TORONTO — Maybe Canada has something to teach the U.S. about housing finance.
One in 4 U.S. homes is thought to be worth less that the mortgage being paid on it. One in every 492 U.S. homes received a foreclosure notice in November. For the fourth year running, analysts are speculating on where the bottom is for U.S. real estate.
No such worries up here in Canada – yet its system of mortgage finance gets little attention in the U.S.
Not a single Canadian bank failed during the Great Depression, and not a single one failed during the recent U.S. crisis now dubbed the Great Recession. Fewer than 1 percent of all Canadian mortgages are in arrears.
That’s notable given that the recent U.S. economic turmoil was triggered by a meltdown in mortgage finance, forcing an unprecedented government rescue of Wall Street investment banks and the collapse of more than 300 smaller banks as the housing sector went bust.
How’d Canada avoid all that?
‘This sounds very simple, but one of our CEOs has said we are in the business of making loans to people who will pay them back,’ said Terry Campbell, vice president of policy for the Canadian Bankers Association in Ottawa.
There’s a certain […]
