Risk Management

In addition to the investment and borrowing restriction under the MIC rules, RESCO MIC has its own lending and borrowing criteria. RESCO MIC can invest only in residential and commercial mortgages, land development and related investments. When assessing a lending opportunity, RESCO MIC will evaluate properties’ location, quality, market condition, existing leverage and net operating income (for income producing properties) to determine if a mortgage investment is suitable for its portfolio. All of these factors, plus the potential for capital appreciation and the borrower’s credit are examined. Some of the key factors used when analyzing and underwriting mortgages to manage risk:
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All mortgages are secured against real property in Canada up to 85% loan-to-value. Appraisal is mandatory to confirm value of the property.

Portfolio will consist of commercial, residential, construction and land development mortgages. No greater than 20% of the capital can be invested with any ONE borrower to reduce concentration risk.

Perform up to 18 customizable real estate fraud checks for potential suspicious activity and flag applications in the underwriting process for further investigation to lower the risk of real estate fraud.

We only lend on select real estate in select locations in order to sell the property. In the event of default security can be liquidated to repay the mortgage debt in a timely manner.

Majority of our mortgages will have a term of one year or less. The short term duration of our mortgages reduces interest rate and credit risk.

The Corporation operates across Ontario, Manitoba, Alberta and British Columbia to reduce risk exposure to real estate and economic events in one specific province.