MORTGAGEBROKER mbabc.ca summer 2015 | 47
investmentcap
investment entities?
as you may be aware, government regulation
is usually ineffective at reducing fraud, as
fraudsters never intend to comply with rules,
particularly ones that would limit the funds
they can misappropriate. creating more
rules or more restrictive rules will not change
this unfortunate reality. Tackling investor
fraud will likely require a collaborative
effort between criminal justice systems,
government regulators and the industry.
Impact on the Mortgage
Investment Corporations
and Consumers in Nova
Scotia
a good number of mIcs rely on the om
exemption to raise mortgage funds. mIcs
contribute millions of dollars' worth of
mortgage principal to borrowers in Nova
Scotia. Without mIcs it would not be
possible for many Nova Scotia residents to
afford to own their own homes, and many
businesses could not acquire the necessary
capital for growth and development. e
impact of the loss of mIcs in Nova Scotia
would be profound and would include:
• e loss of employment from mortgage
industry members and support staff
who would no longer be arranging and
administrating mortgages – as well as the
loss of construction-related employment
from developers and builders who would not
be able to finance new projects;
• e loss of safe and reliable investment
opportunities for investors;
• e removal of private mortgage lenders
from the marketplace, which will make
it more challenging for borrowers to find
available mortgage capital but also push
private lending underground where there is
no regulation; and
• Higher borrowing costs and less access to
mortgage capital, which will lead to an increase
in foreclosure rates and borrower defaults.
creating investor caps on om
investments in Nova Scotia will not benefit
Nova Scotia in any way: not investors,
not industry and not the economy. om
investor caps will instead potentially cripple
an already struggling economy, hamper
investors and place road blocks in front of
om reliant industries, such as mIcs.
