Real Estate

Cracks appear in Toronto’s housing market as alternative mortgage lender Home Capital drops

  • Last Updated:
  • Apr 30th, 2017 11:31 am
Deal Addict
Jul 3, 2007
4153 posts
4626 upvotes
Toronto
dont need to pray....watching it unfold live.....
Jr. Member
User avatar
Nov 21, 2009
193 posts
75 upvotes
The weak hands will sell. The market is just too hot, lots of immigration happening.
Deal Guru
Feb 9, 2009
12381 posts
11307 upvotes
just cause the company crashes doesnt mean people will start to default on mortgages...the portfolio will be picked up at a big discount by another bank. people cant just walk away from their mortgage obligations.

If we see a big 5 bank in trouble then I would start to sweat...
Deal Guru
Feb 9, 2009
12381 posts
11307 upvotes
The funny thing is the ontario securities commission caused the panic and sell off lol... good ol' gov't
Deal Addict
Jan 26, 2016
2240 posts
2272 upvotes
Toronto, ON
joepipe wrote: heres one for the condo pumpers.... selloff in progress

http://www.cbc.ca/news/business/rent-co ... -1.4084384
Makes zero sense. Most landlords make their calculations based on today's rents, and are happy to not increase rates if they have a good tenant. They have been pumping these news articles written by know-nothing journalists since 2008. They have been printing about impending doom, condo bubbles, over-building, etc., and none of it came true.

When the rent covers the mortgage+util+tax, the landlord is "making" the principle portion, paying down the mortgage. That is never considered in these calculations, which is a major interest on the original downpayment.

And in 25 years, the landlord's mortgage will be fully paid off, and it's pure profits.

P.S. Condo prices are on the rise even after the gov. announced changes. At least in North York/Richmond Hill/Markham areas. Condos selling like hot cakes there.
Member
Jan 9, 2012
314 posts
336 upvotes
I will wait for some further weakness to show up before shorting the banks.
Market goes up in staircase comes down in express elevator if they do.
There is a lot of money to be made within short window of opportunity.
Deal Addict
Jan 17, 2006
2496 posts
2740 upvotes
Toronto
Poor OP, can't sleep, can't eat, waiting for crash.
Cut your losses and buy something smaller, before it is too late for you.
Newbie
Apr 11, 2017
52 posts
49 upvotes
jonkoktosen wrote: So, did you buy any?

They will make fine collectibles, along with your BRE-X and Nortel certificates:

Shares in alternative lender Home Capital plummet more than 57%

Face With Tears Of Joy

Image
No haven't bought yet but will start accumulating soonish.

Low default rates, asset prices are supportive. Risk is run on deposits. Worst case they will be acquired by entity that has capital to keep the wheels greased.

Tempest in a teapot
Newbie
Dec 13, 2016
22 posts
12 upvotes
And what can happen in the worst case scenario? Is it possible the borrowers of that lender to be asked to pay off their mortgages immediately?
Banned
Dec 5, 2015
1338 posts
451 upvotes
Thornhill, ON
Terala wrote: And what can happen in the worst case scenario? Is it possible the borrowers of that lender to be asked to pay off their mortgages immediately?
No
Newbie
Apr 11, 2017
52 posts
49 upvotes
Terala wrote: And what can happen in the worst case scenario? Is it possible the borrowers of that lender to be asked to pay off their mortgages immediately?
Worst case scenario - Home Capital is insolvent due to liquidity issues (depositors flee). Either the company or just the loan book is sold off. The existing mortgages will continue to be serviced.

All in all, existing borrowers should not be worried. It's not as if their loans can be recalled. The OSC and the media has needlessly caused a bank run - sad but they've really harmed this company and shareholders by fearmongering over some disclosure issues from 2015 which have yet to be proven in court but has already been internally dealt with by the company.
Deal Addict
Oct 29, 2010
4475 posts
811 upvotes
Doubleshot wrote: This again? That loser didnt retire..he lost all his money in managed "fund" by making bad bets

Lol
Where have you seen that he didn't retire and lost everything?
This article is from June 2016, almost a year ago and he was able to predict HCG...

Makes me want to rethink my strategy of buying into a pre construction condo for investment that is being released for the public in the next week or so.
Deal Addict
Jul 3, 2007
4153 posts
4626 upvotes
Toronto
Terala wrote: And what can happen in the worst case scenario? Is it possible the borrowers of that lender to be asked to pay off their mortgages immediately?
Yes if no one wants to buy that book of mortgages.....happened with Accredited mortgages in 2008 when they went bankrupt , they were doing 107% mortgages and after the crash, clients were forced to refinance when no one wanted the book of disastrous mortgages and their LTV's...

https://www.canadianmortgagetrends.com/ ... ome-2.html
Deal Guru
Feb 9, 2009
12381 posts
11307 upvotes
joepipe wrote: Yes if no one wants to buy that book of mortgages.....happened with Accredited mortgages in 2008 when they went bankrupt , they were doing 107% mortgages and after the crash, clients were forced to refinance when no one wanted the book of disastrous mortgages and their LTV's...

https://www.canadianmortgagetrends.com/ ... ome-2.html
First we have to see if the Mtg will be bought out (most likely as there is only a 0.54% default rate in home trust mortgage portfolio)... upon renewal the new lender can decide to allow to re-new the mortgage or not... if the customer has been paying on time I don't see why the lender would not renew the mortgage, especially if cmhc insured.
Banned
Dec 5, 2015
1338 posts
451 upvotes
Thornhill, ON
flafson wrote: Where have you seen that he didn't retire and lost everything?
This article is from June 2016, almost a year ago and he was able to predict HCG...

Makes me want to rethink my strategy of buying into a pre construction condo for investment that is being released for the public in the next week or so.
https://www.wsj.com/articles/SB122876612229588889

That moron ran Cooper River Capital...and he made bad bets in 2008 and lost all it's assets in the Lehman collapse

So if you call losing a billion dollars and bankrupt your fund and forced to work as a chicken farmer because you're unemployable retirement..sure
After losing more than half its value in the past couple months, the Larkspur, Calif., hedge fund is liquidating and returning funds to investors
Last edited by Doubleshot on Apr 30th, 2017 11:29 am, edited 2 times in total.
Deal Addict
Jul 3, 2007
4153 posts
4626 upvotes
Toronto
Sanyo wrote: First we have to see if the Mtg will be bought out (most likely as there is only a 0.54% default rate in home trust mortgage portfolio)... upon renewal the new lender can decide to allow to re-new the mortgage or not... if the customer has been paying on time I don't see why the lender would not renew the mortgage, especially if cmhc insured.
Hometrust has good LTVs in general 75% or less on the ALT side

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