Home Capital says unnamed party plans to buy $1.10 billion in mortgages

[May 09, 2017]  (Reuters) - Home Capital Group Inc said on Tuesday a third party, which it did not name, intends to buy up to C$1.50 billion ($1.10 billion) in mortgages, an offer than comes as Canada's biggest non-bank lender attempts to halt customer withdrawals.

The entry to the Home Capital Group's headquarters is seen at an office tower in the financial district of Toronto, Ontario, Canada on May 1, 2017. REUTERS/Chris Helgren/File Photo

Home Capital faces a regulatory probe for misleading investors. Since then, investors have pulled about three-fourth of their deposits, while certain company executives and board members have also left.

The third party has indicated its non-binding intention to buy as much as C$1 billion in uninsured mortgages and to buy, or accept, commitments for up to C$500 million in insured mortgages, Home Capital said on Tuesday.

"This is another step forward in the company's efforts to restore confidence in our operations," Board Chair Brenda Eprile said in a statement.

However, the company said it expects the balance in its high-interest savings account (HISA) to fall to about C$146 million on Tuesday from C$192 million on Monday.

Home Capital said it would continue to offer mortgages in most of its existing product categories, but at reduced volumes.

The company also plans to tighten its lending criteria and reduce some of its broker incentive programs.

(Reporting by Arathy S Nair in Bengaluru; Editing by Anil D'Silva and Savio D'Souza)

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