The Toronto Underground
Urban explorers feel attraction of subterranean world below
People you pass on the street undoubtedly entertain all manner of fantasies. Some, like Phil Goldsmith, think about the hidden world beneath them.''Sometimes, when I'm walking around in Toronto, I just for fun imagine that the ground plane is transparent,'' the 55-year-old architect says. ''People would get vertigo at some places, were the ground actually transparent, because some of the subterranean elements are so deep.
"What you're walking on feels like solid ground, but what you're actually walking on is this skin -- this crust -- over top of cavernous basements that go down five or six levels."
It's a city beneath the city -- the veins, arteries, ganglia and bowels of the surface world.
Parts of it are familiar to hundreds of thousands of Torontonians: the subway platforms and tunnels (rectangular where trenched, round where bored), the shops, food courts and passages of the PATH pedestrian maze, the parking labyrinths (some of them eight levels deep) under the big downtown buildings, and the below-track concourse at Union Station where, legend has it, live-at-home lovebirds in 1930s Toronto would cop a smooch while pretending to meet after long journeys.
Other parts are known to fewer: a truck elevator at First Canadian Place that takes highway-sized tractor-trailer rigs to a subterranean reception area beneath the city's tallest office tower; the cavernous loading docks below Eaton Centre; 17 radiation treatment machines in concrete bunkers under Princess Margaret Hospital; a long-abandoned Bay Lower subway station, available for movie shoots, where giant mutant people-eating cockroaches stalked but, as luck would have it, did not eat Mira Sorvino in the 1997 creature feature Mimic.
The maps to this world are the utility diagrams used by repair crews, engineers and architects such as Mr. Goldsmith, founder of a Toronto firm with a specialty in historical preservation.
"You look at these drawings and there's layers and layers of water pipes and sewer pipes and gas lines and hydro trunks and telephone trunks and storm sewers and sanitary sewers and so on," Mr. Goldsmith said. "There's just this vast array of pipes that form this organized but very, very complicated layer of spaghetti that goes down quite far in spots.
"If you want to think about the streets, the streets are like these little elevated causeways. If you joined all of the basements of all of buildings downtown, the real ground plane is down three or four storeys and the streets are these little causeways of dirt filled with pipes and wires snaking between all of these basements. I have fun with that one sometimes."
Visiting such places -- that is, trespassing on them -- is a passion shared by even smaller numbers, some of them within a sub-basement subculture known as urban explorers. One is a Toronto office worker with the Web name Ninjalicious who chronicles his feats in a self-published newsletter called Infiltration, "the zine about going places you're not supposed to go."
"I actually tried to run a contest in my magazine once that was called 'How low can you go?' " he said. "It was like, submit your story of the deepest you've ever gotten in Toronto, but the most interesting answers were just really deep parking garages, so it wasn't that interesting."
Like Mr. Goldsmith, he marvels at the tangle of phone lines, hydro lines, fibre-optic cables, steam pipes, water pipes, gas pipes, ducts, conduits, vaults, chambers, drains and sewers under the street, some of which he inspected during construction of the Sheppard subway line, now two years old.
"When they tore up Yonge and Sheppard, that was one of the most spectacular things I've ever seen," he said.
"Like how deep they had to dig to get at everything. The pit must have been seven storeys down at Yonge and Sheppard, and so full of so much stuff, wiring and piping.
"They just had to relocate all of it. First they had to move it all to the left and build and then they had to move it all to the right and build it back. I'm sure that's where most of the billions of dollars that were spent on that project were consumed, at that one intersection, because it was unbelievable."
He speaks not as a sidewalk superintendent, he specifies, but as one who repeatedly donned hard hat and safety vest to go down the hole. "Yeah, I followed that from beginning to end. All the time. There were some areas that I couldn't get to unless workers were there, so I had to do it during the daytime."
The underbelly of Yonge and Sheppard underlines one thing above-ground and below-ground Toronto have in common: Space is tight.
