Cervus Financial Group Inc.

Cervus Financial Group Inc.

February 24, 2005 09:18 ET

Cervus Financial Group Inc. Signs $1.5 Billion in Mortgage Volume Commitments with 3 Leading Mortgage Brokerage Firms to Bring Total to $21.5 Billion


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: CERVUS FINANCIAL GROUP INC.

TSX VENTURE SYMBOL: CFG

FEBRUARY 24, 2005 - 09:18 ET

Cervus Financial Group Inc. Signs $1.5 Billion in
Mortgage Volume Commitments with 3 Leading Mortgage
Brokerage Firms to Bring Total to $21.5 Billion

TORONTO, ONTARIO--(CCNMatthews - Feb. 24, 2005) - Cervus Financial Group
Inc. (TSX VENTURE:CFG)("Cervus"), a financial services company dedicated
to providing mortgages through mortgage brokers, announced today that it
has signed an additional $1.5 billion in residential mortgage volume
commitments with three of Canada's leading mortgage brokerage firms in
exchange for 105,000 common shares of Cervus. This brings the total to
$21.5 billion in residential mortgage volume commitments that will be
delivered over the next five to seven years in exchange for 4,042,500
common shares of Cervus. This innovative approach creates ownership for
the mortgage brokers and enables them to participate in the building of
Cervus.

"We are very pleased with the addition of these new partners." stated
Gary Bartholomew, Chairman and Chief Executive Officer of Cervus, "With
our "Customer for Life™" model fully operational and deployed in
Ontario, Quebec, Alberta and British Columbia, the early results are
impressive. Our "Customer for Life™" model has introduced to Canada
the first comprehensive origination, renewal and trailer fee
compensation model and supports long-term relationships between mortgage
brokers and their customers. The interests of borrowers, mortgage
brokers and our institutional mortgage investors have all been aligned
for the long term as we build towards being the largest mortgage broker
lender in Canada".

A total of $21.5 billion in residential mortgage volume commitments have
been executed with leading firms with operations in Alberta, British
Columbia, Ontario and Quebec. It is expected that this volume will be
delivered over a five to seven year timeframe. The mortgage volume
commitment agreements are between Cervus' mortgage broker partners and a
partnership among these mortgage broker partners (the "Partnership").
The Partnership has in turn committed the mortgage origination volume to
Cervus in exchange for common shares of Cervus. Prior to this issuance,
Cervus had issued a total of 3,937,500 shares to the Partnership for the
benefit of twelve mortgage broker firms, in return for $20 billion in
deal flow commitments. This issuance of up to 105,000 shares, by way of
private placement, has been conditionally approved by the TSX Venture
Exchange and approved at a meeting of the Board of Directors of Cervus
held on February 23, 2005. These shares will be issued to the
Partnership at a price of $1.12 per share for aggregate consideration of
$117,600.00, for the benefit of three mortgage brokerage firms for $1.5
billion in additional deal flow commitments. Cervus' residential
mortgage broker partners included in the prior share issuances were:

- Discount Mortgage Canada Inc. (Ontario)

- 1546664 Ontario Ltd. doing business as MortgageEdge (Ontario)

- 1490845 Ontario Ltd. doing business as Assured Mortgage Services
(Ontario)

- Pro Link Mortgage Inc. (Alberta)

- RBD Financial Inc. doing business as Mortgage Connection (British
Columbia)

- Re-Max Macklem Mortgage Limited (British Columbia)

- The Mortgage Alliance Company of Canada/Multi-Pret Hypotheques Inc.
(National)

- TMG The Mortgage Group Canada Inc. (British Columbia)

- Homeguard Funding Ltd. (Ontario)

- 1238327 Ontario Ltd. doing business as R/E Active Mortgages (Ontario)

- 1632200 Ontario Ltd. doing business as Your Mortgage Connection
(Ontario)

- Oriana Financial Group of Canada Ltd. (Ontario)

Firms to benefit from this recent share issuance are:

- Capital Mortgages Inc. (Ontario)

- Commerce Solutions Inc.(Ontario)

- Northwood Mortgage Limited (Ontario)

Cervus provides one, three and five-year fixed rate mortgages and a
five-year adjustable rate mortgage to its broker partners and their
customers at "Best Rate" today and at renewal.

About "Customer for Life"

The Cervus "Customer for Life" model enables the mortgage professional
to retain the relationship with the borrower as a customer throughout
the life of the mortgage. The compensation model also creates a
continued revenue stream in the form of trailer fees, a one time
origination fee and a renewal fee every time the customer renews with
Cervus. This creates income security for the mortgage professional
allowing a long-term relationship to be developed with the borrower.
This long-term relationship subsequently gets passed along to the
institutional investor of the mortgage security, creating a higher yield
long-term investment cash flow stream. The Cervus "Customer for Life"
model creates profitable relationships for the borrowers, mortgage
professionals, institutional investors and for Cervus.

About Cervus

Cervus Financial Group Inc. is a Canadian financial services company
created as an industry initiative with leading mortgage broker companies
and fixed income investment banks to become a high-yield mortgage
producer and the largest mortgage broker lender of AAA mortgages in
Canada. Our new and innovative business model demonstrates contracted
asset accumulation of $30B in mortgages over five to seven years by
fusing industry ownership, technology, service delivery and long term
recurring revenue for the mortgage brokers.

Cervus works on the basis of a "Customer for Life" model, where the
borrower is the client of the mortgage broker and Cervus is effectively
the "Back Office - Servicer" between borrowers and investors. Cervus has
assembled an experienced management team and board of directors who are
knowledgeable in banking, financial services and related businesses.
Cervus is focused on funding and servicing conventional and high ratio
residential mortgages originated through mortgage brokers. Cervus is
currently licensed under Ontario, Quebec, British Columbia and Alberta's
mortgage broker/lender legislation and is seeking similar regulatory
approvals in other Canadian Provinces as required. Cervus' head office
and Ontario operations centre is located in Toronto, with additional
planned offices in Vancouver (2005) serving Western Canada and in
Montreal serving Quebec (2005). Cervus Financial Group Inc. conducts all
lending operations through its wholly-owned subsidiary, Cervus Financial
Corp.

Forward-looking (safe harbour) statement

Statements made in this news release that relate to future plans, events
or performances are forward-looking statements. Any statement containing
words such as "believes," plans," "expects" or "intends" and other
statements which are not historical facts contained in this release are
forward-looking, and these statements involve risks and uncertainties
and are based on current expectations. Consequently, actual results
could differ materially from the expectations expressed in these
forward-looking statements.

Additional information about Cervus is available on SEDAR
(www.sedar.com).

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Cervus Financial Group Inc.
    Jan Moir
    Investor Relations
    (416) 860-5230
    IR@cervus.com
    or
    Cervus Financial Group Inc.
    Gary Bartholomew
    Chairman and CEO
    (416) 861-1315 ext 226
    gbartholomew@cervus.com
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.