrocketed and bidding wars became the norm, pushing the Ontario government to introduce a package of measures last April to cool the market.

That was followed by a financial stress test for buyers, which officially came into effect on Jan. 1 for federally regulated lenders, following an October announcement by the Office of the Superintendent of Financial Institutions. In addition, both variable and fixed-rate mortgage rates have risen over the past year as a result of moves by the Bank of Canada and fluctuations in the bond markets.

March’s sales figures were also down 17.9 per cent compared with averages over the last 10 years, while the number of new listings decreased by three per cent.

New sales listings totalled 14,866, representing a 12.4 per cent drop from last March, which helped to keep the market balanced between supply and demand. The low level of homes for sale helped keep prices in check, rising 2.2 per cent compared to February.

Sales also rebounded from the month before, leading BMO Capital Markets economists Robert Kavcic and Jennifer Lee to interpret the numbers as a sign that the market “is showing more signs of stabilizing.”

“While active listings are still more than double a year ago, we’re seeing a slow tightening of conditions off the mid-2017 lows,” they said, in a note Wednesday morning. “Keep in mind, too, that the market was drum-tight a year ago.”

However, when compared to last March, the average price of a home in the GTA was down 14.2 per cent to $784,558 last month, a decrease from the average of $915,126 in the same month last year.

Despite the decrease, TREB predicted home sales will be up relative to 2017 in the second half of this year.

“Right now, when we are comparing home prices, we are comparing two starkly different periods of time,” said Jason Mercer, TREB’s director of market analysis.

He said there was less than a month of inventory last year versus two and three months this year.

“It makes sense that we haven’t seen prices climb back to last year’s peak,” Mercer said. “However, in the second half of the year, expect to see the annual rate of price growth improve compared to Q1, as sales increase relative to the below-average level of listings.”

Protecting yourself from mortgage fraud

By: Vesna Spehar, Account Manager, Client Relations at Canada Mortgage and Housing Corporation

As Fraud Prevention Month comes to a close and home buying season begins, remember that if you plan on purchasing a home there are simple steps you can take to avoid becoming a victim of mortgage fraud.

Mortgage fraud occurs when someone deliberately misrepresents information in order to get mortgage financing that would not have been approved if the truth had been known.  This can take several forms – from misstating one’s employment, to inflating one’s income, length of service, or agreeing to be a “straw buyer” where one signs onto a mortgage application on behalf of another person.

Borrowers who misrepresent information or allow their name to be used in the purchase of a home are committing mortgage fraud. They will be responsible for any financial shortfall should the mortgage default and may also be held criminally responsible.

Protecting yourself from this kind of activity comes down to being an informed consumer. Remember: if a deal sounds too good to be true, it probably is. To protect yourself and your family, follow these guidelines:

  • Never deliberately misrepresent information when applying for a mortgage
  • Never accept money, guarantee a loan or add your name to a mortgage unless you fully intend to purchase the property
  • Always know who you are doing business with and never sign anything without understanding exactly what you are signing
  • Use a licensed or accredited mortgage and real estate professional
  • Get independent legal advice from your own lawyer/notary and talk to them about title insurance and alternative methods of protection
  • Contact the local provincial land titles office to obtain the sales history of any property you are thinking about buying and consider having it inspected and appraised.
  • Find out from your lawyer if anyone other than the seller has a financial interest in the home or if there are any outstanding liens or tax arrears
  • If a deposit is required, make sure the funds are payable to, and held “in trust” by, the vendor’s realty company or by a lawyer/notary

You can also help to protect yourself by inspecting your credit report at least annually by contacting Canada’s two credit-reporting agencies: Equifax Canada and TransUnion Canada.

For more information, visit Canada Mortgage and Housing Corporation’s website.

If you suspect that you or someone you know has been a victim of mortgage fraud, please contact your local police department or the Canadian Anti-Fraud Centre.