Security Home was a deposit taking CDIC member financial institution that financed commercial and residential properties and originated, syndicated and managed a $150 million mortgage-backed security portfolio (the “MBS Portfolio”) for which it was contingently liable. Due to the deteriorating quality of its mortgage loan portfolio, Security Home was unable to meet its regulatory capital requirements.
We were appointed Agent of the Office of the Superintendent of Financial Institutions to review the Security Home loan portfolio and the MBS Portfolio and to monitor the operations of Security Home. The review of the loan portfolio and the MBS Portfolio included identifying impaired loans and deficiencies in loan security documentation. We structured a transaction with a Schedule “A” bank to transfer the insured deposits and to manage the administration of the MBS portfolio. We also completed a transaction for part of the mortgage portfolio and managed the remainder of portfolio until the borrowers refinanced. Our role also included determining whether there was support for legal action against the directors, officers and auditors. All proven claims of creditors, including CDIC, were paid in full, plus interest.