RE:RE:RE:Why Home Capital still has big problems?except that given the fact that this has been an ongoing situation of alleged fraudulent activity since 2014/2015- so that is up to 30 some months, that the insurers would be seeing an uptick of some sort if there was a higher amount of fraud - either in the industry or from one lender. And once the lender has a bad reputation the insurer would just stop taking that client's mortgages.
This is the part that makes no sense whatsoever. If the mortgages underwritten by HCG are so poorly underwritten as Cohodes and others are contending, then Should there not be tons of claims for the past 30 months? Why are the insurers saying that there are no sigificant problems at Home Capital and that they continue to provide insurance. If the insurer knows that there is a potential for more likelihood of fraud then they would providing insurance immediately. If they continued to take on fraudulent mortgages knowing that they were bad they are complicit in the fraud. And I believe Cohodes contends that the bad mortgages will be put back onto HCG or the taxpayer. Neither of which is true. That is not how insurance works.
It will interesting to see how this works out but I am still open to listen and hear what salient facts the shorts can provide that answer these questions.
If HCG mortgages are fraudulent - why are the insurers still providing insurance. The shorters contend that they are 100 % all bad and worth zero. So why are the insurers providing insurance to HCG? both CMHC and Genworth have to either be part of the fraud conspiracy or the mortgages are ok there is no more fraud from HCG than there is any other bank,