"Real estate is at a premium in the underground, especially in the downtown core," said Greg Atkinson, head of underground reactive repairs for Toronto Hydro.
"If we run into a very congested area, what we will do is try to make the cable chamber larger . . . but the designers are very pressed as to the dimensions they can make these things based on what's buried in the ground between gas and Bell and water."
December 29, 2004 in Mortgage Financing | Permalink | Comments (0)
The New Age of Mortgages
In today's day and age, the world is at our fingertips, literally. Every day more and more people are getting online and using the internet to do things they used to have to leave the house for. Computers are being used for everything; from tasks as small as researching homework projects to processes as large as buying homes. If you're a computer user who's looking to buy or refinance a home, you may be surprised to learn that the days of having to visit your local lending office for your mortgage are long gone.
If you're in the market for a mortgage, you may want to consider looking into using an online mortgage broker. There are a number of benefits to using this method of finding a mortgage. You can apply for your mortgage at your own convenience, the application process tends to be shorter, there are normally no application fees required, and the sites often offer tools needed to figure out what you qualify for and how much your monthly payments will be.
Because the application process occurs online, you can go to the website when you choose; 24 hours a day, seven days a week. This enables consumers seeking a mortgage to be free of the time constraints imposed on them by working with brick and motor lenders that adhere to scheduled business hours. There is no need to take time off of work or out of your already hectic schedule to apply for a mortgage when all you have to do is visit a single website in your spare time.
Another benefit of using an online mortgage broker is that often, the lenders the broker represents will compete for your business and you can see the different rate quotes that you are being offered. This allows you to choose the mortgage that is best for you and gives you more control over the entire process.
However, it is important for consumers to remember that the Internet is a big place, and a place where many predators like to take advantage of honest, hardworking consumers. If you do decide to pursue your mortgage online, make sure that you work with a reputable broker to avoid the problems that can occur if dealing with a less than reputable individual or firm. There are signs to look for to make sure you are dealing with a reputable company. Check with the company's local BBB or the online BBB to make sure there are no complaints against them. Also, if a broker wants you to pay them to apply online, steer clear of them. The actual online application should be free of charge.
November 20, 2004 in Mortgage Financing | Permalink | Comments (0)
Bank of Canada rate rises
Interest rates remain attractive to consumers
In a move widely expected by financial markets, the Bank of Canada hiked its trend-setting Bank rate again on October 20th. The rate rose by one-quarter of a percentage point to 2.75 per cent.
The Bank rate last increased in September 2004 when it stood at its lowest level in four decades.
“Homebuyers are still able to negotiate a discount of one percent or more off the posted rate, so interest rates are still at historically attractive levels,” says CREA Chief Economist Gregory Klump.
Klump notes that the five-year conventional mortgage interest rate for the third quarter gave back almost half its one-percent increase of the second quarter. The September posted rate stood at 6.3 per cent for a five-year conventional mortgage.
Financial markets have been anticipating an additional increase in the Bank rate in December 2004. However, a sustained increase in oil prices may weigh on consumer spending and economic growth next year, which could delay further Bank rate and mortgage rate hikes.
October 19, 2004 in Mortgage Financing | Permalink | Comments (0)
CMHC adds mortgage options
Changes could increase affordable rental housing stock
New mortgage insurance products could help to help increase the amount of private capital available to purchase homes and rental properties. Canada Mortgage and Housing Corporation (CMHC) has announced that the National Housing Act Mortgage Backed Securities Program has been expanded to include insured second mortgages for both home owner and rental properties.
CMHC has also announced that insurance will be available on second mortgage loans with floating interest rates. The enhanced insurance products were introduced October 1.
CMHC notes that there has been an increase in the volume of second mortgages, especially for rental properties. The federal agency says the decision to insure second mortgages recognizes the need for Canadian lenders to fund this expansion in the mortgage market.
Mortgage loan insurance for multiple unit residential buildings – such as apartment buildings, retirement homes and mixed-use properties – can only be obtained through CMHC in Canada. Rental investors can obtain mortgage financing for up to 85 per cent of the value of a property.
