A letter to a friend,
During March Break, we enjoyed several spectacular hikes in the woods with the sun shining and few people around. The world seemed to be as it has always been.
But the world has changed and most of us are shell-shocked. A few weeks ago, we were going about our business as usual. The economy was good, March Break vacations were planned, our practices were humming away, and we enjoyed a stream of face to face meetings, events, and gatherings. Everything has suddenly changed.
One thing that has caught my eye is that many people are living and working as if this is a temporary bump. The Corona-virus/Covid-19 crisis is not a temporary inconvenience. This is a long-term restructuring of our society.
In the short-term, governments are shutting down places where people interact with one another. These include thousands of our clients, and potential clients, being shut down. Disease continues to spread because interactions are not shut down quickly enough, people are not taking the risks seriously, and there are many places which are difficult or impossible to close: grocery stores, medical facilities, etc.
The shutdowns mean that those who have assets and continuing income flow are comfortable with what amounts for them to a sort of extended sick leave. For the millions of Canadians with limited resources, this is a quiet period of shame, desperation, and appeals to governments and social agencies for assistance.
The banks and other financial institutions are offering an array of hastily-assembled payment deferral programs of up to six months. These vary, are not automatic, require applications, and only apply to owner-occupied properties. In some cases, these amount to little more than the usual late payment arrangements that lenders have always used when people run into trouble. It is had not been put clearly how these programs will affect credit reports.
Their phone lines are jammed. We are constantly in touch with our representatives with dozens of financial institutions and are doing our best to stay on top of what can be daily policy revisions. What works one day, doesn’t work on another day. Please call me for specific details.
The best mortgage interest rates are low, currently under 3%, but are jumping around erratically in response to the bond markets and other market conditions. Secondary lenders and business loan lenders are still available, although they are cautious and have cut back on risk factors. Generally, there has not been predatory pricing. Particular borrowers may find themselves downgraded to more risky, more expensive categories.
Governments are rushing out a multitude of assistance programs and EI programs. As above, there seem to be daily changes. At this point, governments have not pulled back any previous promises but have been slow—relative to the crisis – to deliver. From many personal conversations this week and what I see in the media, it appears that many people are assuming that governments are providing resources to people and businesses in need, when they are not yet helping.
Prior to giving advice in relation to specific client concerns, please consult with a number of live sources. This is a time when we are being told to self-isolate, but this should not extend to information and advice that can be obtained from reliable sources.