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Ottawa, Ontario, Canada (AHN) – Canadian Finance Minister Jim Flaherty announced Monday that Ottawa has amended three rules governing mortgages to curb rising household debts.

Under the new regulations, the maximum amortization period for government-backed insured mortgages was reduced to 30 years from 35 years. These are for mortgages with loan-to-value ratios of more than 80 percent.

Ottawa also cut the maximum amount that residents could borrow to refinance their mortgages to 85 percent from 90 percent of their homes’ value. The government also withdrew government insurance backing on lines of credit secured by homes.

With the changes, the amortization of an average Canadian resale house sold for $344,551 with an minimum 5 percent down payment of $17,227 would increase the monthly amortization by $110 to $1,555.

Although Canada has less than 1 percent mortgage default rate, Flaherty said the federal government wants to reduce borrowing with the average level of household debts rising to 148 percent of disposable income.

Flaherty said in a statement, “Canada’s well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries and helped protect us from the worst of the recent global recession.”

He added, “The prudent measures announced build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future.”

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Ottawa, Ontario, Canada (AHN) – To curb the alarming rise in Canadian household debt, federal Finance Minister Jim Flaherty urged Canadian banks Thursday to adopt prudent lending policies. He issued the proposal after Statistics Canada found that household debt reached a record-high level in the third quarter of 2010, outpacing even the debts of American households.

The International Monetary Fund has forecast a muted growth for Canada next year largely on account of the growing household debt.

Among the measures that banks could take are to cut the maximum amortization period for mortgages to 25 from the current 35 years, or to institute tougher criteria for lenders to be eligible for government-backed mortgage insurance. The insurance is usually a requirement to secure a bank housing loan.

Two large Canadian banks had earlier asked Ottawa to initiate measures to curb consumer access to bank loans. Flaherty reminded Canadian financial institutions that prudent lending is one of their hallmarks, which is the reason why no Canadian banks collapsed or required government bailout during the recent global financial crisis.

Flaherty also disclosed that the 2011 federal budget will not have any major new spending or new cuts. He said the restraint measures, worth $17.6 billion over five years, placed by the Tory-led government are sufficient to reduce Ottawa’s budget deficit according to timetable.

By not introducing major cuts and spending, the Conservatives would give the political opposition little room to push for a no-confidence vote after Ottawa submits its 2011 budget to the Parliament for approval. A no-confidence vote could trigger a spring election.

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Washington, D.C., United States (AHN) – President Obama signed into law an $858 billion tax bill Friday that extends tax cuts and unemployment insurance benefits throughout next year.

“It’s a good deal for the American people,” Obama said during a signing ceremony. “This is progress and that’s what they sent us here to achieve.”

The House approved the measure late Thursday.

The bill passed by a 277 to 148 margin with strong support from Obama, who said the measure is needed to help households recover from recession.

The new law will “protect our middle class, grow our economy and create jobs,” Obama said.

Critics of the legislation – some from Obama’s own Democratic Party – said the reduction in tax revenue from the bill would deepen the nation’s $14 trillion deficit.

They also said some of the tax breaks – particularly for estate taxes – benefit the rich but do little for middle-income and low-income persons.

The tax breaks were enacted during the Bush administration but set to expire on New Year’s Day 2011.

“This bill, the president of the United States believes and I believe, will have a positive effect on the economy,” said House Majority Leader Steny H. Hoyer (D-Md.). “I will vote for this bill because I don’t want to see middle-income working people in America get a tax increase, because I think that will be a depressant on an economy that needs to be lifted up.”

The Senate approved the same measure on Wednesday by an 81 to 19 vote.

The measure grants unemployed workers in states with the worst joblessness as much as 99 weeks of unemployment insurance benefits through the end of 2011.

It also seeks to stimulate the economy with incentives for consumer spending.

A two-percent reduction in Social Security payroll tax would allow wage-earners to keep as much as $2,136 out of their paychecks that normally would go to the federal government.

The bill represented one of Obama’s greatest bipartisan successes after drawing strong support from Republicans.

In addition, 31 conservative Democrats wrote a letter to Speaker of the House Nancy Pelosi before the vote urging that it be passed quickly.

“It is time for us to put aside the partisan talking points and accomplish what the American people sent us here to do,” the letter said.

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The Mortgage Insurance Companies of America reported that its members issued 6 percent more policies in September than in August. At the same time, endorsements fell 6 percent at the Federal Housing Administration. MICA also reported that new mortgage insurance applications were virtually unchanged.

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The failure of Security Savings Bank, F.S.B., last week is expected to cost the Deposit Insurance Fund $82 million. The Missouri Division of Finance’s seizure of WestBridge Bank & Trust Co. is projected to cost $19 million. But last week’s biggest toll — $407 million — came as a result of the closure of Premier Bank, also by the State of Missouri.

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New regulations were proposed Friday by the U.S. Department of Housing and Urban Development. The agency wants to increase its authority to hold mortgagees liable for insurance claims paid on loans that don’t meet its guidelines. Mortgagees would be required to indemnify HUD if they failed to “verify and analyze the creditworthiness, income, and/or employment of the borrower.”

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An effective business plan, for most business, can help you think about the business and get to know it fully. It also helps you to strategically plan for the different aspects of the business. Such plans let the investor know what will be pursued as well as provide a clear road map for the management to follow.

Savvy investors always put together a business plan for each property investment. It is important therefore, that you take your time to plan each real estate investment you make.

In writing your plan, you have to identify the areas for improvement and the strategies for increasing the value of the property.

For first-time investors, it is important that you ask the following questions before writing your plan:

1 Why am I going into real estate business?
2 What challenges are involved in real estate? Can I handle them?

Taking time to answer the questions may prevent you from making costly mistakes which make this type of investment a disaster for many people.

Real estate investment comes with its own challenges and it is important that you know them and have a plan for resolving each of them. For most that are bringing in investors to look at your plan, the investors will want to see that you have experience in acquiring and managing real estate – strong enough to face the challenges involved. They want to know if you are emotionally and financially capable of handling tenants who do not pay and refuse to leave. They want to know if you are capable of handling the maintenance of the property and the contractors involved.

Strengths and competitive advantages are also points you should note though they are less important in real estate than in other businesses. You many want to talk to local brokers who know the market and can give sincere and honest advice.

What about insurance and tax reporting? You must be able to source for the right insurance coverage on your property. You must make sure all dues are paid in taxes and your accounts balanced. If you are not very good at this, you may consider getting if done through consulting.

Partnership is also an important issue in real estate investments. If you consider bringing in partners or investors, you have to look at securities law issues and investor communications. You must be ready to provide the reports and financials at intervals determined by the investors,or state laws. Most investors like to see quarterly financial reports.

Writing an effective real estate business plan, even when you know about the business, helps you to know it better. Put yourself in the investors’ shoes when writing your plan. Think about what they want to see and hear and address such.

Above all, writing an effective real estate plan requires getting all the available information you need in putting the business together.

Author: Oyinlola Akinsanya
Article Source: EzineArticles.com
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