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As Home Capital Group Inc.’s shares were in freefall last week, the fight to stop the bleeding at the Canadian mortgage lender had already begun.

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Here’s a look at the company, its role in the Canadian mortgage landscape and how the discovery of fraud among its brokers two years ago continues to have ripple effects today.





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It was late Tuesday night, Ottawa time, when federal Finance Minister Bill Morneau received his first briefing from department officials just as he was boarding a plane in Beijing to head home.

Home Capital had been reeling for a week after the Ontario Securities Commission accused the company of misleading investors over fraudulent mortgages. That was sparking a run on deposits, forcing the company to take on a $2 billion emergency credit line at an effective interest rate of 22.5 per cent on funds drawn so far.

Last Wednesday, with Morneau en route home, Home Capital’s shares dropped 60 per cent by lunchtime as investors bet the onerous terms of the loan would squeeze the company. There was also contagion risk. Canada’s major banks saw their shares slump, while Equitable Group Inc., a rival of Home Capital, plunged by almost a third.