The new Rental Refinance product announced by CMHC provides rental property owners with the opportunity to access low-cost funds so they have increased flexibility to invest in their properties or build and acquire more rental housing. The federal agency says a floating rate enhancement for insured loans on rental properties provides borrowers with the choice of fixed or variable rate funding.
The changes support Realtor recommendations for more effective use of existing housing stock as an important yet often overlooked solution to affordable housing needs.
October 4, 2004 in Mortgage Financing | Permalink | Comments (2)
FCAC helps save on interest costs
Years of favourable interest rates may have lulled Canadians into thinking that low rates are all it takes to ensure they spend less on mortgage interest. Threats of rising rates may cause some home buyers and property owners to focus on rates when there are ways to save hundreds and thousands on mortgage interest.
Mortgage holders or mortgagors can reduce the total amount of interest paid over the mortgage term through a number of strategies when they sign on or renew, including:
- Decrease the amortization period
- Increase the size of your mortgage payment
- Switch to an accelerated bi-weekly mortgage payment.
Bi-weekly payments are equivalent to making an extra monthly payment each year. Using this approach, a C$100,000 mortgage held at 6 per cent interest with a 25-year amortization period, would be paid off approximately four years faster. With a shorter amortization period -- 20 years instead of 25 – even with regular monthly payments, interest savings would almost reach C$21,000. When negotiating for a new mortgage or a renewal, solid knowledge of the ins and outs of mortgages may help knock one per cent or more off the posted rate.
When you apply for a mortgage, Federal Cost of Borrowing Regulations require that a federally-regulated mortgage lender must indicate in your mortgage agreement or contract how much will be paid in interest charges over the term of the mortgage. Consequently, borrowers can determine how much impact variations in terms and conditions of the agreement could have on total interest before signing.
Want help getting the best financial deals possible when shopping for a mortgage or credit card, or making other financial decisions that can affect your real estate buying power?
"Consumers need to know and understand the real costs of mortgages before they can make an informed decision on the type of mortgage they need," says Bill Knight, Commissioner of the Financial Consumer Agency of Canada (FCAC). "What they don't know now could cost them thousands of dollars in unanticipated interest and penalty charges down the road."
The FCAC, a federal regulatory agency responsible for enforcing many of the federal laws that protect consumers dealing with financial institutions, operates through co-operation with other organizations, information programs, a toll-free consumer help line (1-866-461-3222) and its website, to promote greater awareness of the financial system and the rights and responsibilities of consumers.
To save as much on mortgage interest and related costs as possible, Knight suggests that consumers should start by asking themselves three questions:
- How long will I stay in this house/condominium?
- How quickly do I want to pay off my mortgage?
- How much can I afford to pay each month?
FCAC, funded through assessments on the financial institutions that it regulates, works to strengthen supervision of consumer issues and expand consumer education in the financial sector which, according to the FCAC mandate, includes:
- All banks.
- Insurance companies that are federally incorporated or registered.
-Trust and loan companies that are federally incorporated or registered.
- Co-operative credit associations that are federally incorporated or registered.
The agency, which has received more than 1,600 consumer inquiries and complaints about mortgages since it began operating in 2001, took common consumer concerns and questions into consideration when developing its mortgage toolkit. The kit includes explanations of mortgage terms, contract conditions and consumer rights as well as tips on how to pay off a mortgage faster. The "mortgage qualifier calculator" reveals whether you'd qualify for a mortgage loan, given your current financial circumstances.
FCAC may also help you reduce some of the consumer debt that can limit the size of mortgage you'd qualify for.
At the end of 2003, an estimated 74.3 million credit cards were in circulation in Canada which represents 3.1 cards for every Canadian over the age of 18. FCAC's online guide, "Credit Cards and You," incorporates recent changes to interest rates, service fees and other important credit card features such as credit balance insurance, provides current information for reducing credit card costs. Sections like "Managing Your Money" explain how to save with a credit card while the comparison shopping guide outlines key cost-saving features of more than 200 cards offered by 26 Canadian credit card issuers.
