Home Capital Group said Tuesday that it has a non-binding intention from a third party to acquire up to $1.5 billion of its Home Trust subsidiary’s mortgage book.
The deal would see up to $1 billion in qualifying uninsured mortgage being acquired, around half of that initially. The unnamed third party may also acquire up to $500 million of insured mortgages. There could be an extension of these intentions at a later date.
“This purchase arrangement is designed to give us the ability to continue to serve as many customers as possible in the
mortgage broker channel, and we are optimistic that there can be opportunities for future growth,” said Bonita Then, interim Chief Executive Officer of Home Capital. “Meanwhile, we continue to work very hard to develop additional sources of funding, while carefully managing our liquidity.”
The lender is also tightening its lending criteria and reducing some of its broker incentive programs, measures that Then acknowledges will mean a reduction in its mortgage originations volume.
The Company will continue to offer mortgages in most of its existing product categories, however at reduced volumes.
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