Q: This is not a question but an observation. I do mortgage default work, and Goeasy got into the 2nd mortgage business in the past few years, and those loans in Ontario, at least, are underwater. On the two files I saw just this past week. They will suffer a complete loss because, unlike 1st mortgage loans with banks, they are not insured. I don't know how much of their portfolio is in the 2nd mortgages. As of their investor presentation from August 2025 and Q3 2025 results, 39% of their total loan portfolio is secured by hard assets, which include real estate, as well as automotive and recreational vehicles. The presentation does not indicate the % related to real estate loan porfolio.
5i Research Answer:
Thanks for the added insight. The unsecured portion of their loans, which this would likely fall under, tends to be for smaller amounts to help manage risk. So, the exposure should be spread out with no big single concentration but, as indicated in the earnings release, the company is seeing an uptick in delinquencies currently so while these examples are not ideal, there will be these types of stories out there and for better or worse it is also a bit of the nature of the business.