Feds Misguided in tightening mortgage rules

It's the old story, too much dept, blame mortgages..  
This is a subject that drive's me nuts..  Why does government routinely blame low interest, low risk, secured mortgage dept for the ills of Canadian consumer borrowing? With a national mortgage default rate of .047% what on earth are they thinking? Have they seen whats happening south of the border? Mortgage default rates are in outer space.. Are we seeing Canadians overwhelmingly using homes as cash machines? No.. Are we seeing a trend toward paying off mortgage debt faster? Yes.  Are we seeing Canadians using common sense and re financing high interest credit card debt into low interest secured mortgage debt? Certainly not lately.. There in lies the rub. Instead of leaving our already conservative mortgage regulations alone and clamping down on easy access, high interest credit cards, the feds have made it near impossible for the average home owner to re organize their debt by strangling the mortgage option. It's almost perverse..

TransUnion's quarterly analysis of Canadian credit trends has confirmed that we are listening...

After 26 straight quarters of increases in average consumer debt, we have just experienced 3 straight quarters of consumer debt reduction. Third quarter results show average consumer debt (excluding mortgages) of $25,594. However, year over year we are still up by 1.71% from $25,163 in Q3 2010.  That said, Canadians are actively working toward consumer debt reduction (with no help from the feds).  This is a good thing, no question.

Canadian banks are seriously exposed..
A report from Moody’s is vindicating brokers by pointing out unsecured debt – and not secured mortgages – poses the real threat to RBC and other Canadian banks.
"It's an uncertain world that we're living in,” said author David Beattie, VP and senior analyst at Moody's Investor Services in Toronto. “The macro environment is unclear as to what negative shocks may occur, and the banks that have positioned themselves a bit more aggressively against an increasingly leveraged Canadian consumer could run into problems in the event that we have some adverse economic developments."
To be perfectly clear: that possible bump in the road is unsecured debt, says the report. RBC, Scotia and CIBC are exposed to unsecured credit card debt at 24, 21 and 20 percent respectively.
Those levels are coming dangerously close to the 30 per cent of total managed assets Moody’s says would negatively impact their credit ratings.

It's a truly mixed message..
Canadians are bombarded with messages that we are too far in debt.. And others telling us we need to spend to shore up the economy.. Mortgages at 3.5% are bad but credit cards at 6% to19% are good? Wait, no, pay them off...hang on..no spend! While our financial leaders are considered near gods everywhere on the planet, they have missed the boat with regards to domestic debt regulations. At least this time around.  Helping Canadians manage through our current debt situation by making low risk, low cost, secured credit available to absorb the high cost unsecured consumer debt should be the focus.  I'm not suggesting that we all run to our Mortgage Pros and refinance our way to credit card freedom. I am however suggesting that regulations that look a little more like a conditioned refinance program aimed at reducing our exposure to high interest debt as well as reducing our bank's exposure to unsecured debt would have been more effective for both lenders and borrowers..

What's the moral of the story?
Without the correct tools, there is no fix. It's time we spent more energy developing the tools rather than telling the mechanic to "just figure it out, and do it now"