(Source: Globe and Mail)
CALGARY — There may be an upside to Canada’s emerging subprime-mortgage problem as lenders increasingly move in to foreclose on overextended homeowners: New-found investment opportunities for real-estate speculators.
And it’s not just the narrow but ballooning pool of subprime-mortgage foreclosures, but the overall boom in the foreclosure business that could get investors in a buying mood and desperate homeowners more willing to sell fast.
“A lot more properties will be sitting for longer and some of the properties are going to be vacant for sure,” said Kap Hiroti, who tracks foreclosure proceedings in British Columbia and operates Foreclosurelist.ca, which links sellers with potential buyers.
Although nationwide data are scarce, foreclosure rates are soaring in Alberta and British Columbia. And about half of those affected received mortgages they couldn’t really afford from lenders who were willing to finance people with lousy credit histories – borrowers who would be considered too risky by mainstream lenders such as the big banks and credit unions.
The rate of foreclosure proceedings has doubled in Alberta in the past two years to about 5,300 in 2008-09 and subprime lenders made up 56 per cent of foreclosures last year. In B.C., subprime lenders were responsible for 42 per cent of foreclosures last year.
Read Dawn Walton’s full article “Increases in foreclosure rates create buying opportunities” in the Globe and Mail (March 16 2009)