| (NC)-Investing money in a private mortgage | | | | - any interest the broker has in the |
| for attractive returns has its merits and its | | | | property; and |
| risks. This type of investment is one in | | | | |
| which a person lends money to a borrower who | | | | - the broker's fees for the transaction. |
| pledges real estate as security for the loan. | | | | |
| These types of mortgage investments may be | | | | By law, the broker cannot accept money from |
| arranged through a Mortgage Broker. | | | | you until 48 hours after you have received |
| | | | this specified information and have signed a |
| All Mortgage Brokers in the province of | | | | commitment to fund the mortgage. |
| Ontario are required to be registered with | | | | |
| the Financial Services Commission of Ontario | | | | Do your homework |
| (FSCO), an agency of the Ministry of Finance. | | | | |
| | | | It took a long time to save the hard-earned |
| Do business only with a licensed Mortgage | | | | money you want to invest, so it's wise to |
| Broker. Confirm that the broker you are | | | | carefully review all documents before making |
| dealing with is qualified and registered by | | | | any decisions. You are entitled to take at |
| visiting FSCO's website: or by calling (416) | | | | least 48 hours (not including Sundays and |
| 226-7776. | | | | holidays) to review the investment documents. |
| | | | Read them carefully. |
| Mortgage Brokers must give you full | | | | |
| information | | | | Consider the value of the real estate. The |
| | | | Mortgage Broker must provide documentary |
| Mortgage Brokers are required to provide each | | | | evidence of the property's value, other than |
| prospective investor with information in the | | | | an Agreement of Purchase and Sale. This could |
| form of an Investor/Lender Disclosure | | | | include an appraisal. |
| Statement, as well as supporting documents | | | | |
| such as an appraisal and an Agreement of | | | | Unlawful activity |
| Purchase and Sale. | | | | |
| | | | Mortgage Brokers are prohibited from selling |
| This information package must include: | | | | or arranging the sale of mortgages that are, |
| | | | or have been, in default within the past 12 |
| - a description of the property or project to | | | | months. |
| be mortgaged; | | | | |
| | | | Mortgage Brokers cannot accept funds from you |
| - the terms and conditions of the mortgage | | | | to hold for a future investment. |
| loan; | | | | |
| | | | Risks to consider about mortgage investments |
| - how the mortgage will be administered; | | | | |
| | | | - They are not insured by the Government of |
| - in case of mortgage syndications, terms of | | | | Ontario. |
| the syndications; | | | | |
| | | | - They cannot be guaranteed by the Mortgage |
| - all prior claims on the property, such as | | | | Broker. |
| other mortgages, liens or taxes owing; | | | | |
| | | | - They may be difficult to resell quickly. |
| - information on the borrower, including | | | | |
| ability to repay the loan; | | | | Mortgages can be high-risk investments. |
| | | | Consult your financial advisor to see if |
| - any relationship or connection the broker | | | | mortgage investments would be suitable for |
| has with the borrower and appraiser; | | | | you. |
| | | | |