Low Interest Rates Fuel Strong June Housing Starts

This was the title of a recent article in the Globe & Mail which discusses the fact that persistent low interest rates are fueling a escalation in housing permits/starts as well as sales of high end homes. Even after interest rates started climbing last summer and we were told it was the end of ultra low rates we're now back where we were last year with rates as low as 2.89% for a 5 year fixed mortgage term. It's been more than 6 years now of ultra low rates and every year economist have been predicting the rise.
See the full article below if interested:

B.C. court says the mortgage penalty class action against CIBC can proceed. The court “certified” the class action last week, meaning that the case can be heard and the evidence weighed.

According to Kieran Bridge, the plaintiff’s lead counsel in B.C., “the principal issue is whether mortgage language about prepayment penalties that was used by CIBC on mortgages entered into between 2005 and 2009 is so vague that it is void and unenforceable, so the penalties that were collected must be refunded to customers.


An alternative question, he says, “is whether the problems with the mortgage language limits any prepayment penalty to no more than three months’ interest on the amount prepaid.”

“Another significant issue is whether, even if the mortgage language is otherwise enforceable, the mathematical formula used by CIBC was improper and not permitted by the mortgage language, and led to overcharges that must be refunded.”

Particularly interesting is that the action claims that CIBC’s prepayment formula was “marked as being internally confidential.” That makes it sound like CIBC was trying to hide the formula from people, an allegation that CIBC would certainly deny, we suspect.

The next steps following a class action certification are generally the production of documents by both parties and the holding of examinations for discovery. Bridge adds that this ruling also enables parallel class actions in Ontario and Quebec to apply for certification.


This case has been going on since 2011. It all came about when lead plaintiff Erin Sherry broke her FirstLine mortgage early and got dinged with a $47,000+ penalty. CIBC, which owns FirstLine, later reduced the prepayment charge and Sherry further recouped the losses when she refinanced at Macquarie Financial at a lower interest rate. But that wasn’t enough for her to drop the case.


Here is the judgment if you’re interested. The allegations against CIBC have not been proven.

Full Article >


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