As each day goes on there is more stress for Canada’s biggest non-bank mortgage lender, Home Capital.
One of the key numbers of focus has been the dwindling balance of deposits in its high-interest savings accounts.
Referred to as an alternative lender, because it offers residential mortgages to ‘higher risk’ individuals who might not get approval from a ‘Big Six’ bank, Home Capital uses deposits from savings accounts and GICs to fund its mortgage business.
But following reports from the Ontario Securities Commission last month that executives tried to cover up mortgage fraud, we’ve seen investors and savers lose confidence in the lender as deposits flee.
In just over a week, balances in high-interest savings accounts have dropped from $1.4-billion to $391-million.
Home Capital last week secured a $2-billion credit facility from the Healthcare of Ontario Pension Plan and today will begin to draw on that loan.
The mortgage lender reports earnings Wednesday, and to no surprise, is warning of missing targets.