The chief executive of mortgage company Home Capital has spoken out against the stock market short-sellers who believe his company is at risk from sub-prime lending. Gerald Soloway told The Financial Post that he disagrees with analysts who think that the firm is exposed: “I just profoundly disagree with the bets they are making,” he said. “We’re on the ground and we do not see the distress (in the Canadian market) they think is happening.”
The report says that Home Capital has 40,000 uninsured mortgages and 25,000 insured mortgages on its books. Concern about this level of riskier loans and its results last week that showed a lower rate of new mortgages has led to Home Capital’s stock becoming the third most-shorted and the loss of around a quarter of its share price. The firm announced last week that it had ended agreements with a number of brokers who it did not feel upheld its lending standards. The firm has said that claims that it had cut ties with hundreds of brokers was not correct and that it was in fact less than one hundred.
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