Start your comparison shopping with FCAC when you want answers to these and other financial questions:
- What should I know when opening a bank account?
- How can I find the best banking service package for my needs?
- What should I know when considering an investment product tied to the stock market's performance like index-linked deposits?
- What is the latest update on fees imposed by financial institutions for use of their ABMs?
- If I have a complaint about a financial institution, can FCAC help?
September 24, 2004 in Mortgage Financing | Permalink | Comments (0)
Mortgage fraud is rampant in U.S.
Fraud is running rampant in the nation's mortgage industry, with nearly three times as many reports of suspicious activity so far this year compared with 2001, a top FBI official said Friday.
"It has the potential to be an epidemic," said Chris Swecker, FBI assistant director for criminal investigations.
Through the first nine months of 2004, mortgage companies and banks have reported more than 12,100 instances of suspicious activity compared with only 4,220 in 2001. The FBI currently has 533 pending mortgage fraud investigations, compared with 102 in 2001.
Law enforcement officials say the lending and refinancing boom that accompanied record low interest rates in the past few years is a key reason for the increased fraud. The FBI has identified several "hot spots" around the country where fraud is especially prevalent, including Florida, California, Nevada, Michigan, Missouri and Illinois.
"You can find this anywhere in the country," Swecker told reporters.
One common mortgage fraud scheme is "property flipping," in which property is purchased, appraised fraudulently at a much higher price and then quickly sold. The mortgage holder is then left with property actually worth much less than the loan it issued.
Other schemes involve fake identities and credit histories, use of "straw buyers" to conceal the true buyer's name and forged loan documents.
Mortgage fraud is one of several financial crimes that the FBI has been targeting for extra attention in recent months. This effort, which involves 47 FBI field offices, has resulted in more than 151 charges since August in cases with potential losses to banks and other businesses of an estimated $3 billion.
September 18, 2004 in Mortgage Financing | Permalink | Comments (0)
Mortgage toolkit available online
A new online toolkit to help consumers understand the real costs of mortgages is available through the Financial Consumer Agency of Canada (FCAC). The kit provides information about mortgage terms and conditions, consumer rights and responsibilities, and tips on how to pay off a mortgage faster. See site.
September 13, 2004 in Mortgage Financing | Permalink | Comments (0)
Mull your mortgage
We can't say we weren't warned. Today the cost of borrowing heads up, after the Bank of Canada yesterday hiked its key rate by 0.25% to 2.25%. It was the first rate hike in 17 months.
Immediately, banks announced a 0.25% hike in their prime lending rate, which today jumps to 4% and which increases the cost of lines of credit and consumer loans. Variable rate mortgages are also up 0.25%.
And warning: Most analysts predict this is just the beginning of a tightening in monetary policy, which could see Canada's bank rate hit 2.75% by year-end, and 4% by the end of 2005 -- putting prime at 6%.
So, the big question on the minds of many Canadians is: "Do I lock in my variable rate mortgage now, or continue to play the short-term game?"
The answer: It depends on your risk tolerance, how much equity is in your home, if you can you afford to pay more for your mortgage, and if you like to sleep at night?
Bottom line is, Canadians' love affair with real estate has never been hotter -- and that is why in 2003 alone we took on another $138 billion in mortgage debt to finance 1.1 million home sales. In total, we owe a record $518.9 billion in residential mortgages.
And like a trend in the United States, Australia, the United Kingdom, and parts of Europe -- more and more of that mortgage debt is through variable rate lending, which can shave thousands and thousands off interest costs, especially in this environment of historically low central-bank rates.
But, as rate heads higher, interest savings are eroded and you could even end up not being able to afford the new mortgage at renewal time.
