Investing

HCG.T - Home capital Group

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  • Nov 21st, 2017 1:56 pm
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Newbie
Apr 12, 2015
76 posts
42 upvotes
Shady side of Narnia
burnt69 wrote:
May 14th, 2017 11:25 pm
Just because borrowers are 'prohibited' from walking away from homes doesn't mean that they won't. Toronto is full of families who own dozens of homes, heavily on credit, as they serially refinanced them to buy even more real estate. These families, as the RE cycle turns, will almost certainly default. And since RE makes up nearly all of their assets, it logically follows that there won't be much blood to be gotten from them.

I personally believe HCG was a significant participant in this kind of lending.

As for the uninsured mortgages having a LTV of 60% (I've heard 67%), that's HCG's claim, but it depends on whether they're using credible "values" for the LTVs. Its not unheard of for certain appraisers to appraise rather generously. Quoted real estate values may be inflated by factors such as the sales mix. The fact that HCG had to severely over-collateralize their borrowings with HOOPP indicates a lack of market credibility for claimed LTVs.



Are we even sure that the mortgages were sold without off-balance-sheet guarantees to MCAN? I'd like to see the paperwork. If HCG "sold" the mortgages, but remained a guarantor...
Completely wrong, they big banks offered them the same terms as equitable. They were just too late in the process with HOOP to accept them. Non story.
popbottle wrote:
Apr 19th, 2015 1:41 am
I hereby and solemnly declare, with a touch of formality, and bits of pomp & circumstance, with a red wax seal, +1
Deal Addict
Mar 12, 2010
1276 posts
46 upvotes
Aurora
What happens to ones morgage if HCG were to hypothetically fold?
Newbie
Apr 12, 2015
76 posts
42 upvotes
Shady side of Narnia
tido88 wrote:
May 15th, 2017 11:36 am
What happens to ones morgage if HCG were to hypothetically fold?
Your mortgage is sold off to another interested company and everything continues for you as normal. I believe there is a government agency that is responsible for coordinating with you to make you aware of the new relationship, but don't quote me on that, it could be the gov't, or the seller, or the buyer.
popbottle wrote:
Apr 19th, 2015 1:41 am
I hereby and solemnly declare, with a touch of formality, and bits of pomp & circumstance, with a red wax seal, +1
Sr. Member
Oct 6, 2015
810 posts
415 upvotes
tido88 wrote:
May 15th, 2017 11:36 am
What happens to ones morgage if HCG were to hypothetically fold?
Someone would buy the mortgage and/or the administrator of HCG's estate might get really mean.

Read your mortgage documents sometime. The lenders have some pretty extraordinary powers to force even early repayment. For example, if they feel you aren't doing all maintenance to keep the property's value up, they have the right to force you to do so. They can even, at your expense, come and inspect the property. And miss a payment, even by a day, and they can declare the entire mortgage in default and demand accelerated repayment.
Sr. Member
Oct 6, 2015
810 posts
415 upvotes
tesomd wrote:
May 15th, 2017 8:43 am
Completely wrong, they big banks offered them the same terms as equitable. They were just too late in the process with HOOP to accept them. Non story.
So let me get this straight. You're claiming they took a deal with HOOPP, with the associated conflict of interest (or at least the appearance thereof) instead of going with a deal that was offered by one or more of the big banks at a dramatically lower cost?

I have a hard time believing that. If that were true, why aren't they doing so right now? Taking the sort of deal that Equitable took, if available today, and paying off HOOPP probably would be cheaper at this point than keeping the HOOPP funding.
Jr. Member
Nov 30, 2015
154 posts
29 upvotes
Toronto, ON
burnt69 wrote:
May 15th, 2017 1:41 pm
So let me get this straight. You're claiming they took a deal with HOOPP, with the associated conflict of interest (or at least the appearance thereof) instead of going with a deal that was offered by one or more of the big banks at a dramatically lower cost?

