Posted on 04/26/2017 2:22:34 PM PDT by Reverend Wright
Home Capital Group Inc. said Wednesday its subsidiary has seen deposits drop by nearly $600 million in recent weeks and it is seeking a $2 billion credit line to mitigate the impact, which it expects to accelerate. ...
As part of the agreement, Home Trust would be required to pay a non-refundable commitment fee of $100 million and make an initial draw of $1 billion. The interest rate on outstanding balances would be 10 per cent, and the standby fee on undrawn funds would be 2.5 per cent, Home Capital added.
Gloyn said this translates to an effective interest rate of 22.5 per cent on the first $1 billion, declining to 15 per cent if fully utilized.
(Excerpt) Read more at business.financialpost.com ...
In order to fund themselves, Home Capital has to pay 22.5 percent interest on the first billion, and up to 15 percent if they use the whole credit line.
This is like Century Finance in 2007.
Sounds familiar.
2008 redux.................
ten percent....Whoa Dude
and $100 million fee....
This outfit has a cash flow problem, from all appearances.
Canada never had a housing bust. The prices have just kept on climbing.
Why?....................
We watch DIY and HGTV network.
Most of those shows are Canadian origin.
Looks like Canadian older homes are built like crap...............
It begins . . .
Home Capital is a Canadian mortgage lender that lends to borrowers that the big banks have refused...
Sounds a little different.
So they are like the old General Finance................
More like the Countrywide meltdown. What we don’t know is how many tentacles flow across the border and to the rest of world finance. Housing boom and all time stock market and zero inflation (except for medical, education and loans which aren’t counted), what could go wrong? Government intervention in currency, absolutely nothing to worry about.
More like the Countrywide meltdown. What we don’t know is how many tentacles flow across the border and to the rest of world finance. Housing boom and all time stock market and zero inflation (except for medical, education and loans which aren’t counted), what could go wrong? Government intervention in currency, absolutely nothing to worry about.
In other words, their credit is so bad they are having to turn to loan sharks and pay roughly market interest rates on a billion dollars that they don’t borrow, securing the non-loan portion with collateral.
Or else they are transferring assets in anticipation of a bust out. (It doesn’t say if they are borrowing from an arms length third party for from a front for insiders).
Not familiar with it sir :)
Was/is it a bank?
They were a financer of last resort.
I think they went out of business in the 80’s.............
New Century Mortgage? Agree with others on Countrywide. You could even throw Wells Fargo in that bag as well. They were playing with the dirtbags back then.
Thanks man.
You have to charge SICK interest rates to stay profitable i would guess, as you’re gonna have more defaults than usual!
Speaking of which, through my own misadventures and mistake, I built up 21k in debt 12 months ago.
I’ve cut it to 8k but am getting MORE offers for bankruptcy or personal loan consolidation now.
I didn’t want it when i owed 21k, why would i want it now.
I could have paid the CC debt off using other funds, but they never seem to get replaced.
Business venture that didn’t pan out. Still have full time job and learned a LOT of what to do wrong!!
I was in business in Florida in the 80’s and remember hearing General Finance ads on the radio. Friendly Bob Adams was the manager and the customer had hidden all his bills under the bed. No problem.friendly Bob Adams paid them all off for him.
It was more of a small loan finance company.
‘General Finance”
Heh. I worked for them many years ago. 21-36 per cent interest. Collecting bad loans was an adventure.
ZeroHedge made the comparison with New Century, and I think that is right because it was the first to fail (Spring 2007).
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