{"id":10562,"date":"2015-07-31T06:55:56","date_gmt":"2015-07-31T11:55:56","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10562"},"modified":"2015-07-31T06:55:56","modified_gmt":"2015-07-31T11:55:56","slug":"home-capital-scandal-may-presage-a-slowdown-don-pittis","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10562","title":{"rendered":"Home Capital scandal may presage a slowdown: Don Pittis"},"content":{"rendered":"<div class=\"story-headline\">\n<h3 class=\"story-title\"><a href=\"http:\/\/www.cbc.ca\/news\/business\/home-capital-scandal-may-presage-a-slowdown-don-pittis-1.3173990\" target=\"_blank\">Home Capital scandal may presage a slowdown: Don Pittis<\/a><\/h3>\n<\/div>\n<p class=\"story-deck\"><strong>Is false income data a symptom of an industry that has run its course?<\/strong><\/p>\n<p>Could the scandal at Home Capital just be the beginning? The Canadian alternative mortgage company\u00a0<a href=\"http:\/\/www.cbc.ca\/news\/business\/mortgage-lender-home-capital-cuts-ties-with-45-brokers-for-bogus-documentation-1.3173659\">halted its shares\u00a0<\/a>after it was revealed that some of its\u00a0brokers had been falsifying information on the income of mortgage customers.<\/p>\n<p>As the soaring housing markets in Alberta and Saskatchewan go\u00a0off the boil, a gradual weakening in Canada&#8217;s\u00a0roaring real estate business may reveal more irregularities in the market.<\/p>\n<p>It is a phenomenon we have seen\u00a0happen so frequently\u00a0that\u00a0the uncovering of scandal in a market is often seen as a cause rather that a\u00a0symptom of a market&#8217;s decline. Sometimes they go hand in hand.<\/p>\n<ul>\n<li><strong><a href=\"http:\/\/www.cbc.ca\/news\/business\/mortgage-lender-home-capital-cuts-ties-with-45-brokers-for-bogus-documentation-1.3173659\">Home Capital cuts ties with 45 brokers<\/a><\/strong><\/li>\n<li><strong><a href=\"http:\/\/www.cbc.ca\/news\/business\/transunion-expects-spike-in-debt-delinquencies-in-alberta-saskatchewan-1.3172497\">TransUnion\u00a0expects spike\u00a0in delinquencies<\/a><\/strong><\/li>\n<\/ul>\n<p>On a conference call yesterday Home Capital CEO Gerald Soloway\u00a0insisted that the problem with its brokers was not an indication of a mortgage fraud crisis across Canada. Home Capital&#8217;s delinquencies remain low, and the company says it has stopped doing business with the brokers that investigators had shown to be pretending customers&#8217; income qualified them for mortgages.<\/p>\n<h2>Pressure to succeed<\/h2>\n<p>It is hard to draw a direct line of cause and effect between the first few scandals in a weakening market and that weakening.<\/p>\n<p>But as markets get into trouble, more and more accounts get shuffled off to the riskier end of the business. Pressure to succeed intensifies.\u00a0People trying to make a living are more willing to take shortcuts. And it is only as the markets weaken that shortcuts \u2014\u00a0or outright fraud\u00a0\u2014\u00a0are revealed.<\/p>\n<p>There are many examples but the most notorious\u00a0case is\u00a0<a href=\"http:\/\/www.biography.com\/people\/bernard-madoff-466366\">Bernie Madoff<\/a>, author of what many consider be the biggest swindle in U.S. history. Madoff&#8217;s\u00a0scheme was to accept investors&#8217; money and falsify the income statement on their investment returns. Even as other funds began to do badly,\u00a0Madoff&#8217;s\u00a0remained strong.<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Home Capital scandal may presage a slowdown: Don Pittis Is false income data a symptom of an industry that has run its course? Could the scandal at Home Capital just be the beginning? The Canadian alternative mortgage company\u00a0halted its shares\u00a0after it was revealed that some of its\u00a0brokers had been falsifying information on the income of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[103,3544,3000,4936,7689,7688,7686,2340,7685,7690],"class_list":["post-10562","post","type-post","status-publish","format-standard","hentry","category-economics","tag-canada","tag-cbc","tag-cbc-news","tag-don-pittis","tag-gerald-soloway","tag-home-capital","tag-home-trust","tag-housing-market","tag-liar-loans","tag-mortgage-fraud"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10562"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10562\/revisions"}],"predecessor-version":[{"id":10563,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10562\/revisions\/10563"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}