More than half a million Canadians have fallen behind on their various credit payments, fuelling a 19 per cent rise in the average national delinquency rate in the one-year period ending May 31, 2009, says a new report from Equifax Canada.

The credit bureau called the double-digit jump “alarming,” noting the average delinquency rate for Canada hit 1.52 per cent at the end of May.

Much of the trouble stemmed from missed payments on credit card bills and for sales finance purchases of items such as furniture and electronics.

Equifax defines delinquent bills as those that are at least 90 days overdue.

Nadim Abdo, an Equifax vice-president, stressed the “sharpest increase” in delinquencies resulted from credit card and sales finance purchases, which have risen by 38 per cent and 58 per cent, respectively, since May 2008.

Rising delinquencies in those areas are troubling because consumers tend to miss payments on those unsecured credit products before they fail to pay back collateral-backed loans such as mortgages, bank loans and lines of credit, Abdo said.

US Credit Card Delinquency Rate Jumps 11 Percent

Inquiring minds might be asking for a comparison between Canada and the US. For the answer, please consider 1Q credit card delinquency rate jumps 11 percent.

Credit card holders who in ordinary years might have used their tax refunds to pay down their balances apparently spent the money elsewhere as the recession deepened in the first quarter.

That’s one of the conclusions that may be drawn from data showing the delinquency rate for bank-issued credit cards rose 11 percent in the first three months of the year, according to credit reporting agency TransUnion.

The delinquency rate jumped to 1.32 percent this year, from 1.19 percent in the first three months of 2008, TransUnion said. The statistic measures the percentage of card holders who are three months or more past due on their payments for cards bearing MasterCard and Visa logos, along with American Express and Discover cards.

The average total debt on bank cards also rose, jumping to $5,776 from $5,548 last year.

TransUnion measures credit card delinquencies at 90 days, but tracks mortgage delinquencies at 60 days. Becker said that is because card payments are typically much smaller than mortgage payments, and it’s easier to catch up on past due cards. For people in financial distress, it’s much harder to produce two mortgage payments once they fall behind, he explained.

Not surprisingly, bank card delinquency rates remained the highest in the states hardest hit by the mortgage meltdown: Nevada, Florida, Arizona and California.

North and South Dakota and Alaska, the states with the lowest rate of mortgage delinquencies, are also the states with the lowest credit card delinquencies, TransUnion data showed.

TransUnion, which samples 27 million consumer records to produce its data, expects the rate of credit card delinquencies to rise for the rest of the year, ultimately reaching about 1.7 percent.

Note that the US rate was a comparison of March 2009 to March 2008 while the rate for Canada was a comparison of May 2009 to May 2008. Thus Canada and the US are following a similar path.

Dynamic Maps

The Federal Reserve Bank of New York has Dynamic Maps of Bank Card and Mortgage Delinquencies in the United States that some may wish to consider.

In regards to mortgages, Canada has some “catching down” to do, and it will. All the bubble areas such as Vancouver, Calgary, Toronto, etc are going to get hit hard.

Mike “Mish” Shedlock

http://globaleconomicanalysis.blogspot.com

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Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

http://offshoreinn.com/investing/500000-canadians-90-days-behind-on-credit-payments-delinquency-rate-hits-152-us-delinquency-rate-is-132/

reviewed by Moishe Alexander, CFC CEO

Canada’s housing agency said Thursday that, of the C$125 billion in purchases authorized by Canada’s minister of finance, C$58.8 billion have been completed to date.

In other related news Canadian Funding Corporation helps finance multi-residential unit in Sudbury, Ontario. See video.

Canadian Funding Corp. finances second mortgage to assist in financing Sudbury multi-residential unit (greater than 80% loan to value) when the banks can’t. Moishe Alexander and Canadian Funding Corp. give financial assistance when the banks can’t.

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Mortgage fraud and the victims of fraud in real estate purchase

Mortgage fraud is defined as the material misstatement, misrepresentation or omission that is relied upon by an underwriter or lender for funding, purchasing or insuring a mortgage loan. The misstatement, misrepresentation or omission refers to the lies as also the white lies. In case a lender makes an advancement of mortgage money while telling any small lie regarding the borrower’s income, property value, intended use of property etc. then a mortgage fraud is said to have occurred.

Common victims of fraud are those who have purchased real estate whose values have been over inflated by a series of fraudulent transactions. In this way several consumers have had incurred huge financial losses and their credit ratings have been damaged.

Dealing with real estate related fraud in Alberta

This is a crime and you need be informed and armed beforehand to effectively combat the damaging influence of mortgage fraud. You need to beware when approached for opting for any scheme set to help make quick and easy money in real estate. Caution needs to be observed when your name is being taken down for credit purposes or when you are being asked to create or alter certain documents in a real estate or mortgage transaction. If you are suspecting that you can get involved in a fraudulent transaction then you ought to immediately report such suspicions to the Real Estate Council of Alberta (RECA) for them to take suitable action.

In an effort to reduce mortgage fraud relating to the real estate market of Alberta, Canada the RECA has taken up several initiatives-

- Efforts have been made to bring about a change in the industry by introducing mandatory mortgage fraud awareness course, improved investigative resources and processes, stronger sanctions against licensees involved in mortgage fraud and development of ongoing education processes incorporating mortgage fraud identification knowledge.

- There have been collaboration endeavors with other stakeholders and enactment of legislative changes and information sharing efforts extended.

- There has been made efforts to increase public awareness.
These will hopefully work towards curbing mortgage frauds to a desirable extent and make the investment in real estate in Alberta less risky…

http://www.socialjury.com/632/dealing-with-fraud-in-real-estate-purchase-in-alberta-2/

Review made by Moishe Alexander, CFC CEO