Canadian-based and Jamaican-listed mortgage financier, EquityLine Mortgage Investment Corporation is reporting improved performance so far this year but remains in the red.

The company ended its third quarter of 2021 in September with a net loss and comprehensive loss of CAD$480,397. However, this was an improvement on the net loss for the same period in 2020 of CAD$890,325.

For the combined three quarters ended September 30, 2021, EquityLine, which provides financing to qualified borrowers that are not well serviced by the traditional commercial banks in Canada for short term loans, funded 53 new mortgages in 2021. These loans amounted to totalling CAD$17.39 million.

Regulatory changes, including the B20 guidelines, have resulted in most residential–focused lenders tightening up on income qualification, thus forcing borrowers to private lenders, as a result of difficulty qualifying for institutional loans.

EquityLine’s loans are secured against equity in the borrower’s home and are generally used for bridging, home improvements and debt consolidation. These mortgages are typically repaid with the proceeds from refinancing the loan.

Big demand increase for more private mortgage products in Canada

Equityline reports that this has resulted in a large increase in demand for more private mortgage products nationwide. 100 per cent of Equityline’s portfolio is invested in Ontario urban markets that generally experience better real estate liquidity in periods of uncertainty and thus offer a better risk profile.

During the nine-month period, the company earned interest income on net mortgage investments of CAD$1.12 million, up from the CAD $743,836 recorded for the comparable period in 2020.

As the company strengthens its balance sheet with the completion of the successful JSE public offering in fiscal 2020, funds were put towards a high-quality mortgage portfolio. This portfolio of mortgages at September 30, 2021, has an average loan-to-value of 73.0 per cent.

EquityLine’s President and Chief Executive Officer, Sergiy Shchavyelyev in his quarterly report to shareholders advised that there has been no instance of defaults or mortgage losses so far in 2021.

According to him, “We see tremendous growth opportunities in our market segments and plan to capitalise on it. As we expand our revenues, we will achieve the necessary economies of scale to achieve sustainable profitability while ensuring consistent dividend distributions.”

Shchavyelyev reported that EquityLine returned an annual return of eight per cent, paid monthly on its publicly traded preference shares and expect this to continue in the foreseeable future.  

He said, ”EquityLine continues to build its team and platform for managing the growth we are seeing today and anticipate in the near future. We continue to invest in our people, systems, and partnerships to ensure EquityLine MIC delivers quality service, accessible mortgage solutions and performance results expected by our clients and shareholders.”

The Canadian-based company is focused on building a strong mortgage portfolio secured by qualified real estate assets, whilst continuing to mitigate risk through mortgage diversification, funding shorter-term loans (less than 12 months) and strictly applying a conservative underwriting practice to every mortgage we fund.

EquityLine has consistently paid dividends and is dedicated to predictable cash flow for its shareholders.