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Mortgage lender Home Capital Group got something money can't buy on Monday: A much-needed dose of respectability.

Three weeks into a crisis of confidence that some expected to kill the company – and potentially undermine parts of the housing market – a trio of proven executives committed their formidable reputations to Home Capital by joining the board.

Their arrival changes the way Home Capital is perceived.

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The rise and fall of Home Capital

On Monday, this company went from potentially being Canada's subprime-mortgage moment to a possible tale of stock-market redemption.

The new directors – Claude Lamoureux, Paul Haggis and Sharon Sallows – have a common bond: They have been winners.

Mr. Lamoureux created a world leader as CEO of the Ontario Teachers' Pension Plan, Mr. Haggis ran OMERS and flew fighter jets and Ms. Sallows has deep experience in banking, private equity and real estate.

People like this never want to be seen as losers.

Home Capital now has four new directors. Alan Hibben, a veteran banker with restructuring experience, signed on last week to replace 78-year-old Home Capital founder Gerald Soloway, who had reached the end of the line.

Mr. Soloway is one of three former senior executives named in an Ontario Securities Commission disclosure case that alleges the company knew about serious problems of mortgage fraud, but failed to tell investors for months. The company and Mr. Soloway have said they will fight the allegations.

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Before the arrival of the corporate cavalry, outsiders predicted one of two fates awaited Home Capital, a drama that Bay Street is watching with the same rapt attention teenagers devote to the suicide TV show 13 Reasons Why. A widely held view was the company would either close due to a liquidity crunch or be sold to one or more rival financial institutions.

The odds of a crash landing or forced sale are now diminished.

Among the first tasks for the newcomers is finding a credible new CEO. Analyst Stephen Boland at GMP Securities said on Monday that the changes showed Home Capital "will make every effort to maintain operations and may not be looking at a near-term sale of the compete business."

As Mr. Lamoureux explained on Monday, the new directors are here because they believe the company is important, and they have some sense of how to fix it.

Home Capital serves a vulnerable customer base, home buyers who cannot borrow from the big banks. This firm is Canada's largest alternative mortgage lender, with an $18-billion home-loan portfolio. A great many people look to Home Capital to put a roof over their heads, and these borrowers have relatively few alternative places to get a home loan.

The new directors are well aware of systemic risks for financial and real estate markets that would come if Home Capital fails. They have fresh memories of how financial contagion blew up Canada's commercial paper market in 2007 and triggered the global economic crisis in 2008. (If the directors were not thinking this way, government regulators have surely given discreet history lessons.)

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The new crew also has the financial savvy needed to tackle refinancing Home Capital, a job that starts with replacing an onerous $2-billion credit line struck last month with the Healthcare of Ontario Pension Plan (HOOPP). The loan kept the doors open, but came with punitive terms and signalled something was seriously amiss. The faster the HOOPP loan is replaced, the quicker the company can move from the intensive-care ward to full recovery.

Finally, a fresh perspective may help Home Capital solve a regulatory standoff that contributed to the market's loss of faith in the company. The run on the bank at Home Capital began last month after the OSC alleged poor financial disclosure.

As part of Monday's changes in the boardroom, Home Capital announced that its new chair is the former OSC chief accountant, PwC partner Brenda Eprile. Companies that want to fix regulatory problems are well advised to hire former regulators.

Looking ahead, customers – rather than blue-chip directors – will determine the future of Home Capital. If depositors remain willing to buy GICs and trust their cash to savings accounts, and home owners continue to pay down mortgages, this company can recover. But recent changes to the Home Capital board buy the mortgage lender both time and credibility as it tries to rebuild its reputation.

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