National Mortgage Delinquency Rates Are Misleading: Here's What's Actually Happening in Your City

本站添加: 2026-06-03

[00:00:00]Ontario just hit a 2-year high for publicly visible power of sale listings.

[00:00:07]>> And CMHC says that national mortgage delinquencies are only 0.24%.

[00:00:13]>> Okay, remain calm. That number doesn't seem to be panic-worthy.

[00:00:18]>> It is calm if you only look at the national average. Toronto delinquencies are up 45% year-over-year. Ontario is up 35%. Mortgage investment entities or mix, which we've talked about a lot on the show, are showing almost 2% delinquency rate and the public distress listings that we can see may only be a quarter or a third of what is actually happening.

[00:00:37]>> Wow, okay. A bit of a different story here, but this still doesn't sound like, you know, the US-style foreclosure crisis that we, you know, that's so well played out in like The Big Short kind of thing. We're not there.

[00:00:48]>> No, I think the smarter way to look at it is like stress is becoming visible.

[00:00:52]And actually, we're going to do another episode on a report that just came out from the Bank of Canada. I It has like the most ominous title. Hold on a second. I got to read this title.

[00:00:59]>> Consumer's path to mortgage delinquency.

[00:01:02]And they like literally did a full >> designing a path for you to get there?

[00:01:06]Like, what are they >> Yeah. But, you know, it shows like how it takes like 2 years to go from like rising credit card rates to rising mortgage delinquencies. So, >> Yikes.

[00:01:16]>> stress is becoming visible in things like that. And it's But it's it's not like it's it's very uneven. You know, we We're the Canadian real estate investor podcast and it's it's hard to talk about a Canadian real estate investor or Canadian real estate market. It's different by lender type, by property type, by city especially. Like some cities are hitting all-time highs and some are still dropping and 30% off peak. It's borrower profile. It is the capital stack or financing structure.

[00:01:44]>> Totally. I mean, so let's just say this is not us calling a crash or saying that there is a crash, but they're definitely the the valves for reading the pressure have definitely increased, right? It's a bit of a kind of pressure map, not not a crash.

[00:01:58]>> Yeah, I would say these things don't break you know, like the idea that there's like this big down leg where it's visible and it's one crash is just is not how it happens, right? It breaks city by city, like Toronto first. You see Toronto and then it's a leading indicator for other places where Toronto Capital was active and then it's, you know, mortgage file by mortgage file and mortgage lender by mortgage lender.

[00:02:22]>> Yeah, just on that note, Dan, before we get into the rest of the episode, speaking of lenders and analysis and even power of sales, which is of course what we're talking about today, go check out realist.ca.

[00:02:34]We've built a whole bunch of tools to track this stuff because this isn't just vibes or numbers. This is how you kind of build a real estate session, right, Dan? Well, I mean, definitely it definitely is, depending on who you talk to, but you know, not for us.

[00:02:48]>> Yeah, the, you know, go to go to realist.ca, especially if you're interested in what we're talking about today, cuz we have this thing on the site where you can go to motivated deals. You click on the motivated deals page uh and you can see foreclosure and power of sale listings across Canada. And we put in a monthly report on foreclosure and power of sales as well. So, if you're the type of person who is interested in in mortgage delinquencies, if you're the shark looking for the blood in the water, whatever, buy when there's blood in the streets, if that's who you are and you want to be able to search all of the Canadian properties that are listed for sale that say the words foreclosure, power of sale, even vendor take back. We have a vendor take back one, too, and motivated sellers. We have a map for that on realist.ca. Go check it out.

[00:03:27]Anyway.

[00:03:27]>> Yeah.

[00:03:28]>> Give me a Give me a rundown.

[00:03:30]>> Yeah, well, let's uh let's kind of get into the high-level version here, right?

[00:03:35]Obviously, we're talking power of sales.

[00:03:38]But what does this really mean, Dan?

[00:03:39]Give Give me a couple like the main signals that we're seeing here.

[00:03:42]>> So, there's two signals lining up.

[00:03:44]First, publicly visible power of sale listings in Ontario hit more than 308 April, which is the highest in, you know, they get of hit a peak and this is available power of sales. We're also seeing new power of sales monthly climb at a at a increasing pace. The highest in 2 years. And so, it gets attention every time like somebody does an article about this. And the Toronto Star did an article. Usually I'm the guy in the article. I wasn't in this one. But, you know, the And the the second one is that CMHC spring 2026 residential mortgage industry report, which we're going to cover in this episode, says that stress is rising, but they call it concentrated. And CMHC is going to be at our events, by the way. And and one of the people who's on the research team that does a lot of this stuff, is it Tanya that's coming to uh to Edmonton?

[00:04:24]>> There she's going to be speaking at on a panel at at at at at Edmonton.

[00:04:27]>> but uh yeah, it's either her or Led. But anyways, we've >> Well, but these are very busy, sought-after folks. So, >> Yes, we're lucky to have >> know, but we're always we're always happy when when regardless of who ends up showing up. But, their data point shows that national 90-day plus mortgage delinquencies rose from 0.21% to 0.24%. Still very low number. And and when I combine this later with that Bank of Canada data that I'm going to show you uh in a in another episode, kind of tells you why cuz it's probably still ahead of us based on their research.

