Royal Bank of Canada: ... I'm Sorry, ... So Sorry!

...   (I'm sorry) I'm sorry
(So sorry) So sorry
Please accept my apology
But love is blind
And I was too blind to see
Oh, oh, oh, oh
Uh-oh ... Oh, yes

Globe and Mail
Royal Bank of Canada chief executive officer Gord Nixon has issued an open letter apologizing to employees for a controversy involving the bank’s use of temporary foreign workers.

In a statement titled “An open letter to Canadians,” the bank’s CEO said the bank is in compliance with regulations involving temporary workers, but should have handled the situation better.

“I want to apologize to the employees affected by this outsourcing arrangement as we should have been more sensitive and helpful to them,” Mr. Nixon said in the letter.

CBC News ... 'You have my assurance I'm listening,' Gord Nixon tells Canadian workers.

... This Hit That Has the Potential to Go Straight to The Top!
... Sadly, ... It's the Kind of Musical "Syrup" that is Played by our Fiscal Musicians all too often and only God Knows How Many Times We've Had To Dance to the "Fiddler's Tune".
...  So, ...
... please Feel Free to Jump Right In and Sing Along!

RBC Mortgage Scandal: Outrageous ... and Viral Too!

Canadian Mortgage Broker News

One broker is leaving nothing to chance amid the RBC public relations fiasco, creating a web page showing people how to switch their mortgage from the embattled bank to another lender.

“The response to the RBC story has been phenomenal,” says Scott Dawson, a Vancouver mortgage broker who yesterday told MortgageBrokerNews.ca that RBC’s public relations stumble in outsourcing its IT work to a company based in India was “gold” for mortgage brokers.

“I created a page on my website outlining what's required for an RBC client to switch their mortgage.” He says. “After sharing the link to clients and industry associates on various social media sites, it has already become the most visited page on my site.”   ... link to Scott's Webpage

more on the RBC iGate Scandal ... HERE 

RBC Survey Spreads (OSFI) Sunshine ... NOT!

A Disappointing Survey from RBC, in More Ways than One

The number of people planning to buy a home has plunged.

Only 15% of thosepolled by RBC said they are likely to buy a home in the next two years. That’s down from 27% in 2012.

It’s the largest drop in prospective home buyers ever in the 20-year history of RBC’s home ownership survey.

Some may find this gloomy news, but housing is cyclical and corrections must be expected. We were actually more disappointed by another issue in RBC’s survey (more on that below).

First off, there is the obvious question, which has some obvious answers:

Why are more people backing out of the real estate market?

The reasons include:

1. Stricter Mortgage Rules
   Ottawa imposed a slew of mortgage rules last year, and the amortization reduction (from 30 to 25 years on high-ratio mortgages) had the biggest impact. Almost 4 in 10 prospective Canadian homebuyers said that the amortization change limits or delays their ability to purchase a home, according to RBC.
2. High Prices
   Overall, payment affordability is reasonable on a national basis (and far below its peak of unaffordability in the 1990s). But the average home price of $368,895 is still well above many people’s means. For some, even the modest 5% minimum down payment doesn’t make home ownership any easier. RBC says that 38% cited the minimum down payment requirement as limiting or delaying their ability to purchase a home. Among first-time buyers, 46% cited unaffordability as a top reason for not buying.
3. Fear of Overpaying
   Some people will naturally refuse to buy when they’re concerned that home prices may tumble. When media outlets like Macleans proclaim, “The housing bubble has burst, and few will emerge unscathed,” it absolutely affects market psychology.
4. Job Insecurity
   In the survey, 28% said concerns about job security were one of the reasons they haven’t bought yet. That’s up from 20% in last year’s poll.

Real estate analysts and policy makers in Ottawa are anxiously watching to see if spring demand will turn housing around. Ifinventories keep building, and low rates don’t keep sales on pace, it could make for a bearish summer market, nationally speaking.

******

Now let’s shift gears a bit. Here’s something that seems to speak to the motives behind this survey.

In one of the poll questions, RBC asks people who they turn to for mortgage advice. Here are the top sources of mortgage advice, as reported by RBC:

1. A banker: 76%
2. Family: 27%
3. Real estate agent: 23%
4. Friends: 20%
5. Real estate websites: 11%
6. Mobile applications: 11%
7. Private sale websites: 8%
8. Social media sites: 7%

Notice any glaring omissions?

That’s right. RBC and Ipsos Reid left mortgage brokers completely out of the survey.

That’s despite the fact that 61% of Canadians polled byCAAMP consulted mortgage brokers when getting a new mortgage.

It may not surprise people that a bank doesn’t want to promote brokers—it’s competition. But from a research credibility standpoint, we were surprised.

RBC bills itself as “the country's number one source of financial advice on homeownership.” Shouldn’t that title require some degree of research professionalism and objectivity?

Why would a company with RBC’s good reputation omit (intentionally or not) data that provides a fair representation of the marketplace? This makes us wonder what else they left out.

If an organization is going to purport to make newsworthy contributions to the national housing dialog, it better realize that people are watching its every word. One-sided survey results are nothing more than marketing masquerading as news. This example taints RBC’s mortgage-related surveys going forward, for no good reason.

---

Rob McLister, CMT

Posted in Mortgage Industry Reports
Canadian Mortgage Trends

RBC Boosts 5-year Rates!

RBC Boosts 5-year Rates

Melanie & Rob McLister

Candadian Mortgage Trends
The nation’s largest mortgage lender is lifting some of its fixed rates.

RBC’s “Special Offer” 5-year fixed will rise 20 bps to 3.69%, effective tomorrow.

By contrast, the average deep discounted 5-year rate is now around 3.09-3.19% industry-wide.

RBC’s posted 5-year rate remains unchanged at 5.24%. Posted rates have generally hovered around 5.24% since May.

The bank’s 3-year posted rate is also rising by 20 bps.

These changes follow a 40 basis point jump in the 5-year bond yield, from its lows in July. (Bond yields usually guide fixed-rate mortgage pricing, except during unusual times—like periods of global financial risk.)

Apart from these and other recent rate increases, the next wave of fixed-rate hikes will likely not arrive unless 5-year yields break above the 1.60% mark. This chart will help you follow the bond market, if you’re interested.