Saskatoon Mortgage Broker shares article on household debt

OSFI adds to chorus of caution on rising household debt

Article by Tara Perkins, The Globe and Mail, June 27, 2014

“High household debt levels in Canada are “potentially a real problem,” the country’s financial sector watchdog is warning.

“Household indebtedness relative to income is likely to remain near record levels,” and households have less ability to absorb a major shock than they did a decade ago, Mark Zelmer, deputy superintendent at the Office of the Superintendent of Financial Institutions, said in a speech Thursday.

Banks and mortgage lenders need to be careful because the houses that they are counting on as collateral might not keep their value if the economy were to take a serious turn for the worse, he added. “Whether you believe or not that housing prices are too high, you do not hear many observers arguing they are low,” he said.

His cautionary note comes at a time when the top officials in Ottawa are sending out fewer alarm bells about the risks posed by the housing market and overextended consumers.”

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