Recession over, says Bank of Canada

But unemployment expected to increase

There is a light at the end of the economic tunnel with the Bank of Canada announcing the end of the recession.

After contracting since the last quarter of 2008, the economy will grow by an annual rate of 1.3 per cent from July to September, stated the bank's quarterly Monetary Policy Report. This is in stark contrast to the bank's prediction in April that the economy would shrink by one per cent in the same period.

By the fourth quarter, the bank predicted the economy should be growing at a rate of three per cent.

"Stimulative monetary and fiscal policies, improved financial conditions, firmer commodity prices, and a rebound in business and consumer confidence are spurring domestic demand growth," stated the bank's report.

"However, the higher Canadian dollar, as well as ongoing restructuring in key industrial sectors, is significantly moderating the pace of overall growth."

If the bank's forecast comes true, the recession will have lasted just nine months.

However, Bank Governor Mark Carney cautioned employment won't bounce back as quickly. In fact, he predicted unemployment would continue to climb.

Scotia Branch & their Life Time Senior Customer

Recently Christine Hanson and I had some clients that were seniors. Christine was worried when they said they were going to go to their local Scotiabank branch to get the short term mortgage they required for their purchase, while they waited for the sale of their free and clear existing home to happen. Christine has been a real estate agent since the 90's, and knows well enough that it is a less efficient, streamlined process through a branch. This time, however, that wasn't the half of it!

The clients were 88 & 63 years old. Mr. had 3 great pensions, equaling more than enough to qualify them for the mortgage. The loan officer and the branch he has dealt with for-ever, wanted him to get a letter from his doctor, indicating that he was in good health. Keep in mind this was a 6 month term --- and they owned their home FREE and CLEAR (no mortgages registered on title).

Christine called me and asked if this was normal, and well.... no? We both had never heard of this in our entire careers? What was going on? On condition day, Christine called me and asked if I could help.

I actually spoke to my underwriter at..... yes! Scotiabank broker services, and she had the mortgage written up and finalized in less than 24 business hours.

What is the lesson? Beware of bank and credit union branches. When they place irregular conditions on your mortgage financing, OR they decline you, get a second opinion from a broker. We typically have much MORE experience & education than a branch 'loan officer' (who is not a licensed expert because they fall under the "Bank Act" - therefore no education or training).

I am very happy to say our clients are thrilled with their new home purchase and waiting for Christine to sell their existing home in Calgary.