NDP leader Tom Mulcair has remortgaged his home 11 times since early 1980s

“New Democratic Party leader Tom Mulcair and his wife have repeatedly refinanced their home west of Montreal, gradually increasing the debt on the property over a series of 11 mortgages, land records show.
Mulcair’s office will not explain why the couple have loaded more and more financing onto the West Island home they’ve lived in since the early 1980s, saying only that it’s a “private matter.”
It is unclear why Mulcair would need to refinance the modest two-garage home in Beaconsfield so many times, bumping the value of the mortgage from $58,000 to $300,000.”


“They paid $64,000 for the home in 1983, with a $56,000 mortgage from the Caisse Populaire du Lac St. Louis at 10.7 per cent interest — the going rate of the day.
Every few years, new financing with the Royal Bank of Canada was registered on the property with mostly increasing values as the amount owing rolled over.
The couple obtained loans in 1984, 1987, 1988, 1990, 1996, 1997, 2001, 2003, 2006 and 2009.
Nearly a year after the last transaction, Mulcair filed a report with the federal ethics commissioner, saying that he taken a line of credit with his wife from the Royal Bank.
Under the MP’s Code of Conduct, material changes in a member’s assets or liabilities must be reported to the ethics commissioner within 60 days.
The value of the line of credit is not specified.
Today, Mulcair earns $157,731 annually as an MP plus a $75,516 stipend as Leader of the Official Opposition. When in Ottawa, he lives for free at the official residence, Stornoway.”


– from ‘NDP leader has remortgaged his home 11 times since early 1980s’, Ottawa Citizen via Vancouver Sun, 28 May 2012

NDP, Liberal, Conservative… the political ‘stripe’ here may or may not be important, that can be debated. We are of the opinion that many Canadian politicians, across all parties, are, like the general citizenry, overdependent on RE for their financial health.
That said, this piece of information certain won’t help NDP promises of being capable of fiscal prudence.
This anecdote illustrates:
1. a nice concrete example of ‘RE-ATM’; it is now commonplace, with escalating home prices, for individuals from all walks to allow mortgages to balloon over time, rather than to pay them down; many longterm owners still have considerable mortgage debt;
2. our politicians, like our general citizenry, have strong personal interest in the RE market remaining robust.
– vreaa

54 responses to “NDP leader Tom Mulcair has remortgaged his home 11 times since early 1980s

  1. Joe Mainlander

    It’s boomers vs. x’ers and y’er’s. The housing bubble has been the biggest burden on young (and middle age) BC families for the last 10 years, but not even a peep from the ‘champions of the people’ in this province. Heck, even Tim ‘Che Guevera’ Louis was quoted on this blog of not wanting prices to come down.

    Vive le revolution, baby. Just don’t touch my equity.

    • Well said.
      The dollar value on suffering for ones principles.

    • granite countertop

      Thanks for saying what I was going to say.

      If some megacorp caused the devistation the bubble has, the NDP and local leftists would be up in arms. Since they’re among the people profiting from it they can’t see it.

  2. Ben Rabidoux

    On a separate and entirely unrelated note, the NDP has decided to oppose OSFI’s proposed regulation changes which includes, among other things, a significant tightening in mortgage refinancing and HELOC lending.

    • hahaha
      Diplomatically put.

      It seems austerity loses to loosening, everywhere.

    • As the opposition it kinda makes sense to oppose things. Look to the Libs for some reasoned analysis. Brison asked some decent qs in recent finance cttee meetings.

      • The irony of playing to your constituency by opposing regulation designed to protect the public (especially the little guys and union folk) from their own lack of discipline is not funny though. I cannot imagine how they could come up with a worse idea as the bubble peaks. Yeah, I know….the average working guy with a mortgage might well be voting NDP Federally but surely the brain-trust at HQ can see how badly this will backfire on them as the bursting of the bubble is already taking place. Do those guys actually think it is wise for Canadians to be draining the last of their equity as we head into an inevitable recession and while house prices are falling? got to hand it to them….that is one very cynical move on their part.

      • Disenfranchising the working man through the accumulation of very human concept of debt, yet the root of the problem is either not understood or ignored by the polit supposedly solely charged with their protection.

        What’s their game, exactly?

      • Creating cannon fodder? Lots of money to be made in war.

      • Reply to Farmer: The electorate has Alzheimer’s. They don’t remember, and increasingly they don’t know what is going on.

  3. it looks like he can very easily afford his current mortgage, and then some – so whats the problem with him taking on debt?

    • You’re right in implying this is not an example of extreme overextension. The numbers are relatively small by Vancouver standards.
      But the story remains of interest because it seems to have become the norm for homeowners to not pay off mortgages; loans on house values have fuelled borrowing and spending. Mulcair is 58 years old; in generations past, this would have been a time of paying off the last of the mortgage and saving/preparing for retirement. Instead, a likely significant portion of his net-worth is in leveraged RE.
      And, as we say, this is a ‘conservative’ (haha) example.
      There are some real whoppers out here on the Debt Coast.