I have a hard time believing that. If that were true, why aren't they doing so right now? Taking the sort of deal that Equitable took, if available today, and paying off HOOPP probably would be cheaper at this point than keeping the HOOPP funding.
Like he said the deal wasn't available at the time and seconds mattered at that point to restore some confidence in the stock. What would you do if your business imploded? Wait for options that may never materialize as your value shrinks to nothing or take what is in front of you that you have some control over. Management did say they were looking into options in terms of retiring the loan going forward. At this point they have some short term relief and are going to prudently measure all of their options and what their go forward business strategy is going forward. Cooler heads have prevailed.
Newbie
Feb 27, 2015
74 posts
38 upvotes
Newcastle, ON
Home Capital Was Hours Away From Collapse: Report
burnt69 wrote:
May 15th, 2017 1:41 pm
So let me get this straight. You're claiming they took a deal with HOOPP, with the associated conflict of interest (or at least the appearance thereof) instead of going with a deal that was offered by one or more of the big banks at a dramatically lower cost?

I have a hard time believing that. If that were true, why aren't they doing so right now? Taking the sort of deal that Equitable took, if available today, and paying off HOOPP probably would be cheaper at this point than keeping the HOOPP funding.
Newbie
May 2, 2017
6 posts
2 upvotes
Arrgh wrote:
May 15th, 2017 9:22 am
Yap, HCG appears to have stabilized.
It still makes me uneasy to see the deposit balances table in that release showing decreasing balances. The HISA balance is still downward trending, even if not as intense as it might've been earlier. The Oaken and GIC deposits are still depicted as decreasing by millions or even tens of millions nearly every day.

Maybe it could be argued that a relatively steady decline is a "stabler" situation than the steep declines that were happening before, but that's still a very uncomfortable sort of "stable" in my opinion.
Newbie
Apr 12, 2015
76 posts
42 upvotes
Shady side of Narnia
burnt69 wrote:
May 15th, 2017 1:41 pm
So let me get this straight. You're claiming they took a deal with HOOPP, with the associated conflict of interest (or at least the appearance thereof) instead of going with a deal that was offered by one or more of the big banks at a dramatically lower cost?

I have a hard time believing that. If that were true, why aren't they doing so right now? Taking the sort of deal that Equitable took, if available today, and paying off HOOPP probably would be cheaper at this point than keeping the HOOPP funding.
As has been proven by the subsequent replies, most people who are feeling negative on this are people who don't do their reading. Front page of the online globeandmail this weekend.
popbottle wrote:
Apr 19th, 2015 1:41 am
I hereby and solemnly declare, with a touch of formality, and bits of pomp & circumstance, with a red wax seal, +1
Deal Fanatic
Jan 27, 2006
6486 posts
1683 upvotes
Vancouver, BC
WayTooCorny wrote:
May 15th, 2017 3:24 pm
It still makes me uneasy to see the deposit balances table in that release showing decreasing balances. The HISA balance is still downward trending, even if not as intense as it might've been earlier. The Oaken and GIC deposits are still depicted as decreasing by millions or even tens of millions nearly every day.

Maybe it could be argued that a relatively steady decline is a "stabler" situation than the steep declines that were happening before, but that's still a very uncomfortable sort of "stable" in my opinion.
According to BNN, HISA have stabilized. I suspect that since time to stabilization was relatively quick, HCG should see HISA deposits actually increase sooner rather than later.
Jr. Member
Nov 30, 2015
154 posts
29 upvotes
Toronto, ON
craftsman wrote:
May 15th, 2017 5:12 pm
According to BNN, HISA have stabilized. I suspect that since time to stabilization was relatively quick, HCG should see HISA deposits actually increase sooner rather than later.
Yep the increase will be obviously be much slower than the decrease but as folks start to see the attractive rates they will start to move back or they will attract new customers. Hopefully after the OSC review in June this will happen even faster.

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