Are Canadians Affected By The USA Mortgage Meltdown?
Are you worried about the instability in the American banking & lending melt down, foreclosures and the long list of banks closing their doors? We’re not immune up here in Canada. Well we are and we aren’t. Allow me explain.
When the USA gets sick, Canada usually gets a cold.
Canadian banks have massive national networks whereas American banks are mostly regionally focused. We have deposit insurance (provided by CDIC) as do Americans (FDIC), however that will not help the clients of IndyMac Bank who have deposits or investments in excess of the insured limits. Canadian strength truly lies in our limited number of charted banks within our national network.
There have already been effects here in Canada. Within the past year alone, several of our key alternative lenders have either scaled back, pulled out or shut down entirely. Here is a short list that is not even close to complete: GMAC, Accredited Home Lenders, Money Connect, Xceed and recently the involvement of the federal government pulling out 40 amortization’s and dropping the 100% financing available.
Have we ever had a bank failure here in Canada? Yes, we have had many, CDIC’s own website list’s at least 43 examples since 1970 without any since 1986! Even during the depression when most of the American banks were closing their doors, Canadian institutions remained mostly intact.
The situation is likely to be unfolding rapidly over the next few months, and anyone who claims to have all the answers is misguided. As a professional, I closely monitor this situation and how it will affect the demand for the Merchant Cash Advance industry. As the credit crunch expands, our terms continue to remain the same to the Canadian market. Fast, easy and risk free money.