* HCG chair expects CEO appointment soon
* HCG chair says picking from 'top notch' list of candidates
* Agrees C$252 million residential mortgage book sale
* Shares in Home Capital close down 1.5 percent (Adds sale of mortgage book, closure of Buffett financing)
June 29 (Reuters) - Canadian lender Home Capital Group Inc's Chair Brenda Eprile on Thursday told shareholders it had attracted a "top notch" list of candidates for its chief executive role and would make an appointment soon.
The company earlier said it expects to record a loss in the second quarter due to costs related to its efforts to shore up liquidity and its shares closed at C$16.94, down 1.45 percent.
Home Capital has been searching for a new CEO since March 27 when it terminated the employment of former chief executive Martin Reid.
Industry sources say attracting a candidate with strong relationships with mortgage and deposit brokers is critical. The company is looking to build on an in-flow of deposits after last week agreeing a C$2 billion ($1.5 billion) financing agreement with U.S. billionaire Warren Buffett's Berkshire Hathaway.
"We've got a very short short-list," Eprile said, adding that an appointment would be made within weeks.
Director Alan Hibben, a former Royal Bank of Canada executive who has played a key role in negotiating the bank's refinancing and asset sales, said that he was not one of the candidates, despite media reports linking him with the role.
Former CEO Reid's departure had sparked a withdrawal of funds from Home Capital's high interest savings accounts which accelerated after April 19, when Canada's biggest securities regulator, the Ontario Securities Commission (OSC), accused Home Capital of making misleading statements to investors about its mortgage underwriting business.
Home Capital reached a settlement with the OSC earlier in June and accepted responsibility for misleading investors about mortgage underwriting problems.
The company said on Thursday it had closed the Buffett deal, which will see Berkshire Hathaway invest up to C$400 million take an initial 19.99 percent stake in the company, which could be increased to 38 percent.
It also agreed to sell about C$252 million of residential mortgages to an unnamed party. That follows the sale of a C$1.2 billion commercial mortgage portfolio which was announced earlier in June.
Hibben said further sales or the refinancing of some assets could take place in July
Home Capital, which is expected to release second-quarter results on Aug. 2, said its expenses would increase by C$233 million ($179 million) before taxes, which includes C$210 million in costs related to its recent liquidity issue.
The company said it received conditional listing approval from the Toronto Stock Exchange for Berkshire's initial investment of C$153.2 million for a stake of about 20 percent.
Shareholders will vote on the second tranche of the deal in September. Some smaller shareholders told the meeting they planned to vote against the deal, which could see Berkshire Hathaway acquire the shares at a deep discount but sources say larger investors are expected to support it.
($1 = 1.3006 Canadian dollars) (Additional reporting by Yashaswini Swamynathan in Bengaluru; editing by Saumyadeb Chakrabarty and Clive McKeef)