Particularly vulnerable are first-time buyers, who through a cash-back deal got into the market with a 0% downpayment and are paying a 3.4% insurance fee for their high-ratio mortgage. (Pssst, the insurance fee falls to 2.5% if you go in with a 10% downpayment, and there's no fee for a conventional 25%-down mortgage.)
For now, variable-rate mortgagees may not see a difference since payments remain the same. But, the reality is with higher rates, less is going to principal and more to interest. And at renewal time, the new mortgage payment could be a rude awakening, while you end up owing more than you expected.
"Think twice before booking a variable rate mortgage in a time of rising rates," is the advice of Toronto real estate lawyer Alan Silverstein. "The fixed-rate alternative provides you with safety, security and sleep."
But, other mortgage experts argue you can still win playing the short-term game.
Andrew Moor, CEO and president of Invis, an independent mortgage brokerage, says, "It's important to realize that the prime rate would have to rise considerably over the next five years to make the current variable-rate mortgage options unattractive."
CHEAPER RATE
As of yesterday, the best discount on a five-year fixed mortgage was 5.05%, but that could change today with at least two banks (RBC Royal Bank and CIBC) hiking their long-term rates by as much as 0.25%. Their five-year rate is now 6.25%, up 0.5% and 0.10%, respectively.
Meanwhile, even with yesterday's bank rate hike, you can still get a discounted variable rate mortgage as cheap as 3.25%.
According to Moor, during the past decade tightening by the Bank of Canada resulted in prime rate hikes, which averaged 2.05% over eight months. He argues if such a cycle were to begin now with yesterday's Bank of Canada rate hike, homeowners with a $175,000 mortgage would still save $1,299.45 over the next five years with a variable rate mortgage.
September 9, 2004 in Mortgage Financing | Permalink | Comments (0)
Bank raises benchmark rate
First hike since April 2003
The Bank of Canada raised its trend-setting Bank rate on Wednesday (Sept 08) for the first time in more than a year, and economists say Canada's current economic climate suggests more increases are on the way in the months ahead. In a move widely expected by financial markets, the central bank raised the Bank rate by one-quarter of a percentage point to 2.5 per cent. Before the increase, the Bank rate stood at its lowest level in four decades.
The move was matched by several chartered banks, which increased their prime lending charged to the banks' best customers. Royal Bank, TD Canada Trust and Scotiabank were among those that increased their prime rate by a quarter-point to an even four per cent. CIBC also increased several of its mortgage rates by small amounts, ranging from a quarter-point for some short-term mortgages to 0.10 of a percentage on longer-term arrangements.
In a statement, the central bank warned that Canada's growing economy is pushing up inflation and that will likely lead to higher interest rates. "Economic growth in the first half of this year was somewhat stronger than the bank had been expecting," the Bank of Canada statement said. “With the economy operating close to its capacity, monetary stimulus needs to be reduced to avoid a buildup in inflationary pressures.”
Since July's monetary policy update, the bank statement added, the Canadian economy has grown faster than originally expected, driven by surging demand for Canadian exports. At the same time, inflationary pressures have also mounted, largely because of high oil prices. “Looking forward, the bank expects aggregate demand to grow at, or marginally above, the rate of growth of production capacity,” the bank statement said.
Some economists were slightly surprised by the tone of caution in the bank's statement, but most still expect rates to continue to climb as the year progresses, barring any unforeseen economic shortfalls.
"This increase in the Bank rate will have little effect on housing activity," said CREA's Chief Economist Gregory Klump. "Administered lending rates, such as lines of credit and variable mortgage rates, remain at historically low levels despite having been pushed up by a quarter of a percentage point," he added.
"The conventional five year mortgage rate is expected to remain below seven per cent over the rest of the year, which is still very positive for MLS® activity," he said. "However, rising home prices and interest rates combined with a smaller pool of first-time buyers will likely result in an easing trend next year, so realistic pricing will remain key to quick sales," he cautioned.
The Bank of Canada, which cut rates earlier this year to stimulate the economy, last increased borrowing costs in April 2003. At 2 per cent, the bank's target for the overnight rate was just 10 basis points above the 1.9 per cent annual rate of core inflation, and well below the historic average.
