Troubled lender back from the brink

The firm has taken the broker channel by storm

Troubled lender back from the brink

Home Capital has been in the news for all the wrong reasons in the last few years, but it appears the Alt-A lender has reached greener pastures.

In fact, the Toronto-based lender is ahead of schedule. The company’s CEO Yousry Bissada noted that since a buoyant third quarter in 2017, Home Capital is on pace to fully recover at some point this year.

“It’s been improving since the third quarter,” Bissada told “We were declining over 70% in the third quarter, and in the fourth quarter it was 60%, and our normal number for Alt-A business has historically been around 50%, so I think we’re going to get to that number in one of the quarters in 2018. We think we’ll get there in 2018, and I’m quite confident we will.”

The Office of the Superintendent of Financial Institutions’ latest Guideline B-20 stipulations threw an additional spanner in the works, but the company’s principal subsidiary Home Trust has undertaken an education program for its broker partners.

“Everybody is relearning what they can and can’t do, so there’s a larger portion of business that Alt-A lenders can’t do,” said Bissada. “Part of it is Home is doing is a lot of push to educate brokers on what mortgages fit our suite so that we have a higher chance of business being sent to us that will stay.

“Our BDMs are going to communicate what B-20 means. Many brokers are very familiar with it, but they’re communicating what B-20 means and what it means specifically for Home. There are brokers who deal with Alt-A quite regularly and are comfortable with it, and some brokers who deal with it as an exception and it’s not their main core business, so the more we can communicate what we want before sending, the more the probability of getting approved.”

Among Home Trust’s most popular product suites are Alternative A for immigrants, the self-employed, and people with bruised credit, as well as the “Accelerator” for A business.

“It’s a completely different year. We’re back in business; we’re full-out with our product offerings to mortgage brokers on the single-family residential side. We’re full-out on our commercial mortgages; as well, we have some retail products and credit cards. Summarizing it, we’re back in business compared to 2017, where we were stopped for a large part of the year. It’s only three months into the year, but it’s business as usual. We’re in this new environment of B-20, dealing with it like every other Alternative A lender has to deal with it. But we think it’s going to be a good year for us.”

Ron Butler of Butler Mortgage can attest to Home Capital miraculous, if quick, turnaround.

“Obviously, they went through a crisis, but every single mortgage that we’ve submitted they underwrote,” said Butler. “They went through a difficult time and they have come out of it much faster, and more efficiently, than I would have ever believed. This has been one of the most stunning turnarounds I’ve ever seen in business—it’s very difficult to pull back from the brink like they did.”


Related stories: