Topic: How To Invest

The Successful Investor Hotline – Friday, June 16, 2017

Article Excerpt

HOME CAPITAL GROUP INC., $14.25, Toronto symbol HCG, is a mortgage lender serving borrowers who fail to meet the stricter standards of Canada’s big banks and other larger, traditional lenders. The stock rose 20% this week after the company agreed to settle charges that it failed to disclose material information in a timely manner and misled investors. The accusations relate to Home Capital’s July 2015 announcement that it cut ties with 45 independent mortgage brokers. That move was the company’s response to concerns those brokers had submitted loan applications with falsified income statements. Home Capital has since reviewed all of the loans in question and found the loans to be sound. Under the terms of the settlement, the company will pay a total of $30.5 million to settle the charges and a related class-action lawsuit. Home Capital continues to negotiate with several banks to replace an emergency $2 billion line of credit from the Healthcare of Ontario Pension Plan. It has already tapped $1.65…