Guest Speaker - Ralph Case

Rotarian Ralph Case is a Past President of Vancouver South.  He gave an informative talk on sub-prime mortgages.  These mortgages were given to people who shouldn't have been given a mortgage in the first place.  They had little or no down payment and were at lower interest rates - below prime.  The banks that gave these mortgages made their fees and then sold the mortgages to underwriters who turned them into mortgage backed securities.  These mortgage backed securities included sub prime and regular mortgages, a total market value of $30 Trillion.  The sub-prime mortgages being written off are a small part of this, $500 Billion, but this has made investors very scared and the stock market plunged.  The Canadian Bank Act is much stronger than the US and Banks here cannot lend to people who are not able to pay back the mortgage.  However if the market here flattens and interest rates rise there could be a problem here in Canada.