Canada Created History Again – Citizens Become Better Paymasters When They’re More Indebted …

In fact, so much more that it’s hard to phantom how is average Joe going to turn over a new leaf without first declaring bankruptcy (this is likely the conventional scenario everywhere else) ?

Canada mortgage arrears rate continues to decline

OTTAWA (Reuters) – The already low rate of arrears on mortgages insured by the Canada Mortgage and Housing Corp (CMHC) declined further in the second quarter, an indicator which might temper concerns about a possible hard landing for the housing sector.

The government agency said in its quarterly financial report that the arrears rate had declined to 0.32 percent as of the end of June, down from 0.35 percent both at the end of 2012 and at the end of March.

Canada did not suffer the housing crisis that triggered the 2007-2009 recession in the United States, and its government has taken steps to try to cool the Canadian market without causing a crash.

The total amount of insurance CMHC had on loans was C$562.1 billion ($535.3 billion) at the end of June, just C$500 million less than the end of March and comfortably under the C$600 billion ceiling set by the government.

The amount of insurance it wrote during the second quarter was C$20.8 billion, slightly up from the C$19.5 billion of the second quarter of 2012.

The main factor in the increase was a 232-percent jump from a year earlier in portfolio insurance, which covers portfolios of mortgages. This was due to a combination of temporary changes and year-over-year comparisons.

Early in 2012, CMHC reduced access to portfolio insurance through an allocation process, helping return volumes to those of prior to the liquidity crisis. The second quarter of 2012 saw a significant reduction from the first quarter; by comparison the first quarter of 2013 were negligible, followed by a significant uptake in the second.

However, the portfolio allocation for 2013 as a whole is unchanged from 2012, and the variability for the year as a whole is expected to be minimal, it said.

Partly countering the second-quarter rise in portfolio insurance was a 16-percent decline in home owner purchase volumes and a 60-percent drop in homeowner refinance volumes.

“The latest mortgage insurance parameter changes that took effect in July 2012 effectively eliminated refinancing at loan-to-value over 80 percent,” CMHC explained.

Meanwhile, …

Canadians’ appetite for debt sees sharp jump in second quarter: report

The Globe and Mail

After ebbing in the first three months of 2013, Canadians’ penchant for debt returned in the second quarter and will likely continue to rise for the rest of the year, according to a credit bureau report.

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