Shares in Toronto-based alternative mortgage lender Home Capital Group dropped by up to 15 per cent following disappointing financial results. The firm’s preliminary financial results were weaker than analysts had expected and the lender said that the end of relationships with some mortgage brokers in the previous quarter meant lower origination volumes. Home Capital’s single-family residential mortgage originations for the second quarter of 2015 were: (a) traditional mortgage originations $1.29 billion compared to $1.53 billion in Q2 2014 and $0.96 billion in Q1 2015; and (b) Accelerator (insured single-family) residential mortgage originations $280.0 million for Q2 2015 compared to $619.6 million in Q2 2014 and $180.0 million in Q1 2015.
CEO Gerald M. Soloway said: “We have already seen a rebound in origination volumes towards the end of the second quarter, and our strong pipeline of mortgage originations gives us confidence that we will achieve our mid-term guidance. I have full faith in the ability of our team and business partners to realize improvements in originations through the rest of 2015.”
Profits are expected to be $1.03 per share; Bloomberg’s poll had predicted $1.05 per share. Full results are due July 29.
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