The High ROE's Are Because HCG Has Under Reserved Risks The shorts point is that the high ROE's are because the company has under reserved risks. If you don't properly reserve losses then of course your earnings will look high. Another way is by selling bad loans to related parties so again your earnings look strong. So yes on the face of it HCG seems to be very strong. But perhaps that is misleading is the relevant question this and other articles are trying to ask.
The other way to get high ROE is to employ more leverage than your peers. If you think housing is an issue at any point in the future you have to look at the leverage of the lenders themselves. 1, 2 or even 5yrs of earnings can easily be wiped out in an hour if housing becomes a problem in Canada.