FLIP CitiesWhich lender will pay to buyout this Mess:
Home capital was not funding to genuine REAL home buyers all over Canada
maximum mortgages of Hone cap are in Toronto and Vancouver
both are being called FLIP cities in Asian business magazines
Home capital was funding to international students, temporarily visa holders, very
marginal low income groups or second mortgages after banks collateral or very new immigrants
Set up fees were 2/3 percent:
brokers were making money and Home capital was cashing
now any bank/buyer looking at mortgages purchase portfolio will see concentration Risk
that risk of concentrated mortgages in FLIP cities:
what is economy activity in Vancouver, Nothing except new construction
So buyer will twice think before giving offer:
in US home crisis buyouts were happened at 20 percent of book value
in Arizona or Las Vegas or California markets or Texas:
So no immediate lender will be desperate to buy this junk
mortgagee business in quick months:
this will take time may be 6/8 months:
Real Canada also lives in small towns but FLIP cities
were the only focus of home capital funding:
best estimate is buyout will be st $4 levels so
stepping in at low $3 is not bad idea if any one really interested:
meanwhile pension funds and HOOP will keep the market interest on for few weeks to keep at $8 range and soon we will see $6 and then $4 on year end:
Which lender wants to buyout those mortgages which are under
investigations, this is not brain thing: wait and see should be best