      • Beyond Debt

        I bet if Mulcair (and his wife) wanted to, they could pay their mortgage entirely with great ease almost instantly. I don’t know their personal reasons for refinancing and they are none of my business. This is a mountain made out of a molehill.

      • Beyond Debt

        BTW I know a successful businessman who makes over a million a year and he still holds a mortgage. But the mortgage is in his RRSP (I forget the detail) so he is just paying himself. Only in debt to himself.

      • Beyond Debt -> Quite possibly correct about them being able to pay it off. But they haven’t. It is still representative of how homeowners are approaching mortgage debt.

        Nobody is really making that big a deal of it, it’s more a small mound made out of a molehill.

      • “Instead, a likely significant portion of his net-worth is in leveraged RE.”

        Mulcair is the leader of the NDP making over 200K per year, and has been a provincial and national politician for nearly 20 years, and was a lawyer before that. I seriously doubt that his 300K home represents a “significant portion of his net worth”. His provincial and national pensions combined are probably worth a couple of million alone…

        As BD alluded, there are many reasons for taking on debt, even when you can afford not to.

      • Maybe he (Mulcair) is doing what most ppl are doing right now, faced with low interest rates, and not bother paying it down (…as fast as possible) since its not really taking a bif chunk out off their incomes.

  4. I don’t know how typical this is, actually. Eleven times is extreme, especially considering the relatively low amount of the original debt, how recent some of the loans are, and how high Mulcair’s earnings have been (he as been a lawyer, MP and university professor). I know absolutely nothing about these peoples’ personal lives, but if you just gave me the info without any names, I would suspect one or both had some sort of addiction, like gambling or compulsive spending.

    It does give one pause. How can someone run a country if he can’t even reasonably manage his personal finances?

    • I personally felt uneasy ever since I read that story. I mean, Thomas Mulcair should know better. Something just doesn’t add up. What on earth could have possibly justified that many re-financing (with that level of earning)?

    • Reality Check

      Ever hear of the Smith Manoeuvre, or tax-deductible interest?

      • Anonymouse

        I think you may have hit the nail on the head, Reality Check.

      • Hey speaking of which,
        How do those thingies work when loans are amortizing instead of IO? Asking for a friend.

  5. I find this a really interesting anecdote. Given the Mulcair’s income level and the mortgage amount, they could almost certainly have paid off the debt with relative ease. But they didn’t. Instead they loaded up with more debt multiple times. Not a financial disaster per se because they can (presumably) service the debt and the loan is secured on an asset of some value. Maybe just indicative of the “HOME=ATM” attitude of some owners. What is more concerning to me is that the official leader of the opposition seems to show a lack of prudence in his personal financial affairs. I miss Jack.

  6. Reality Check

    How is this not just a case of a welathy individual getting some tax-deductible interest?

    This seems like a smear from Team Harper.

    How mush you want ot bet that even Flaherty and others have investment HELOCs?

    • Mortgage interest in Canada is not tax deductible.

      • it is if you use the money to invest in something.

      • Reality Check

        not mortgage interest – HELOC interest.

        #fail

      • Anonymouse

        Observer, the idea is that you get a re-advance able mortgage. Whenever you have any equity you draw down on it and use the cash to invest in an income-generating asset (such as stocks that pay dividends), and use said income to pay off the mortgage. Over time you end up with a large tax-deductible investment loan and zero mortgage.

  7. Renters Revenge

    The real story is that MP salaries have gone up only (tee hee!) 213% since 1983 but the mortgage value, in this case, has gone up a whopping 436% in the same time period.
    http://www.parl.gc.ca/ParlInfo/Lists/Salaries.aspx?Menu=HOC-Politic&Section=03d93c58-f843-49b3-9653-84275c23f3fb&Year=1983

    Trying to find the home value for a better comparison, but assuming it is “worth” well more than the $300k mortgage amount.

  8. an ATMity-field horror! … that movie ruined dutch colonials for me … can’t go near one

  9. If they are very good investors they can certainly make more than the 4% interest they are paying on the loan. That would be the optimistic guess as to what they are doing. But the gut guess is always something grimmer.

    • something about 11 refis in 30 yrs screams non-surgical precision 🙂

      • Reality Check

        Huh?

        If you are getting tax deductions for the interest, why not keep re-upping as the home value grows?

        Smith Maneuvre is a variation of this approach.

      • rc, it’s not a really a deduction … you just pay a bit less interest … how much are refi costs X 11? … NOBODY who’s that well off or smart with their money works up a $300k loan against their house when they should have been clear by now … this is just levering up on cheap credit … hope they’ve got it figured out for when cheap credit goes away … the play on the housing credit cycle is unload the asset into an inflated market and redeploy into undervalueds

  10. tick-tick-tick … http://www.bloomberg.com/quote/!SPN:IND … wait … when did LTROs end and what are they buying for $24B this week? … remember when ‘they’ said this was just greece? … i think ‘they’ are now saying JGBs, bunds and USTs are different

    • Oh, GreatChubster… Imbibe or Infuse your favourite ‘poison’… then click Play… for a brief lesson in Ontology from a Disciple of TheMonkeyKing….

