...Outlook: Negative Our outlook on Home Capital Group Inc. is negative, reflecting our view that the company's significant concentration in nonprime residential mortgages during a period of elevated home prices and consumer leverage is weighing on the company's credit quality. The negative outlook also reflects our reduced confidence in the company's controls relating to income and employment verification, given the events surrounding the fraudulently originated mortgages several years ago. We could lower our ratings on Home Capital, within the next two years, if there is meaningful deterioration in franchise value resulting from a continued decline in profitability (driven by lower-than-expected mortgage origination volumes and customer retentions as well as higher operating expenses) or considerable weakening in the company's credit metrics. While we gain comfort from the fact that the total loan portfolio continues to perform well from a credit quality standpoint, we are closely watching...
