US, world headed for 25 year depression: Jim Rickards

US, world headed for 25 year depression: Jim Rickards

“When I use the phrase 25 year depression, it sounds extreme but it’s not. We had a 30 year depression in the United States from about 1870 to 1900…The Great Depression lasted from about 1929 to 1940. The U.S. is in a depression today.” Well, it's been in the works for

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Canadian banking haven myth exposed

Canadian banking haven myth exposed

"One of the reasons that Canadians (and international commentators, other finance ministers and global financial institutions) buy this Canadian banking fairy tale is the way the government accounts for the money borrowed to support the banks." The sorry spectacle of Conservat

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Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your loans, guys and gals, because we are going into a high interest rate period. Very high. It will be the equivalent of going into the double digit interest rates we had in the 80s where many people threw their house keys at the bank and we had record numbers of ba

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E-cigarettes save lives, money

E-cigarettes save lives, money

"We know that cigarettes have thousands of chemicals in them and we know that they are killing us. They have been for over a hundred years. So now, the e-cig industry comes along with only one or two chemicals in their mixture and people are freaking out over these as well. Whe

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US inches closer to big bank charges

US inches closer to big bank charges

Federal prosecutors are nearing criminal charges against some of the world’s biggest banks, according to lawyers briefed on the matter, a development that could produce the first guilty plea from a major bank in more than two decades. In doing so, prosecutors are confronting

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Canada’s home sales top predictions; why a real estate crash is inevitable

Canada’s home sales top predictions; why a real estate crash is inevitable

“The assurance of relatively low borrowing costs has likely given home buyers confidence while rising home values have kept new listings at a healthy level. Stable employment has provided some assurance to owners and buyers alike.” Our website is back after many months of

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Comparing today’s recession/depression to the 1980 recession

Comparing today's recession/depression to the 1980 recession

"Much like today, Americans were concerned not only with high unemployment but increasing budget deficits in the early 1980s. A September 1983 Gallup poll found that three-fourths of the public agreed that the federal government's budget deficit was a great threat (42%) or some

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Why savers are getting screwed

Why savers are getting screwed

"Without the intervention of economic policymakers, interest rates would be naturally higher. That would increase the cost of borrowing for businesses and consumers, but there would be some offsetting economic benefits. Savers are getting screwed by the current monetary policy

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Geithner admits USA bankrupt to US Senate

Geithner admits USA bankrupt to US Senate

"Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses

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World economies on verge of currency revaluations to deal with debt

World economies on verge of currency revaluations to deal with debt

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford Basically what the world central banks are doing is increasing their money by devaluin

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Is Obama the next Mugabe of Zimbabwe?

Is Obama the next Mugabe of Zimbabwe?

"America, Britain, Japan, Germany, France, Sweden, Holland, Norway, Canada and Australia make up the Fishmongers Group and their meeting on Tuesday will deliberate on the state of the inclusive government, debt relief, public finance administration and the controversial economi

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US raiding foreign countries with dollars, not soldiers

US raiding foreign countries with dollars, not soldiers

""The United States is going to China and saying: we want you to commit economic suicide, just like Japan did. We want you to follow the same thing: we want you to revalue your currency, we want you to squeeze your companies, we want you to go bankrupt,” says Michael Hudson,

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Content By: The Coming Depression Editorial Staff (dates cited below)
Copyright: include link to this article on top of reproduction if you use it.
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mortage is death contract

“The Bank of Montreal has been hit by a huge mortgage fraud in Alberta that may cost it $30 million, a report said. The bank is suing hundreds of people in connection with the scam, including lawyers, mortgage brokers and four of its employees, CBC News said, citing legal documents.”

The case may be the largest mortgage fraud in Canadian history, generating about $140 million, with funds channeled as far as Lebanon, India, Saudi Arabia and the United Arab Emirates, it said.

The sophisticated scheme involved ringleaders identifying the worst house in a good neighbourhood. They would buy it at a fair market price, but convince the bank it was worth a lot more because of its location. The perpetrators would then pocket the difference in price.

A series of fake wage and legal documents would be drawn up to support the claim, with fake buyers, often new immigrants, paid a fee to use their names, the report said.

“Reading the newspapers these days you have to wonder whether Canada was on another planet when the global credit crisis hit. House prices have actually increased in some provinces and now there is a shortage of houses for sale in southern Ontario. Credit is flowing everywhere.” — Murray Dobbin

Let’s get these recent turn of events straight: some smart people bought a cheap house with a big mortgage, based partly on the bank’s own malfunctioning computer program, and then re-sold the house and pocketed the difference? This is called ‘flipping’, and as much as the bank hates it, it’s perfectly legal. We should have no tears for the big bank, it always cries when someone stops them from robbing the public for a change. The only grey area here is making up ‘fake’ buyers. This is done because the bank keeps track of ‘flippers’ and refuses to give them mortgages after a while, because they can’t stand how much money they are making off them.

There was probably a time when mortgage lenders investigated the property themselves or had it appraised in person. Now they just use the government appraisal (or a computer program in this case) and no one ever comes to check out the property in question. The most that many bankers ask for in regards to proof of a property transaction is to send a digital photo of a property (house). They say they just need something on file to show the asset that was being used as leverage for the loan. Indeed, it would be a cinch to mortgage a house in complete disrepair. If the foundations were crumbling and the wood eaten away by carpenter ants – the bank wouldn’t know anything about it. The banks bring this type of fraud onto themselves by not being more vigilant when handing out mortgages.

