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Investors pool their money by buying shares in a company called a Mortgage Investment Corporation (MIC). MICs are special companies created by virtue of Section 130.1 of the Income Tax Act, a federal statute, to enable investors to invest in a pool of mortgages. Refer to Income Tax Act, Section 130.1: Salient Rules, below. MICs may also borrow from a bank or other lender, employing both the shareholders’ capital and loan proceeds to fund its mortgage portfolio. The pool of mortgages is continuously managed, with newly invested share capital, and the proceeds of repaid and discharged mortgages, being utilized to fund new mortgages.

The MIC’s management is responsible for all aspects of the Company’s operations, including the sourcing of suitable mortgage investments, the analysis of mortgage applications, the negotiation of applicable interest rates, terms and conditions, instruction of solicitors, mortgage portfolio and general administration.

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