FAQ

Like the federal banks, the firm maintains a low leverage ratio of only 80% debt-to-total assets. This provides a 20% equity cushion, at minimum, and allows the collateral asset to experience a 20% price fluctuation without affecting principal capital.

Unlike the federal banks, the firm is selective on the type of property it uses in its security class. The firm selects only residential single-family detached homes as its collateral asset (meaning no condominiums, duplexes, industrial property etc.) as these property types hold their value over time.

While Canadian real estate as a whole might be subject to price fluctuations, the firm is only concentrated on Toronto real estate specifically within a 1.5-hour driving distance from the CN Tower. Single-family homes in this radius are the most stable in the country and hold their value over time.

The firm receives upfront payment from borrowers, prior to funding, in the form of post-dated cheques for the full term of the loan. Should a payment become non-sufficient (i.e. late, missed or the incorrect amount), the borrower is charged a $450 NSF fee in addition to their regular and scheduled interest payment plus a $1,000 fee for each action or proceeding instituted. The NSF fee escalates by $50 for each offense thereafter and the firm has the right to exercise its option to call the loan back or initiate the power of sale process after the first occurrence.

The firm records an annual loan loss provision on its books equal to 2% of AUM as a precautionary non-cash expense to account for possible loan impairments and increase its emergency reserve fund.

The firm has a cash reserve equal to 20% of AUM to protect shareholders and continue dividend payments consistently and uninterruptedly if a default scenario occurs. To date the firm’s default rate is NIL.

The firm maintains a low mortgage concentration ratio where no more than 10% of our capital is funded to any one particular borrower. As a result, if a file experiences a default scenario, all other loans remain in performance and continue their regular cash flow payments to the firm.

Upon maturity of the mortgage the firm has the option to either renew or discharge the loan. If a renewal is offered, which is based on current market conditions and subject to a current property appraisal, a renewal agreement is submitted and a new series of post-dated cheques are received from the borrower.

If the firm decides to call the loan at the end of its term, a discharge statement is submitted to the mortgagor and the principal loan balance is disbursed back to the firm while the lien and registration are released from the property. Loans are typically repaid back to the firm using longer-term debt from other major lenders, including federal banks, or using proceeds from the sale of the property.

The preferred shareholder may, by giving 90-day written notice to the firm, request for the firm to redeem or retract his or her shares for the amount paid upon such shares plus any accrued but unpaid dividends.

WH is able to provide liquidity services to its shareholders because of the short-term nature of the firm’s loan durations equating to 12 months or less. Additionally, WH’s cash reserve fund and diversification amongst mortgage terms and maturity dates (ranging from 1 to 12 months) allows capital to mature frequently throughout the year. As a result, the firm is able to accommodate redemption requests (if any) for its preferred shareholders.

The Financial Services Commission of Ontario (FSCO) and Section 130(1) of the Income Tax Act of Canada regulate the firm.

Both authorities have oversight and ensure the firm maintains its compliance with all applicable laws and regulations in the investment community.