I can only imagine the prospect of declining sales volumes has agents and brokers waking up in a cold sweat at night. So much so they must be calling their industry associations each morning in a panic to get them to do something, anything about any possible chance the government could reign in their ability to sell their products.
Before I continue, let me make one thing absolutely clear: I believe the Canadian government needs to reign in the CMHC on behalf of the Canadian taxpayer. I believe the CMHC has moved beyond its mandate significantly and I believe the Canadian taxpayer is at significant risk of financial loss if the real estate market were to correct beyond 15 per cent.
Of course, CAAMP and the CREA take the opposite belief--to them, it is impossible for the real estate market to correct 15 per cent.
To show you how rotten things have gotten at CAAMP, I give you this: In November of 2009, less than 3 short months ago, they published this study, with this graphic showing that 68 per cent of mortgages written in 2009 were of the "fixed rate" variety:
Now with all the pending talk of limiting CAAMP member's abilities to give you and I too much money too fast, they've decided to revise their fall 2009 report with this gem, aptly titled: Revisiting the Canadian Mortgage Market. And here's their revision:
Line extends much higher than 68 per cent doesn't it? Wow. When the numbers don't support your argument, add 20 per cent. Here's further proof they have made this 80% number up (I'm wrong about this assumption, if Rob is correct in the update below).
Their report is full of other baseless calculations and assumptions, like their so-called "stress test" that demonstrates first time home buyers have never had a safer opportunity to buy or exercised such caution when entering the market--forgive me while I puke a little in my mouth.
I won't waste my time ripping the whole report to shreds, instead I recommend that it just get shredded.
I have a very good understanding of public policy process in Canada. It is a crying shame that organizations like this are allowed to play a part in the process at all. It is a freaking tragedy though that policy makers (the public servants who work in the departments, not the politicians) are forced to give these types of reports higher credence than detailed analysis by arms-length third party organizations simply because they don't exist in Canada. This report demonstrates that truth is apparently inconsequential to their business organization and is merely something to be rewritten when it doesn't support their outcomes.
Thanks to Skeptic and Double Agent in comments for the links and tips to this mess. Edmonton Housing Bust has another similar post up, and to their credit, the McListers aren't censoring comments on this bullsh&t on their blog.
In all fairness to the CAAMP and their members, this comment was posted on the McLister's blog by Rob (link above):
...remember that this newest study included only purchases. The November 2009 study included purchases, refis, and renewals. People are more likely to get variables when renewing or refinancing. That is largely why the fixed-to-variable ratio is different in each study.This explains the discrepancy in reported numbers. I've added a comment above in italics, but did not change my original post, not because I stand by my assertion that the CAAMP was making something up, but because I wrote it first, and meant it at the time given the information I had, and so that you can see I'm not hiding anything. I accept Rob's statement at face value and it is a reasonable explanation for the change in fixed rate percentages.
I still stand behind the general premise of this post: CAAMP is an industry lobby group with a financial interest in seeing mortgage related policy remain unchanged, or further liberalized, so that they can continue to sell mortgage products insured by Joe Taxpayer and they are using "clever tricks" to demonstrate why they believe mortgage insurance policy should remain unchanged. They are not an impartial source of mortgage related information and should never be viewed as such by the general public or the public service.