Tighter mortgage rules will help fight repossessions

The Federal Government has been forced into a move that will make it harder for people to get a mortgage, as they will tighten the rules for government-backed mortgages. The reason for such a move is simple, some mortgages are easy to come by and now with the current housing crisis many homes are facing repossessions from the banks.

Year on year foreclosures have jumped up by 50 percent, this is something that the Federal Government has to try and get under control. The Canadian Government are now facing a bit of a crisis after they introduced mortgages that will take 40 years to pay off.

These mortgages did not want any down payment; so many people who were already struggling for money were able to take out a home loan. Now this has come back to bite people in the rear, as most people have less money to spare, and the first thing that people fall behind on are their mortgage payments.

The reason that the Canadian Government allowed this relaxation was to make home-ownership more widely available for Canadians. Canadians seemed to be loving the new 40-year mortgages, this has started to worry the federal Finance Minister Jim Flaherty.

Read the full report from the Montreal Gazette