Overnight Relationships

 Hello Again,

I spoke with a good friend of mine, John Walsh – Founder of the Ottawa Real Estate Investors Organization (http://www.oreio.org/ ) and a Mortgage Agent with Mortgage Alliance, and I asked him to provide me with some explanation as to why it is significant to us that the Bank of Canada (BoC) has lowered THEIR lending rate. Here is an excerpt:

 “Banks borrow from the Bank of Canada at the BoC’s prime rate (also significantly from the bond market, but that’s another story for another day). Banks need to make money, so they charge a “spread”. The spread used to be 150 Basis Points (Bps), then 175 Bps, then most recently 200 Bps.

When the banks didn’t follow the second most recent rate drop of 75 point (in December), the BoC President was not happy and let them know publicly. No mincing of words either. Follow the BoC lead or face consequences.

 John Walsh is not just a smart man, he is also one that I TRUST (Remember the New Social Contract – and what is important to me?). In fact, he is the one I introduced to my fiancé to arrange her mortgage – need I say more?