A mortgage is a loan secured by real property, used to purchase real estate or to borrow against existing property value. The lender can seize and sell the property if the borrower defaults, through a process called mortgage origination. The term originates from the concept of a "death pledge," signifying the pledge ends when the debt is repaid or the property is foreclosed upon. In essence, it's a borrower providing collateral in exchange for a loan.
Mortgage rates climbed to a two-month high due to Trump's tariffs, rocking markets. Homebuyers are turning to riskier loans as interest rates surge. Powell's comments further fueled the increase in mortgage and refinance rates.
In 1946, the Canadian federal government created the Canada Mortgage and Housing Corporation (CMHC) to address the post-war housing shortage and promote homeownership.
In 1977, building societies dominated the UK mortgage market, holding 96% of the new mortgage loans market.
Between 1977 and 1987, the share of new mortgage loans held by building societies in the UK fell from 96% to 66%, while banks and other institutions rose from 3% to 36%.
In 2003, the dual application of stamp duty in Islamic mortgage transactions was removed in the United Kingdom's Finance Act to facilitate Islamic mortgages.
In 2004, a UN study compared mortgage systems in Germany, the US, and Denmark. Germany's Bausparkassen reported 6% interest rates with additional fees. US rates started high in the 1980s, reaching 6% by 2004 but with higher gross borrowing costs. Denmark's rates also fell to 6%, with additional fees.
At the end of 2007, the covered bonds market volume in the European Union was about €2 trillion, with Germany, Denmark, Spain, and France each having outstandings above €200 billion.
From 2007 to 2008, the financial crisis led to the establishment of FCA and PRA.
From 2007, fixing the rate of mortgages for short periods became popular in the UK.
In 2007, the subprime mortgage crisis occurred, contributing to later economic issues.
On July 28, 2008, US Treasury Secretary Henry Paulson announced an attempt to kick start a market for covered securities with large U.S. banks, to provide an alternative form of mortgage-backed securities.
On October 10, 2008, George Soros promoted the Danish mortgage market model in The Wall Street Journal.
From 2007 to 2008, the financial crisis led to the establishment of FCA and PRA.
In 2010, the foreclosure crisis occurred as a result of the subprime mortgage crisis.
In 2012, the federal government started scrutiny over the CMHC, with discussions about privatizing the Crown corporation.
From 2007 to the beginning of 2013, between 50% and 83% of new mortgages in the UK had initial periods fixed.
In 2013, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) were established in the UK to address regulatory failings highlighted by the 2007–2008 financial crisis.
In April 2014, the Office of the Superintendent of Financial Institutions (OSFI) released guidelines to tighten underwriting and risk management standards for mortgage insurance providers to contribute to a stable financial system.
In October 2016, Canada introduced a mortgage stress test. Every home buyer obtaining a mortgage from a federally regulated lender must qualify at a rate not lower than a stress rate set by the Bank of Canada, lowering the maximum mortgage approved amount.
In May 2018, the mortgage stress-test rate consistently increased until its peak of 5.34%.
In July 2019, the stress-test rate decreased to 5.19% for the first time in three years.
In December 2019, Canada's finance minister Bill Morneau ordered a review and consideration of changes to the mortgage stress test.
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