[00:04:56]But, we're up like, you know, whatever, three three basis points. Still low.

[00:05:00]Nobody Nobody serious should pretend that that number right now is a foreclosure wave.

[00:05:06]>> Yeah, totally. But, I mean, I think with something like this, these kind of data points, the average is really hide the real story or kind of like what the what the looming mess could be, right? It's really kind of the devil's in the details. You got to unpack a statistic like that when we're talking about the like the entire Canadian market because in most cases when we talk in generalities about Canada, there are some of the usual suspects where certain things, whether good or bad, seem to be happening. So, break it down a bit more for me, Dan.

[00:05:35]>> Yeah, so if you you know, you would just want to look at it by geography, right?

[00:05:38]So, Toronto rose from 0.2 to 0.29, up 45% year-over-year. Ontario rose from 0.2 to 0.27, up 35% Barry went from.23 to.34 Windsor went from.15 to.22 Vancouver and BC also moved higher. So, I mean it's the markets you would expect but it's still just like you you got to pay attention to these data points if you want to see where the opportunities are forming.

[00:06:05]>> For sure. I mean like that that makes it pretty clear to me like the country isn't blowing up, you know, we're not going to see a bunch of people walking away from their homes but over leveraged people in mostly Ontario or BC expensive markets are definitely feeling the pain right now and some are forced to take desperate measures, right? I mean desperate times desperate measures. This this is a desperate [clears throat] time for some people that found themselves on the wrong side of a of a probably not a good deal to begin with.

[00:06:31]>> Yeah, it's a huge number like Canada has 2.4 trillion in residential mortgage debt as of January 2026. So, average mortgage payment hit $1,800 in Q4 2025 which is up almost 4% from a year earlier and household debt to income is 173.3.

[00:06:47]People's cash flow is getting impacted by what is happening in the economy and the housing market.

[00:06:51]>> Yeah, I mean cash flow is real one of the pillars of real estate, right? And cash flow kind of turns a paper problem into that listing power of sales means that the financial stack the capital stack that we've talked so much about broke and it it's it's broken enough that uh a lender is now enforcing that, right? I mean there are a lot of there's a lot of steps before you get to a power of sale.

[00:07:17]So, I mean kind of in in quick plain English here Ontario the you know, the thing most people call foreclosures is often a power of sale. Power of sale is a lender driven sale process that happens after that borrower has defaulted. Foreclosure on the other hand the stricter sense more more of a court driven process that that results in the lender taking title. It's it's less common um it's a bit of a slower process as well here in Ontario.

[00:07:46]You know, for the investors out there that are looking into deals like this, that distinction matters for all the main reasons that all a lot of the stuff matters, right? How much paperwork, how long does it take to get this kind of stuff done, and of course your negotiation dynamics differ now.

[00:08:02]>> Ben, you know, actually before Sorry, before you uh before you move on from that, like Ben Rabideau put out in his uh note recently that there was a lender who was saying like blaming the courts, like saying the courts are so slow right now that that's what's causing our mortgage uh or our uh >> Yeah.

[00:08:18]>> Yeah, like be- because they can't process, so they're accumulating bigger losses on their power of sales. So, like the courts are so backed up for power And well, and there's not a lot of experts cuz like we haven't seen power of sales for 20 years. So, >> Yeah. I mean, it's it goes back Yeah, well, it goes back to that similar problem of, you know, when the landlord tenant board here in Ontario was, you know, 6 12 months for a hearing. You know, time in real estate, whether you are buying, selling, negotiating, building, you know, have some kind of complicated capital stack with mezz or bridge debt, any of those things, you are directly impacted from a time perspective. Time in real estate is your best friend or your worst enemy. And a lot of these things, Dan, they they can go from a good deal to a bad deal if you wait too long, right? Or if you're forced for sure to to wait.

[00:09:07]>> Yeah. Yeah, I think that, you know, like that whole thing is the the summary of this episode, right? Like distressed listings are credit data. We're getting real-time data on what's happening in in Canada's credit market, our debt markets with a house attached to them, with an address or a real estate investment potentially attached to them.

[00:09:29]>> Yeah, totally. Okay, so let's look at the top five cities for power of sales over the last 12 months. And again, if you want any of this data, real estate CA, Toronto, Brampton, London, Ontario, New Tecumseth, and Markham.

[00:09:43]>> And that's in your Ontario subset. I actually have it for Canada as well from the market intel uh the distress report that we put out. I'm going to pull it up here. So, in in across Canada for total listing volume is Toronto, Vancouver, Surrey, Ottawa, Calgary, Brampton, Edmonton, which I found interesting. And I mean the reality is like you you know you have the geographic things. You you get that, you know, the the story. A lot of people are like, is it condos? It's actually not a lot of condos relative to like your more expensive stuff. It's the we cover Equifax data as well. Equifax data tells us that the people with the biggest mortgages are going delinquent the most, which makes sense intuitively, but you know, they should also be the richest borrowers if they can afford those mortgages or could have qualified for them. A lot of Brampton new build single family showing up. London and New Tecumseth have this kind of like different pre-con closing cycles that they're going through. So, you can't even treat like just the GTA or the lower mainland as its own blob, and much less every different city across the country.

