Tag Archives: Property

News

Canada’s finance minister proposes changes to mortgage lending laws

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From the National Post.

Excerpt:

On Tuesday, the Department of Finance announced three changes to the standards governing government-backed mortgages, that come into force April 19. Here are a summary of the changes.

QUALIFYING FOR A FIVE-YEAR RATE

The adjustments to the mortgage framework will require mortgage insurers to ensure that new borrowers qualify for a five-year fixed rate mortgage when calculating the gross debt service and total debt service ratios. The measure is intended to protect Canadians by providing them with additional flexibility to support mortgage payments at higher interest rates in the future.

LIMIT THE MAXIMUM REFINANCING

Borrowers seeking financial flexibility can currently refinance their mortgage and increase the amount they are borrowing on the security of their home up to a limit of 95% of the value of the property. The adjustment will lower the maximum amount of the mortgage loan in a refinancing of a government-backed high-ratio mortgage loan to 90% of the value of the property, consistent with the principle that home ownership is a tool for savings.

DISCOURAGING SPECULATION

This measure will require a minimum down payment of 20% for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation. At present, borrowers may purchase a residential property with a 5% down payment. The change will require a 20% down payment for small non-owner-occupied residential rental properties. Borrowers purchasing owner-occupied residential properties which also include some rental units (such as a duplex) will still be able to access government-backed mortgage insurance with a 5% down payment.

But the CEI reports that the Democrat mortgage bailouts encourage fiscal irresponsibility.

Excerpt:

Economists and real estate experts are saying that a $75 billion mortgage bailout program designed by the Obama administration has backfired and harmed the housing market…

[…]Earlier, the government pushed through billions more in other mortgage bailouts, to bail out even reckless high-income borrowers, and forced financial institutions the government took over in the name of fiscal responsibility, like Freddie Mac, to run up billions in losses bailing out irresponsible borrowers.

Banks will now be pressured to make even more risky loans. The House has approved Obama’s proposal to create the so-called Consumer Financial Protection Agency. Government pressure on banks to make loans in economically-depressed neighborhoods was a key reason for the mortgage meltdown and the financial crisis. Yet Obama’s disturbing proposal would empower the new agency to enforce the Community Reinvestment Act without regard for banks’ financial safety and soundness.  The Community Reinvestment Act was a key contributor to the financial crisis.

The mortgage crisis was also caused by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax cheat Timothy Geithner, even though he admits that “Fannie and Freddie were a core part of what went wrong in our system.”

Worse, the Obama Administration lifted the $400 billion limit on bailouts for Fannie and Freddie, so that they could continue to buy up junky mortgages at taxpayer expense, and showered their executives with $42 million in compensation.

Obama’s financial-regulation plan is “largely the product of extensive conversations” with two lawmakers responsible for the corrupt status quo, Chris Dodd and Barney Frank, and it expands the reach of regulations that have been used by left-wing groups to extort pay-offs from banks.

This is why we should have elected an economist like Stephen Harper.

Polemics

MUST-READ: J.P. Moreland’s argument for theism from consciousness

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Here’s a post from Thinking Matters New Zealand.

Excerpt:

Last year, the release of J. P. Moreland and William Lane Craig’s Blackwell Companion to Natural Theology saw a lot of attention. And quite rightly. The Companion marshalled some of most cutting-edge work in the field of the philosophy of religion and showed why natural theology is fast becoming an exciting scholarly domain again. But in the shadow of the Companion’s release, another of Moreland’s works was published: The Recalcitrant Imago Dei: Human Persons and the Failure of Naturalism. Although it might not have got the same amount of attention, The Recalcitrant Imago Dei also represented an important entry in the contest of ideas and a powerful defense of theism. In it, Moreland argues for the theistic position by way of a stinging attack on naturalism and its failure to answer the problem of consciousness and account for the basic facts of human experience, such as free will, rationality, and intrinsic value.

And here’s the formal argument:

1. Genuinely non-physical mental states exist.

2. There is an explanation for the existence of mental states.

3. Personal explanation is different from natural scientific explanation.

4. The explanation for the existence of mental states is either a personal or natural scientific explanation.

5. The explanation is not a natural scientific one.

Therefore

6. The explanation is a personal one.

7. If the explanation is personal, then it is theistic.

Therefore

8. The explanation [for the existence of mental states] is theistic.

That’s the argument. Each of the premises needs to be more likely than not for the argument to go through. And you can read about how each premise is supported in this helpful post from Bill Vallicella at Prosblogion. This is good little argument to ad to your quiver of scientific arguments. I think this argument and moral argument are two nice little philosophical arguments that show that theism is the necessary starting point for morality and rationality. Particles in motion will not do the job.

I actually learned about this argument by reading chapter 3 of “Scaling the Secular City”, and listening to J.P. Moreland lectures. If you want to learn about this argument in a lecture, try this one. This is one of my favorite lectures. It was delivered at the University of Georgia. That’s the one I use when I’m training this argument, along with his lecture on “The Invisible Man” for Stand to Reason’s Masters Series, which is also good. Moreland also does public debates.

I notice that the new book mentioned above is quite expensive, and you’d be better off buying “Body and Soul” and “Philosophical Foundations for a  Christian Worldview”. SPCK is an academic press and so their books are very expensive, compared to IVP.

Commentary

Thomas Sowell explains how politicians cause recessions while getting elected

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Article here at Townhall.com. (H/T ECM)

Excerpt:

After the cascade of economic disasters that began in the housing markets in 2006 and spread into the financial markets in Wall Street and even overseas, people in the private sector pulled back. Banks stopped making so many risky loans. Home buyers began buying homes they could afford, instead of going out on a limb with “creative”– and risky– financing schemes to buy homes that were beyond their means.

But politicians went directly in the opposite direction. In the name of “rescuing” the housing market, Congress passed laws enabling the Federal Housing Administration to insure more and bigger risky loans– loans where there is less than a 4 percent down payment.

A recent news story told of three young men who chipped in a total of $33,000 to buy a home in San Francisco that cost nearly a million dollars. Why would a bank lend that kind of money to them on such a small down payment? Because the loan was insured by the Federal Housing Administration.

The bank wasn’t taking any risk. If the three guys defaulted, the bank could always collect the money from the Federal Housing Administration. The only risk was to the taxpayers.

Does the Federal Housing Administration have unlimited money to bail out bad loans? Actually there have been so many defaults that the FHA’s own reserves have dropped below where they are supposed to be. But not to worry. There will always be taxpayers, not to mention future generations to pay off the national debt.

Very few people are likely to connect the dots back to those members of Congress who voted for bigger mortgage guarantees and bailouts by the FHA. So the Congressmen’s and the bureaucrats’ jobs are safe, even if millions of other people’s jobs are not.

Congressman Barney Frank is not about to cut back on risky mortgage loan guarantees by the FHA. He recently announced that he plans to introduce legislation to raise the limit on FHA loan guarantees even more.

Congressman Frank will make himself popular with people who get those loans and with banks that make these high-risk loans where they can pocket the profits and pass the risk on to the FHA.

So long as the taxpayers don’t understand that all this political generosity and compassion are at their expense, Barney Frank is an odds-on favorite to get re-elected. The man is not stupid.

Can you guess which political party Barney Frank represents?