We take the preservation of your capital seriously and ensure that each mortgage is backed by real property. We put every loan application through a rigorous due diligence process. As an added safeguard, each secured property is assessed by an independent appraiser, thereby ensuring the collateral value of the security fully protects the loan.  Sound mortgage lending (residential or commercial) is not based solely on financial models but also on a common-sense approach to underwriting. 

 

Residential Process

​

Mortgages are originated through mortgage brokers, real estate agents, lawyers, bankers and builders.  Residential underwriting is more straight forward than commercial underwriting but relies on essentially the same due diligence process. 

 

The underwriting process includes:

• Due Diligence: A thorough review and verification of all documentation to determine credit worthiness of the borrower as well as their ability to repay the loan: borrower application; credit report; proof of income; NOA’s; proof taxes are in good standing; independent appraisal of the property.

• Loan-To-Value ratio (LTV): A max LTV of 80% on residential first mortgages and 85% on second mortgages.  Historically Squire has maintained a weighted average LTV of less than 80%. This creates a margin of safety.

• Concentration Risk: We continually monitor concentration risk to ensure that no one loan is a significant portion of the total portfolio.

• Short Term Mortgages: With an average term of under one year, we have an opportunity to reassess the credit terms frequently and the short duration increases the liquidity of the investment

• Diversification: A mix of loans by size, borrower, geography and property type smooths returns by limiting exposure to any one area. 

• Experience: We have extensive expertise in working through difficult situations when they do arise to produce successful outcomes. 

• Exit Strategy: Before we invest, we have a clear understanding about the path to repayment. 

• Monitoring: Once a loan is advanced we continue to regularly monitor the borrower and the property until the mortgage is repaid. 

 

Commercial Process

​

Mortgage applications are originated through mortgage brokers, real estate agents, lawyers, builders and developers, and/or referrals.

​

Mortgages that meet Squire's lending criteria are then underwritten and approved by Squire's management team and committed, subject to thorough due diligence.

• Full due diligence includes a detailed assessment of both the borrower and the specific project or property:

  • Due diligence on the borrower: borrower application, net worth statement, all pertinent financial statements, notices of assessment, etc. We also request credit reports.

  • Due diligence on the project:  all of the details on the project including a comprehensive budget, appraisals, leases, an environmental report (if applicable), etc.

• Once the loan is approved, the lawyers prepare the security documentation. Title insurance is required in respect of real property provided as secuirty for a mortgage loan.

• The borrower and the mortgage loan/project are then carefully monitored by Squire until the loan is fully repaid according to the loan terms and conditions.