HCG Equity Lender selling at 50% off!Home trust is an equity lender. They have been from the very beginning and this is why their loss rate is very low. THey charge lender fees and premium rates of interest. So how can the stock not be a screaming buy at 50% discount.
They are also focused primarily on residential mortgages or small comercial properties. They finance deals the A lenders no longer look at. So they are able to pick and choose their deals. They are getting what would have been a A deal were it not for the fact the borrower is self employed. They like low LTV and they are not shy to start legal action to recover their investment. Whereas the banks will wait 3 or 4 months to take legal action and then wait some more Home Trust acts fast, preserving their equity position but charging hefty fees. The low LTV is after using very conservative appraisals.
You can also bet that the payment deferrals that borrowers are getting are going to be a huge bonus to Home Trust. Not only will they earn heafty premiums on these loan deferrals but it is also a way to reinvest theis money at a very low cost. HCG is a great deal and could easily becaome a $50 stock after a few more great quarters and when dividends are reinstated.
If you don't believe any of this ask any mortgage broker that places deals with Home Trust!
Did I mention their credit cards? They are all secured by second mortgages or cash, yield a minimum of 9%, with the reglar fees that other cards have. Default rate = ZERO. Unfortunately it is not a great portion of their business.
In any case there is no reason for HCG to trade at such a huge discount.