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Lending locally not affected by Wall Street woes

Mortgages on resident-restricted Cheakamus Crossing properties expected this month

The worldwide economic turmoil should not affect most people trying to secure mortgages for employee-restricted residential properties in Whistler, several financiers said this week.

Banks involved in mortgages for the up coming Cheakamus Crossing properties — TD Canada Trust and Royal Bank of Canada — confirmed that they will be just as cautious as before when lending money for residential mortgages.

“We are following the rules that the federal government has legislated, through CHMHC (The Canada Mortgage and Housing Corporation), and are doing away with the zero per cent down option and the 40-year mortgage option, which will both come into effect mid-October,” explained Jonathan Decaigny, a mortgage specialist with RBC.

“Nationally and federally — through the Bank Act — everyone has decided to play by the same rules and do away with the zero per cent down and 40-year mortgages, because those were seen as the more risky products.”

Decaigny said RBC has actually increased its appetite for Whistler Housing Authority (WHA) properties over the past eight years, and the current lending environment in Whistler is “quite positive.”

“We understand the covenants and how they work a little better, and there has been a longer track record of the WHA ownership,” said Decaigny.

“As far as foreclosures go, there have been relatively few over the past 10 years, and that is always the risk with WHA because it is employee-restricted. The bank does not want to have a foreclosure situation and not be able to unload the property to pay off its debt. When WHA first came to the table with their ideas, I think all the banks were a bit hesitant, but it has worked well.”

Kelly Hechler, media relations for Toronto-Dominion Canada Trust, also said that TD Canada Trust does not plan to change their lending standards in the near future.

“We have always had prudent lending standards, and we are going to continue to have the same kind of lending standards,” said Hechler.

A large number of people in Whistler are expected to take out mortgages for WHA properties in the near future, when the Cheakamus Crossing and Rainbow neighbourhoods come on board.

Sales for Cheakamus Crossing homes begin in October. The neighbourhood will have approximately 152 town homes/duplexes and 67 condominiums available for Whistler residents. Final sale dates and prices will be confirmed after the Whistler 2020 Development Corporation receives their disclosure statement.

Mortgage rates are currently rising, however.

Starting Thursday, Sept. 25, several large Canadian banks announced increased rates for residential mortgages, including TD Canada Trust, RBC, Bank of Montreal, Desjardins Group and Laurentian Bank. Most of the mortgage loan increases were about 0.35 per cent.

A spokesperson for CIBC declined to comment on the institution’s practices. And a representative from Garibaldi Mortgage did not want to speak publicly about WHA mortgages.