Is it possible that people have found a new way to go into debt? They created the mortgage. That’s one product. Then they took from a home they probably haven’t paid off yet and the bank lends them money based on the equity in the home. Now they’re created new forms of debt on top of that. What an absolute disaster waiting to happen. This is already terrible. I can only imagine what this monster will look grow into.
Real estate is in big trouble globally. We are watching the slowdown in the U.S, Australia, and Canada just to name a few. In Canada, it has become extremely normal to remove equity from the home and never make payments back towards it. In Australia, we’ve seen a market sliding further and further which will result in mortgages underwater. In the U.S. sales have absolutely slowed from coast to coast. But the Fed will save the day, right?
Canadians Keep Using Their Homes as ATMs Even as Market Swoons – Bloomberg
More Canadians ‘use their homes as ATMs’: Consumer agency – BNN Bloomberg