What's In A Name
Whats in a name you say, oh you may be surprised. Technology has made our lives much more convenient however there is also a dark side to technology, it has made it very easy for the criminal element to do their dirty work. The mortgage industry is a breeding ground for fraud and lenders are required to do their due diligence when I submit yourapplicationto make sure that all is legit. Now I will say that I seldom see fraud in my office however there has been the rare occasion where incoming clients have presented documents that have been altered which is a hard stop to the application going any further.
Have you ever Googled your name to see what the big wide web has to say about you? It is a good practice because lenders and default insurers Google your name when they get your mortgage application and if they dont like what they see it could either put a stop to the application or cause us some issues to sort out that could delay the process. Lenders and default insurers will also Google the address of the property that you are buying. Keep in mind that they are lending hundreds of thousands of dollars to someone that they have never heard of before, put yourself in their shoes, if it was your money I am sure you would want to do your homework.
They typically are looking for things such as criminal activity, discrepancies in the application, property negatives. Some examples may be that your Facebook page states that you just started working for company ABC 2 weeks ago while youpresented an application that stated you have worked for company XYZ for the past 5 years. The home you are looking to buy was previously a grow op or involved in some other serious criminal activity. The home you are looking to buy was previously an auto shop or other environmental negative. You may have been recently charged with a serious crime, you get my drift.
So do your homework, Google your own name and see what the lenders will see, also Google the property address to see if any negatives come up as you may not want to buy a certain property if you know about its past.
Forecast Update: Economies Shutting Down
Rapidly evolving developments necessitate an update to the forecasts we published just last Friday. Additional quarantine or shut-down measures have been put in place in a number of countries in the last few days. As a result, we now anticipate global GDP growth to be 0% in 2020, followed by a sizeable rebound in activity in 2021 given our view that economic activity will rebound quickly once the virus is no longer a serious threat to public health. At present, we believe activity will begin to return to normal in the third quarter, except in countries where containment measures were aggressively deployed in the first quarter (essentially the Asian economies), where activity resumes in the second quarter. In Canada, the closure of non-essential business in Quebec and Ontario announced earlier this week will have large economic consequences. At present, we believe Canadian economic activity will fall by 28% in Q2 as these measures are felt. If other provinces follow, the fall in Q2 economic activity would be in the 35% range. We now assume that economic activity resumes by the start of the third quarter and that growth rebounds sharply at that time. However, the 20% drop in US economic activity in the second quarter will restrain the rebound in Canadian activity in the third quarter owing to the usual lags between US and Canadian economic outcomes. Under these assumptions, Canadian GDP would fall by slightly more than 4% in 2020 and rebound by 5.1% in 2021. Though we have not included any additional measures in this update beyond those already announced, we believe a substantial ramping up of fiscal support measures in Canada is forthcoming. There is a chance that aggressive virus management measures are required beyond Q2 to ensure the virus is truly well-contained. Evidence in Asia this week suggests that even in countries where aggressive management measures have been put in place, COVID-19 can come back quite quickly. If measures in Canada are not lifted by the end of Q2, growth would fall again in Q3, and GDP would fall by 6.3% in 2020 instead of the 4.1% we currently expect. A key question for forecasters is the length of the virus-related restrictions on firms and households. As noted above, a shift of one quarter in the resumption of normal operating conditions can have a large impact on growth outcomes. Since we do not have a good handle on the ultimate length of the interruptions, we consider it more informative to assign probabilities to the time at which virus containment measures end. At this time, we believe there is a 75% chance that activity resumes by Q3 and a 25% chance that activity returns to more normal levels by Q4. How officials manage virus containment internationally, as well as the evolution of the virus, will inform our assessment of probabilities going forward.
Source: Scotiabank Economics
Home resale market was gaining momentum prior to Covid-19
At the national level, resale home prices were gaining momentum in February. The 0.4% monthly gain in the Composite index was double the average of the previous ten years for a month of February. In particular, after 12 consecutive monthly declines, Vancouver HPI rose in each of the last five months, reflecting the fact that Vancouver resale market recently returned to balance. Sure, we still saw weakness in other regions, such as the Prairie Provinces (Alberta, Manitoba and Saskatchewan) where markets were still favorable to buyers. But CREA just reported a rather generalized increase in home sales in February, including for Calgary and Edmonton. Unfortunately, then came the outbreak of Covid-19 and its impact on oil prices and disruptions in the supply chain. The unprecedented sanitary measures imposed by the authorities to tackle the pandemic will severely impact business activity and jobs over the coming months. In that situation, the home resale market should be heavily curtailed for the coming months.
Source: Teranet Inc., and National Bank of Canada