The Canadian Labour Congress criticized the Bank of Canada move, suggesting the increase sends the wrong economic signal. "Why is the Bank of Canada slowing down the economy when inflation is still in check and there are still - in their own words - 'uncertainties around the economic outlook of the country"? asked CLC President Ken Georgetti.
September 9, 2004 in Mortgage Financing | Permalink | Comments (0)
Central bank sets upward trend
The Bank of Canada raised its key policy interest rate today while hinting that this could be the start of a new upward trend in borrowing costs.
The central bank increased its key overnight rate by one-quarter of a percentage point to 2.25 per cent, a move widely expected by financial markets.
Several chartered banks followed, raising the prime lending rate for their best customers by a quarter-point to four per cent, effective tomorrow.
Some mortgage rates went up slightly, and other consumer loans may also be indirectly affected.
Analysts suggested this won't likely be an isolated rate hike, as central bankers are closely watching Canada's healthy economic growth with an eye to controlling inflation.
"The communique accompanying the decision (by central bankers) sent a decidedly hawkish message which telegraphed that more tightening in monetary policy is in the pipeline," said Craig Alexander, senior economist at TD Bank.
He predicted the current 2.25 per cent overnight rate will be gradually increased to reach 2.75 per cent by the end of this year, continuing up to four per cent by the end of 2005.
That could pull the prime rate up to almost six per cent.
"We expect the (central) bank to continue to raise rates in quarter-point increments in an effort to reduce the degree of monetary stimulus in the least disruptive manner possible," said Alexander.
The Bank of Canada's chief concern is controlling inflation, and in its statement today central bankers warned that Canada's growing economy threatens to fuel too-rapid a run-up in the cost of living.
"Economic growth in the first half of this year was somewhat stronger than the bank had been expecting," largely due to robust demand for Canadian exports, central bankers noted.
Last week, analysts were surprised when Statistics Canada reported the economy grew by 4.3 per cent in the second quarter.
The agency also revised upwards first quarter GDP growth to three per cent.
Demand will probably continue at such strong levels that it could outpace production, driving up inflation, the central bank warned.
In response, it will need to cool things down slightly with steady interest rate increases.
"With the economy operating close to its capacity, monetary stimulus needs to be reduced to avoid a buildup of inflationary pressures," the central bank said.
Demand from a growing economy in United States could add to pressures here.
After hitting a soft spot over the summer, "the (American) expansion has regained some traction," U.S. Federal Reserve Chairman Alan Greenspan said today.
Economists believe the Fed will raise rates by a quarter-point later this month, after two similar rate hikes during the last two months that have boosted its key interest rate to 1.5 per cent.
Both economies still face some uncertainties, such as lingering high world oil prices.
That could impact the world's appetite, as well as domestic demand, for other Canadian resources and other products and services, the Bank of Canada warned.
However, interest rates aren't the only tool available to keep the economy from overheating.
A strong Canadian dollar can act as a bit of a brake and help the central bank do its job, said Ted Carmichael, chief Canadian economist for J. P Morgan.
"A stronger Canadian dollar could eventually temper the magnitude of policy rate tightening necessary to keep inflation close to the two per cent target."
Central bankers aim to hold core inflation, which excludes volatile food and energy prices, at about two per cent.
The core rate almost hit that target in July, when it jumped to 1.9 per cent.
The dollar has been steadily rising recently, jumping by three-quarters of a cent on Tuesday alone in anticipation of the rate hike.
It lost a bit of that by mid-afternoon today, slipping by 0.18 of a cent to 77.51 cents US.
The strengthening economy has shifted the Bank of Canada's focus from the rate cuts it made as recently as April when it was aiming to boost GDP.
Since trimming its overnight rate to two per cent - a low rarely seen in the last 44 years - growth has improved markedly.
September 8, 2004 in Mortgage Financing | Permalink | Comments (0)
