The Globe and Mail Feb 11 2010
Under pressure form major banks, Flaherty considers tougher regulations to govern how mortgage borrowers are evaluated
The key to the proposal under discussion would see the creation of new conditions the banks would have to follow when determining whether a customer can afford a mortgage, according to sources. Those rules would require banks to consider whether a person who takes out a variable mortgage on a home can continue to make the payments if the interest rates were to go up significantly.
The fear is that money of the borrowers who are buying homes because of the unusual low mortgage rates will struggle with their monthly payments when interest raise. That could also damage the economy by prompting consumers to cut back their spending as they direct all their money toward their mortgages.
