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The 08 Mortgage collapse in the USA, is a walk in the park to what will happen in Canada by 2025

1,318 views · Published 26 June 2018 · 8:07 · Indexed 20 September 2026

Channel: Mike Martins · 2018 · People & Blogs

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It seems like you're discussing the Toronto real estate market's downturn, particularly focusing on mortgage trends, subprime lending, and the effects of new mortgage regulations. Here are the key points from your commentary:

Key Points:
Decline in Mortgage Issuances:

Mortgage originations in Greater Toronto are dropping significantly, with a steep decline of over 25% in dollar volume compared to last year. This indicates fewer people are able or willing to get new mortgages.
Shift Toward Subprime Lending:

Traditional lenders (banks) are seeing a decline in market share, while private lenders, offering subprime mortgages, are gaining ground. This is a warning sign that people are using riskier financial products to secure housing, which could lead to future financial instability.
B-20 Guidelines:

The implementation of stricter mortgage stress tests (B-20 guidelines) in 2018 forced borrowers to prove they could handle higher interest rates, driving some buyers toward private lenders who are not subjected to these tests.
Concerns About Subprime Loans:

You're highlighting that many people may not fully understand the dangers of subprime loans. Just because someone has "good credit" doesn't mean they should be getting a private loan, especially with potentially higher interest rates and fewer protections.
Comparison to the U.S. Subprime Crisis:

You draw parallels between Canada's current real estate lending situation and the 2006 U.S. subprime mortgage crisis. You're warning that Canadians may not recognize the signs of a looming crisis, as they falsely believe Canada's situation is different.
Housing Market Bubble:

You suggest that the Toronto housing market could be in for a significant correction, as prices and credit growth are closely linked. The use of homes as "ATM machines" (refinancing for extra cash) is unsustainable, and the party could end soon.
Predictions:
Housing Market Crash: You hint that Toronto could face a sharp decline in real estate prices, possibly back to 2009 levels, as credit growth slows and people turn to riskier financing options.

Subprime Mortgage Fallout: There's a risk that many buyers relying on subprime loans will default if interest rates rise or housing prices fall, potentially leading to a financial crisis similar to what happened in the U.S.

Increasing Defaults: As more people stretch themselves thin with subprime loans, a wave of defaults could hit the market once they can no longer keep up with payments, exacerbating the downturn.

Does this summary capture what you were aiming to convey in your commentary?

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