In recent years many banks have eliminated effective use of the services of Accredited members of The Appraisal Institute Of Canada. Doing this, they have used mass appraisal and valuation schemes to save money. Subsequently, they have made themselves and their shareholders and the public vulnerable to schemes and fraud.

They have elected to risk public trust and shareholder profits so that they as Managers can look good for selling large sums of money for projects and schemes. They may even be somewhat willing if not unwitted participants in these frauds. Conservatively valued properties may be less favorable to Mortgage Managers than inflated values.

There is often an internal policy or incentive to loan as much money as they can. Banks compete with each other for big loans. Many mortgage managers see themselves a valuation experts. They are pressured by their own managers to perform and “put loans out there”. Promotion in the Company depends on their “performance”. Astute and nimble scheme makers take advantage of this greed.

They may obtain much more funding than might be the case if a proper valuation or appraisal is done on their project or proposal or for their mortgage. The independent and fully trained Appraisers of the Appraisal Institue Of Canada are qualified to provide the valuations for protections necessary to allow mortgage managers and lending institutions to have a sense of security in their actions. Shareholders are protected. The public trust is protected. The reasonable fees charged for these services are well spent to protect everyone involved. Too often public banks have eliminated the very eyes and ears they need to ensure the integrity of the lending processes. Proper Appraisals and such investigations can help to eliminate fraud and abuse.

Canada’s sub-prime mortgage time bomb
By Murray Dobbin | October 22, 2009

What do the mid-recession housing boom and the Harper Conservatives’ rise in the polls have in common? Answer: the Canada Mortgage and Housing Corporation’s massive sub-prime mortgage scheme that is keeping up the appearance of an economic recovery.

Reading the newspapers these days you have to wonder whether Canada was on another planet when the global credit crisis hit. House prices have actually increased in some provinces and now there is a shortage of houses for sale in southern Ontario. Credit is flowing everywhere. Source: Rabble News

Will Canada have a bad real estate downturn?

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Moreover, believing that you people don’t have subprime mortgages on the books is kidding yourself as well. 40 year zero down? If that isn’t subprime, we don’t know what is; and that’s just one aspect of your subprime market. We had our deniers here too saying that a crash could never happen. Well, reality does matter and if housing costs far outstrip income gains, which they do, astronomically, you’ve got problems.

mortage resets to affect canada

Borrow as much money as you can at 3% and then go invest it in oil stock that are paying anywhere from 8% to 15% in dividends. Keep the difference. When the economy recovers, interest rates will rise, but so will stock prices. So then sell the stocks, pay off the loan and keep the difference. Easy money. Even some bank dividends are more than 3% so you could borrow from the bank, invest in the bank, and still make a couple of percent. Average Canadian family income after taxes $ 71,500.00. Average price of a home in Canada $ 327,500.00. It simply does not compute.

It is about time that the federal government introduced new mortgage rules. The caveat is that these are not really “new” rules. Weren’t these the same rules that were in place a decade or so ago? Credit check on earning power and debt load capability, with 20% minimum down payment?

When the average Canadian looks around the neighbourhood in which they live, they are astounded that people can afford such luxurious, spacious homes. (Many prudent people live in the “shacks on the street of castles”) Low interest rates simply allow people to live beyond their means, if not now, for sure in the future when interest rates rise, when heating costs rise, etc. etc. Down will come tumbling the prices of large homes that people cannot afford to live in and up go prices of modest sized homes – or at least remain stable and good value prices, or at worse, decline modestly while large home prices plummet.

Prudent use of personal credit is one of life’s great lessons! Sure, it is nice to pursue one’s dream home – and we are not denying that – but one must be cautioned that the dream home really is a dream if it is not affordable. Everyone woud love to own a Ferrari but reality promptly corrects this fantasy.

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This entry was posted on Wednesday, May 5th, 2010 at 3:57 pm and is filed under Scams. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Comments

  1. May 5, 2010 @ 4:54 pm


    Early in 2000 myself & other lenders at two of our BMO branches noticed major irregularities of lending practices by both a relatively new employee & one of the Lending Managers. The employee who, note was East Indian had been hired only a year previously, part-time to train as a teller and now was was being personally trained as a loans officer by the Loans Manager and being fast tracked in his accreditation as a lender because of his assertiveness/aggressiveness in mortgage sales. This trainee was given direct assistance by the loans manager during exams which was against policy. He passed all exams with remarkable grades and in record time.

    During his training & after, his sales were phenomenal vetting him and the loans manager fantastic bonus’ and awards. In the meantime their offices were piling up with files on the floors and cabinets that were missing required documentation. Normally loan/mortgage funds aren’t advanced until all documentation is present. Red flags began popping up. Both the loans officer & loans manager rejected any assistance whatsoever. Too their loans were expanding rapidly throughout the western provinces, out of the normal geographic areas of our branches.

    Roughly a year after being hired as a loan officer trainee, suddenly the employee was gone, the Loans Manager transferred to another branch, & all their files removed. It was done very quietly, we only found out later that the employee was given the option of being charged with fraud or to resign. He resigned and moved to Vancouver and hired as broker by a Mortgage Brokerage. The loans manager is still with BMO as a loans manager in a different city. A CMHC employee was connected & fired.
    The banks are a entity unto themselves and want to keep it that way.

    Posted by Jason
  2. February 12, 2011 @ 3:40 pm


    For Christ sake make it short.
    I fell asleep twice listening to this!!!

    Posted by W.Palmer

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