Good Morning,
The Bank of Canada left the overnight rate unchanged - which caught 1/2 of the market off guard.
There has recently been a divide between the economist camps, with 1/2 of the economists suggesting that the Bank of Canada should leave the overnight rate as is, and the other 1/2 expecting a .25% drop.
The reason for the Bank of Canada leaving the rate unchanged is due to inflationary concerns. As mentioned last week the Bank of England left their prime rate unchanged and Mr. Bernecke ( US Federal Chairman) suggested that he may raise the overnight rate in the US next Federal Bank meeting.
We do not expect our prime rate to increase any time soon, but think the Bank of Canada will wait to see what results come out of his previous reductions.
Did you know?
1) We have had some lenders’ legal departments look at the issue of using purchase agreements without witness signatures. Their position is that witness signatures are required due to far too many of the fraud files are files where a witness signature is missing from the purchase contract.
We understand that the real estate council has advised that witness signatures are not required. Clearly this is a case of lawyers giving different advice depending on who the client is. So far we have managed to have these contracts accepted, but not without resistance and in the case of 2 lenders they will not accept them at all.
Whenever possible it would be best to have the contracts witnessed in case more lenders take on this position.
2) Some pre sale projects will not give access to appraisers at the time of completion, except on the day of the client walk through. As you know the walk through can be very last minute. We had one situation where the client did not inform us of this limitation and when we sent the appraiser around no access was granted. The lender that the client was approved with would not accept an appraisal based on the plans, so we needed to find a new lender 1 week prior to completion.
· if the rate was lower than current market the client would have lost out or perhaps no longer been qualified.
The appraisal is in most cases, is the last condition to financing that need to be met as we cannot do the appraisal until the building is complete, because it must indicate that the building is 100% complete to be acceptable. If you have clients in a presale situation it may be a good idea to find out the developers policy about access.
Thank you,
Paula Siemens -AMP
INVIS - SIEMENS GROUP
902-777 West Broadway Ave.
Ph:604-351-7438 x 4
Fax:604-648-9106
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