Q?How does MCOCI find mortgages to invest the MIC’s money in?

MCOCI uses its large network of broker contacts to continually fund mortgages within the MIC. MCOCI has a qualified team of underwriters who screen applications and only approve those mortgages that meet the fund’s criteria as approved by the Board of Directors.

Q?What risks are associated with investing in a MIC?

Although mortgages are considered one of the safest investments, risks still exist. Mortgage loans held within the MIC are secured against real estate; an asset that can fluctuate in value over time. Although over the long term real estate prices have steadily increased, there have been periods of price decline, and thus decline in security owned by the MIC.

Another risk investor’s face is borrowers not making their payments as agreed. If this happens, the securities may not be affected but substantial legal costs may be incurred to protect the MICs interests. This could result in decreased liquidity of the fund.

To mitigate these risks, the experienced team of underwriters at MCOCI carefully review every application to reduce the possibility of non-performing loans. Furthermore, strict loan to value guidelines ensure enough equity is available to recover outstanding loan balances in case of foreclosure.

Q?When can I redeem my Shares?

Investors are able to redeem all or a portion of their shares whenever they wish subject to funds being available in the cash account of the fund and subject to the rules set out in the offering memorandum / corporate articles. Usually, amounts of $25,000 or less can be withdrawn with a few days’ notice. However, redemptions of $100,000 or more can take up to 120 days as outlined in the offering memorandum / corporate articles.

Q?How is MCC Asset Management Compensated for Administering the MIC?

MCC Asset Management administers the MIC via a management agreement signed between the MIC and MCC. As part of this agreement, MCC receives a management fee (expressed as a percentage of assets) based on the outstanding mortgage balance of the portfolio on the last day of each month. The MIC pays for all legal, accounting and other associated operating costs during the year while MCC is responsible for costs relating to the acquisition of mortgages purchased by the MIC.

Q?How often do Investors receive information on the MIC?

Investors receive audited financial statements at the end of every fiscal year. Furthermore, whenever an investor makes a transaction on their account, they are presented with an updated statement of account. Investors receive monthly statements outlining the MICs performance.  Investors are encouraged to attend the AGM.

Q?What type of Mortgages does the MIC invest in?

The MIC focuses on predominately residential mortgage loans within The Greater Toronto Area as well as commercial loans. The majority of mortgage receivables are comprised of first and Second mortgages on single family residential homes. Almost all mortgages in the MIC have a one or two year term and are renewable at the borrower’s discretion.

These frequently asked questions and answers are provided for explanation purposes only. They are not intended to be a complete description of the Fund. For a complete description of the Fund, please refer to the
Offering Memorandum.

(1) Investment return will fluctuate over time. Past performance may not be repeated.