Cohodes vs Home Capital: Testing the short seller’s claims
Amber Kanwar, 27 October 2016
San Francisco-based short seller Marc Cohodes has been shorting Home Capital Group since 2014. He made a number of claims, and raised questions, about Home Capital in an interview with BNN this week. We gave the mortgage lender an opportunity to respond. Below, you’ll find Home Capital’s comments.
Cohodes says Operation Trillium was Home Capital’s response to discovering mortgages that had poor underwriting standards. He believes it was initiated a year before the suspended brokers were announced. “[Operation Trillium] is somewhere between a cover up and a remediation effort,” said Cohodes in an interview with BNN. He believes it was initiated a year before Home Capital disclosed the suspended brokers.
Home Capital did not confirm the existence of Operation Trillium and instead provided this comment: “We refer investors who are interested in the facts to our quarterly disclosure, which includes information on the performance of the mortgages originated by the suspended brokers, the value of loans outstanding that were originated by those brokers, and the progress of our review of those mortgages.”
