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Quality Management-in-Finance.

Sunday, 3 April 2016

Don't Believe the BS: The "Business" of Risk Management for Investors in Financial Products

To all: MortgageQuote Existing and Future Private Equity Mortgage (PEMTM) investor-lenders

Recently seen on a publicly posted website that belongs to a government and securities commission regulated mortgage investment company; in an answer to a potential investor's question regarding guaranteeing of principal and risk:

IS MY PRINCIPAL GUARANTEED?
No. Your investment is secured by the mortgages held by the fund, and there is always risk associated with this type of investment. It is our business to manage risk on behalf of our investors and we have a strong record of successful risk management.

Well, at MortgageQuote, we have always preached about the risks of investing your money in any mortgage investment that is not directly registered on the underlying real estate - AVOID IT. Investing in the shares of a mortgage investment company is no less risky than investing in the shares of a company listed on a financial exchange. You are really placing your trust in the people who RUN THE COMPANY; you do not get the benefit of the safety of the underlying mortgage investment and there are many companies who have good mortgage investments but go into CCAA or CHAPTER 11 because not of the risk of the underlying investments but the RISK OF POOR BUSINESS MANAGEMENT. (Contact us if you have questions about this paragraph).

Anyhow, the point is this:

ANY COMPANY WHO SAYS THEY ARE IN THE BUSINESS TO MANAGE RISK ON BEHALF OF INVESTORS should also have the supporting third-party, objective proof to show HOW the business manages risk. One internationally recognized and certifiable approach is implementing an ISO 9001 quality management system. The ISO 9001 quality management system enables businesses to prevent and correct unwanted actions and outcomes. The system is a nothing less than a risk management system.

All savvy investors know that any company in the finance industry whose management purports to be in the BUSINESS OF MANAGING RISK, is required to let the audience know what tested, certifiable, auditable and established risk-management system they have in place to effect the risk management outcome. If not, the savvy investor knows that it's only BS: "Business Selling-a-line."

Conclusion:

FOR COMPANIES WHO ADVERTISE FINANCIAL INVESTMENTS, IT IS NOT SUFFICIENT TO REPRESENT BY MERELY STATING YOU ARE MANAGING RISK, IT IS INCUMBENT UPON THE COMPANY TO ADVERTISE PROOF OF HOW THEY MANAGE RISK - IN A MANNER THAT THE INVESTOR CAN VERIFY WITH A THIRD PARTY SOURCE BEFORE DECIDING TO INVEST.

MortgageQuote Canada Corp. is your answer.

(1) FOR MORTGAGE INVESTOR-LENDERS, IS MORTGAGEQUOTE IN THE BUSINESS OF MANAGING RISK?

YES

(2) HOW DOES MORTGAGEQUOTE MANAGE RISK?

CERTIFICATION TO ISO 9001:2008 QUALITY MANAGEMENT SYSTEM (QMS)

(3) CAN A PROSPECTIVE OR EXISTING LENDER OBTAIN THIRD-PARTY VALIDATION OF MORTGAGEQUOTE'S (QMS)

YES (HERE) - OR EMAIL US


#1 in Canada for Quality Management in the Finance Industry: serving the needs of borrowers, brokers and investor-lenders (proof).

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