      PS – just remember this when observing the WavyCharts… or watching FoxNews in a HillyBilly HonkyTonk… or _____ ????

      • Nemesis thanks for your book recommendation “The Dictators handbook” picked it up yesterday almost finished reading it. Any other suggestions for good books.

        Here is a link to a video by the books authors explaining their ideas.
        http://www.ustream.tv/recorded/19007439

      • thank you sir_nem … aside – it seems we are in the midst of a new kind of nuclear proliferation … being a frequent jp diner, i can now appreciate better the role_of_spicy_tuna in relation to heightening of super powers, cognitive, sensory and otherwise … highly recommend (pffft!) … http://tinyurl.com/89772nu

  11. chumpay le chump

    that is right near where i grew up. Beaconsfield was totally affordable back then and a great place to grow up during the 80s.

    The question is why is this front page news? could it have anything to do with the recent surge in NDP support?

  12. notsellingyet

    Perhaps the Smith Maneuver for Mr. and Mrs. Mulcair?

    • Reality Check

      ding ding ding.

      You win the prize.

      You obviously are too smart for the 99% of Canadians who believed this crap when published.

  13. I’m not really a Mulcair or Federal NDP supporter by any stretch – but it doesn’t seem like he and his wife are doing anything out of the ordinary.

    Yeah, by my reckoning he shoudn’t have a mortgage at all on the house, but I could say that about practically everybody I know these days who has a property. With his income level that mortgage payment must seem like peanuts at current rates…..

    I think Ben’s comments about the NDP’s stand w.r.t. OSFI changes are much more apropos than whatever their Leader owes on his house. That’s chump change….

  14. Carioca Canuck

    If any of you tried to cash “Reality Check” it would bounce………

    Just like my lying landlords obscuring the thruth about their intentions in the other thread, if this “private matter” of Mulcair’s mortgage finacing was really about him being a prudent and intelligent fiscal manager utilizing sophisticated tax reduction techniques and maximizing his equity to create capital gains that have been available to all Canadians in the same position, he’d certainly have no issue about it being stated publicly OUT OF HIS OWN MOUTH. Would he ????

    But the fool cannot even speak for himself…….imagine an NDP’er making money in the markets doing what has been indicated here…….it’d be heresy to the politburo….eithre way he’s boxed in….he’s either been a lousy fiscal manager for 25 years, which is my bet, or he’s just like the conservatives, but dressed in red underwear and using Stalin’s birthdate as his Swiss bank account PIN card password..

    • Reality Check

      I personally don’t care for the NDP, but this article reeks of the Harper stench. Character assassination anyone? Can’t wait for the attack ads!

  15. remortgaged 11 times over 30 years, that’s amateurish by Vancouver standards!

  16. Mulcair was once a Provincial Cabinet Minister in a Quebec Liberal Government, also once successfully sued by a Pequiste MNA… maybe that’s why he remortgaged the house…. from Wikipedia:

    “Mulcair accused former Parti Quebecois minister Yves Duhaime of influence peddling. Duhaime filed a defamation suit in 2005 and Mulcair was ordered to pay $95,000, plus legal costs….”

    Ouch!

    😉

  17. Off topic—Australian home sales down 24.2% y/y in April http://tinyurl.com/btlbd6r

    Same decline. Different country. Toronto is next.

  18. It’s just SmithM. You want your mortgage to be as big as possible and you want to charge yourself with largest interest rate that the CRA will allow you (there is a max). This allows you to pay yourself a return into your RRSP-held mortgage and make 5% or 6% or whatever the max is. The banks frown upon it because it’s a bit complex to setup and they charge you to do it. The CRA hates it because it’s good tax planning and gives you tax deductible mortgages when we shouldn’t have such. If you don’t know anything about it, start reading.

  19. “The couple obtained loans in 1984, 1987, 1988, 1990, 1996, 1997, 2001, 2003, 2006 and 2009.”
    ………..
    It wouldn’t surprise me that they own other properties. A very senior colleague also refinanced his home repeatedly to acquire new properties. I knew about his acquisitions, as I was asked to witness some documents. Freaked me out, the 7-digit loans.

  20. Robert Dudek

    Not paying down your debt is one thing. But allowing it to increase while earning a huge salary is another. I’m willing to bet it is one of three things:

    1) massive cash is being invested elsewhere
    2) someone in the family is a spend-a-holic
    3) someone in the family has a gambling or drug addiction

  21. Smith manoeuvre?
    Possibly, but more likely a family that found it easy, with most of the refinancings, to keep a bit of cash back to help with ‘x’, where ‘x’ = recent/upcoming expenses.

  22. Pingback: “A very senior colleague refinanced his home repeatedly to acquire new properties. Freaked me out, the 7-digit loans.” | Vancouver Real Estate Anecdote Archive

  23. AND ….. this monkey wants to run Canada ! to do what increase our debt 11 times what it is now ….. i don’t think so ..bye bye , cant live off 200k a year on o mortgage even at 300,000$ would only be about 1300 a month something very wrong !

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