Gina Burgio, Mortgage Agent


Will the tighter mortgage rules lead to excessive cheating?

In response to the recent Financial Post article (link below), do you feel like the tighter mortgage rules will show a great deal more cheating?

I'm torn because I know that a 20% downpayment from an investor is difficult, though not "impossible" as this article states, to find for some investors. But I have to wonder if it is not exactly what we need to protect the market from people who really shouldn't be investing in some cases. Speaking from personal experience, it takes a good deal of credit and/or liquid assets to manage a property properly and not be hanging on by your fingertips.  After all, if the mortgage payment is reliant on rental income there has to be some kind of padding for carryover for at least a few months in a tenant-less or "worst case" scenario.  

What are your thoughts?

 Original Article:

Tighter mortgage rules may lead to more cheating 

By Andy Holloway, Financial Post

Mortgage fraud may not be the most serious crime in the grand scheme of things, but it's not something the government should be helping. But that's exactly what real estate professionals say is a likely result of the new mortgage rules being put into place on April 19.

 "There's going to be a dramatic increase in mortgage fraud again," says Don Campbell, president of the Real Estate Investing Network, a Calgary-based association of investors who collectively own more than $3 billion in property. "You watch this thing start to take off."

 The reason? It's virtually impossible for investors to buy a third rental property without putting 20% down because the new Canada Mortgage and Housing Corp. rules use a 50% add-back policy instead of an 80% offset for rental income. Essentially, that means investors get less mileage from the rent that is typically used to pay off the mortgage.

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Gina Burgio

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256


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Comment balloon 3 commentsGina Burgio • March 31 2010 11:05PM


Well a real interesting time to be watching out for.

Thanks for the update and I agree about the rules being excessive but *Sigh* I guess we will see how this plays out!

Tom Davis

Posted by Tom Davis, FREE Delaware Homes Search!, $$ Save $$ - Find Homes! Delaware Realtor (Harrington ERA,DE Homes For Sale, $$ Save $$ Buy Today !) over 10 years ago

I don't know the answer, but let's hope not.  It's going to be tough to start any sustainable market stability until there is a reasonable amount of earned trust in the integrity of every aspect of the process.

Posted by David North, for a rewarding real estate experience (Coldwell Banker Bain) over 10 years ago

hey Gina, i just got back on activerain and got busy blogging again.  you were one of the first people i followed here about 7 years ago, so i was just checking to see if you still log in here or if these comments still reach you.

Posted by Robert May, Real estate consulting (Robert W May - Lethbridge Real Estate) over 4 years ago