29 Questions
Which type of lender provides short-term loans between 6 to 24 months with higher interest rates?
Mortgage Investment Corporations (MICs)
What document must a Mortgage Investment Corporation (MIC) provide potential investors with in order to sell its shares?
Offering Memorandum
Which type of investors can invest in a private corporation using an Offering Memorandum instead of a prospectus?
Accredited Investors
What is the main security that an investor gets when investing in a Mortgage Investment Corporation (MIC)?
Shares
Which type of lender is known for providing products characterized by short-term loans and higher interest rates?
Mortgage Finance Companies (MFCs)
Who can invest in a private corporation using an Offering Memorandum instead of a prospectus?
Company Insiders
Which type of entity is considered a member of a designated class of lenders and investors according to the text?
A corporation under the National Housing Act
Who among the following is NOT considered a member of a designated class of lenders and investors as per the text?
An individual with a mortgage
Which entity is not explicitly mentioned as a member of a designated class in the text?
An insurance company
Who can be considered part of a designated class of lenders and investors if acting as an agent or trustee for fully managed accounts?
Registered adviser or dealer under the Securities Act
Which of the following entities is categorized as a member of a designated class based on the text provided?
An approved financial institution
What is the primary difference in how an investor participates in a MIC compared to investing directly in mortgages?
An investor buys shares in a MIC instead of directly investing in mortgages.
In a corporate bankruptcy, how are shareholders usually treated compared to other parties?
Shareholders are typically the last to receive payment after creditors in a bankruptcy process.
What factor prevents most Mortgage Investment Corporations (MICs) from guaranteeing share redemption?
Rules imposed by the Income Tax Act regarding shareholders.
Why do most Mortgage Investment Corporations (MICs) not specify the time it will take for share redemption?
Due to rules imposed by the Income Tax Act regarding investors.
What does O.Reg. 188/08 define in relation to Mortgage Brokerages?
Requirements for disclosure forms for borrowers and investors/lenders.
'What is the significance of the designated class of lenders and investors defined in O.Reg. 188/08?'
They exempt members from receiving certain disclosures related to mortgages.
What is the maximum total debt amount allowed by a syndicated mortgage in relation to the fair market value of the property?
90%
What is the limitation on the term of the debt obligation related to a syndicated mortgage?
Must be the same as the syndicated mortgage term
According to FSRA, what defines a 'Permitted Client'?
Those with significant financial experience and knowledge
Why is it illegal to promise 'guaranteed' high returns in syndicated mortgage investments?
Because it is against the law
What is typically the payment priority for investors in syndicated mortgages?
Second in line for repayment
In general, what is the relationship between rate of return and investment risk in syndicated mortgages?
Higher return = Higher risk
Why is it important to know your investor?
To provide accurate advice and recommendations
What is the primary use of FSRA’s Form 3.0?
In non-qualified syndicated mortgages
What are the two classifications of syndicated mortgages as of July 1, 2018?
Qualified Syndicated Mortgage and Non-Qualified Syndicated Mortgage
What are the requirements needed to classify an investment as a Qualified Syndicated Mortgage?
Arranged through a bank
Why is FSRA’s Form 3.0 useful for non-syndicated private mortgage transactions?
It contains information required to meet the KYC needs
What is the significance of the July 1, 2018 subdivision of syndicated mortgages?
To clarify distinctions between different types of syndicated mortgages
Test your knowledge on the importance of knowing your investor and how to get to know them effectively using FSRA's Form 3.0. This quiz covers the significance of accurate advice and recommendations in the context of non-qualified syndicated mortgages.
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