[00:10:50]>> Totally. I mean like I think London is a good example for for those that don't that aren't familiar with London. It's a you know, very popular university town, a couple hundred thousand people off right off the 401, you know, a couple hours away from Toronto. And man, that place has gone through some serious investor cycles, Dan, right? Like I mean London was hot for a long time. Like everything from student rentals to property >> first social media market. Like since since like social media has been available for like real estate investors, that's been like the that was the market. And now it is the biggest jump up in unemployment rate in the country and is now the most unemployed >> Yeah, I mean it just goes to show, right? Like this stuff is all cyclical.

[00:11:32]Now, will London be a bad in I'm not even saying it's a bad investment or not. I still know people that are doing great deals in London. You know, is it tougher to get good stuff done right there or are there a lot of people hurting in in the London market? Yeah.

[00:11:43]Does that mean it's not going to come back in time? No, it just means operate or, you know, know know your portfolio and know your market. And that's because you know, you can't treat these individual markets the same, right? Yes, they all contribute to a data point, but the stress sellers don't always also mean distressed prices, which is I think is a really common misconception, Dan.

[00:12:07]>> Well, I think you have two types of sellers who don't want to sell at loss, right? You have you have like honestly, you have the the borrower, let's call it, like the owner of the property who maybe paid Yeah, who paid a a price that was too high and if they were to sell it at if they had to mark the price down to market clearing, they would have to sell for uh you know, they have to lose a hundred thousand or two hundred thousand dollars.

[00:12:31]If they go delinquent on the loan, they stop paying the loan, the lender also would have to absorb that loss and they don't want to absorb that cuz now that it's power of sale, they that that loss becomes a loss on their books. And um yeah, they can try and sue the borrower for it or whatever, but usually somebody in that position isn't really somebody you're going to get blood from a stone. And so some not it's it's it's actually not even like sometimes, it's >> [snorts] >> dis dis a distressed listing and the the prices can still be pretty stupid and it takes a lot of negotiation to get good deals on it. I sell a lot of power of sale properties and some of them are a mess, by the way. Like, we got one that that I'm working on right now, Nick. We've like this is the gift that keeps on giving this deal, eh? Like >> Oh my god.

[00:13:13]>> I think it What did it firm up like a year ago? And >> I I have never waited this long to get paid with anything. It is incredible.

[00:13:21]>> And but you know, this and and it's interesting. Like it's a guru in the Canadian real estate space is the seller of the property, which is >> And look, it's a good building. It's a It's a overall Yeah.

[00:13:32]>> They paid too much. They ran out of money on renovations.

[00:13:35]>> How a guru can >> didn't stabilize. And but then like, you know, the I'm not I can't I I guess there's I'm limited in how much I can say about this, but like >> You know, there's a when what happens in these examples, it the lender sells the property and then they find out this person owed a bunch of other people money and those creditors start showing up or something.

[00:13:57]There's a chain reaction that happens from a receivership or a uh What's the other thing called? A consumer proposal or bankruptcy. And then like the CRA's involved and whatever and all of a sudden the lender thought they were getting millions of dollars and they're actually getting nothing because everybody else is lining up to try and get whatever. Like in the CRA can come in, I think like swoop in last minute and get I think it's called like super super priority or something like that.

[00:14:19]>> And they're first in line or no money in first money out and get paid always, yeah.

[00:14:24]>> Best GB best promo structure on Earth.

[00:14:28]As a tax man, seriously.

[00:14:30]>> Yeah, anyway, I mean >> Go ahead.

[00:14:33]>> I was just going to say we're seeing some messy stuff right now, too, right?

[00:14:35]I mean like people assume this is good, but just to your point there, like you know, you you you've put together a complicated I know we're going to get into some complicated stuff now, but like you you put a complicated deal like this together, you know, the power of sale can look mediocre or messy on the surface level, but like I'd say more often than not you you get even messier because people really try to hold onto this stuff in most cases and you're right, like sometimes there's a bit of a Ponzi scheme where you know, like >> Yeah.

[00:15:03]>> this guy needs to be get paid, this entity needs to get paid, this private lender needs to get paid, this hard money lender needs to get paid. It just it's it's they can get really tough.

[00:15:13]>> So, tell me about It's not good, man.

[00:15:14]>> the kind of the second signal and and what what CMHC and like the breakdown of where we're seeing this stress.

[00:15:19]>> Yeah, so CMHC says that chartered banks are at 0.24% delinquency. Credit unions are actually lower, which is interesting. And I think this is a reflection that they are local market experts and know how to underwrite the deals there.

[00:15:32]>> right there. Yeah.

[00:15:33]>> Yeah. And then other non-bank lenders are 0.23%. So, you're like All Days, etc. Mix or more mortgage investment entities of all types are