Mortgage World is Upside Down

So much about the last 4 months in Canadian finance has been weird

In previous economic disasters those in trouble did a couple of things, some people sought insolvency protection and those with houses often refinanced to pay debt

2/

As @ScottTerrioHMA and @doughoyes will tell you Insolvency work is at an incredibly low ebb

And in mortgage world refinance for folks with debt problems has effectively vanished

It is best observed among the companies who specialize in sub prime mortgage lending

3/

The federally licensed B lenders, the large and small residential Mortgage Investment Corps, right down to individuals who do private mortgages: all profoundly not busy

Dead serious: way, way below last year's business

During an economic catastrophe?

Why would that be?

4/

Okay, some facts: 70% to 75% of all "B" mortgage business is refinancing an existing bank mortgage for folks who no longer qualify with their bank because of credit or income issues

A huge chunk of these refinances are for self employed and commissioned people to pay bills

5/

So what's different today: There. Are. No. Bills

If your mortgage, car loan, personal LOC and credit cards are on deferral and no property tax either: you're golden

Oh and the 3 adults in your household are on CERB: $6K a month

Why would you think about refinancing?

6/

You wouldn't

Yet people know there is trouble on the horizon, their job is gone or their small business is in awful shape, all this deferral won't go on forever so why not be proactive and plan for the future and check out mortgage refinance?

Nope, never happens, not ever

6/

When will mortgage refinance start to soar?

Q1 2021 with the big action in Q2

So no mortgage refinancing to consolidate debt during a worldwide pandemic BUT huge acceleration in people buying houses

Mortgage World is Upside Down