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how msquared works

Msquared Contributory Mortgage Income Fund provides an opportunity to invest in a range of quality registered mortgages.

 

Through a Contributory Fund structure, investors are able to choose the mortgage investments that match their personal risk/return appetite.

Lending Process

 

Mortgage Investments are sourced through existing referral networks, mortgage brokers and mortgage originators.

 

All loans made by the Fund will be in accordance with the Fund’s lending guidelines.The Manager assesses the quality of each prospective security and borrower. The analysis will take into account a set of criteria. The risks can be described in five broad categories as follows:

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Character

We undertake a number of background checks and searches to assess borrower’s past behaviour and history.

Capacity

A clear exit strategy, and in most cases – multiple exit strategies, must be established prior to funding, taking into account the length of the loan term. These could include re-finance to another lender, sale of the property or otherwise an ability to pay out the loan. The borrower’s net asset position relative to the amountof the required lending, is also a critical consideration.

Cashflow

The borrower must demonstrate an appropriate capacity to service the debt or else sufficient equity for interest to be capitalised upfront to provide servicing.

Competency

The borrower must demonstrate a proven track record and sufficient acumen to undertake the commercial ventures for which they require funding.

Collateral

Proposed security property/s must be assessed assuming a possible worst-case scenario of borrower default. The ratio of the loan to the property value must be appropriate to ensure maximisation of investor capital preservation and that any property taken as security is easily saleable within a reasonable period of time. This is the primary driver behind the decision not to lend against specialised securities, regional locations and farm lands.