RE:RE:RE:RE:RE:RE:RE:What is it? Worries me a bit ......pasternak94 wrote: Fair enough, however GICs are the only depositor base left.
By the end of the year, $7B in GICs will have been able to be withdrawn as they mature. So far, HCG is bleeding $55M/day on average from these GICs that we can assume are rolling over every single day.
They've lost $775M from there already. $55M/day, or even losing half of that is absolutely disastrous for the company. They will have to sell off the loan book because OSFI won't let this continue.
OSFI will do whatever it takes to cover all of the creditors. They do not care about the shareholders. If OSFI needs to tell HCG to liquidate at discounts just to cover GICs flying out the door everyday, they will.
True except they have already changed their buisness model. They know their reputation is hurt and will be in the buisness of SELLING mortgages, which is actually a really good idea. It will allow HCG to sell mortgages the banks cant approve to the banks at a higher interest rates.
Then.... as this blows over and HCG is still foating with their new buisness model they can get fair value for teh company. 24-30
Just to give you an example. As a buisness owner I couldnt get a mortgage for almost 3 years after I started my company except through a secondary lender.
Now, my employees who worked for me could get one after three months.... but because I was self employeed.... 3 years. But a secondary lender will.... I am more likely to pay my mortgage than my employees but I couldnt get a mortgage.
My brother makes 250k a year doing shut down work. Every year same thing. but he gets laid off 3-4 times a year. Bank wont give him a mortgage. secondary lender will.
Huge settlement for disability... same thing. Need a secondary lender.
These examples along with the ampount of downpayment you need explains why their defaults are so low