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Crown jewels including resorts and a gas station chain are up for grabs. Saudi Arabia mulls purchases.
(Bloomberg) -- China’s industrial companies’ profits fell in March as exports flagged and deflationary pressures persisted, suggesting the economy’s stronger-than-expected growth early this year might be tough to maintain.
New York Community Bancorp Inc. has had one of the most tumultuous quarters in recent banking history. Its first-quarter earnings will probably reveal more about impacts from the drama — and management’s plan to move forward.
Donald Trump’s longtime personal assistant, who worked for his real estate empire for decades, told a jury that she has a “vague recollection” of seeing Stormy Daniels at Trump Tower sometime before 2015.
The delinquency rate for US small businesses climbed to a three-year high this month, reflecting the impact of rent spikes and declining revenue, according to a monthly survey.
Mar 26, 2024
Bloomberg News
,The rapid run-up in mortgages during the pandemic represents a “pocket of risk” to the financial system but Canadian lenders are starting to get the problem of ultra-long home loans under control, according to the country’s bank watchdog.
“During the Covid years, the principal unintended consequence of what we went through was this buildup in mortgage underwritings,” Peter Routledge, who heads the Office of the Superintendent of Financial Institutions, said Tuesday at a National Bank of Canada financial-services conference in Montreal.
“That created a risk concentration and that’s worried us really since it formed,” he said. But he added that this is a “pocket of risk. I don’t consider this risk systemic, but it could lead to a period of uncertainty in the housing system.”
At the height of a housing market boom fueled by the low-interest rate environment, banks handed out 40 per cent more home loans compared to pre-pandemic averages, he said. Plus, half of those were variable-interest rate mortgages, compared to the regular rate of less than a quarter, he said.
“Notwithstanding that risk, I’ve been pleasantly surprised at how Canadians and their lenders continue to manage it down,” Routledge said.
Canadian lenders now have about $220 billion (US$162 billion) of mortgages with amortization periods — the length of time permitted to pay off the loan — longer than 35 years. That’s down 27 per cent from just under $300 billion at its height, he said.
“That’s a really good sign and I’m encouraged by that.”
Routledge’s remarks struck a more optimistic tone than comments he made last fall, when he issued stern warnings about the particular risks of variable-rate mortgages with fixed monthly payments, including calling them a “dangerous” product during a government hearing.
Borrowers with these types of loans have seen the portion of their monthly payment that goes to interest increase dramatically until they are no longer paying down any portion of the loan’s principal.
This has led to amortization periods theoretically stretching decades beyond the standard 30 years. But the contract with the bank does not actually change, so when the homeowners go to renew their mortgage at the end of a typical five-year term, they’re likely to face significantly higher monthly payments.
Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Bank of Montreal are the only three major lenders that permit such negatively amortizing mortgages. Over the six months through the end of January, the trio saw this type of mortgage decrease by 27 per cent to a combined $94 billion. That was down from $128.3 billion at the end of July, according to their quarterly reports.
Routledge did not specifically highlight the risk of negatively amortizing mortgages during an on-stage interview Tuesday, though in a copy of prepared remarks, he said the housing system would be better served if such products “were less prevalent.”