Cervus Financial Group Inc.

Cervus Financial Group Inc.

October 25, 2005 08:30 ET

Cervus Pays its First Trailer Fee to the Mortgage Broker Industry

TORONTO, ONTARIO--(CCNMatthews - Oct. 25, 2005) - Cervus Financial Group Inc. ("Cervus"), (TSX:CFG), is a financial services company dedicated to providing mortgages through select mortgage brokers. Cervus is pleased to announce it has paid its first trailer fees to the mortgage broker industry. Cervus compensates the broker with a one time origination fee and a trailer fee for each year the mortgage remains with Cervus and with a renewal fee upon the renewal of the mortgage for another term.

"This represents a major milestone for Cervus, delivering on its promise to drive wealth creation for the mortgage broker industry", states Gary Bartholomew, CEO of Cervus. "The intrinsic value of the trailer fee model is that it enables the mortgage professional to build a retirement fund based upon the book of business built up with Cervus."

The first five recipients of the trailer fees are teamed with one of the company's initial broker partners that participated in the creation of this unique business model. This is an important step for the mortgage broker industry towards creating wealth, income security and promoting long term relationships for the mortgage brokers and their customers.

"The hundreds of mortgage professionals in our firm that have embraced this model understand the value it will bring them. They appreciate the long term financial benefits and enhanced client relationships," states Michael Beckette, President of The Mortgage Alliance of Canada. "We see this as an integral part of the business practices of the mortgage professionals with our firm in the years to come."

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 residential mortgage producer and the largest mortgage broker lender of conventional insured and insurable mortgages in Canada. Our new and innovative business model demonstrates contracted asset accumulation of $22.5 billion 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 insurable conventional and high ratio insured residential mortgages originated through mortgage brokers. Cervus is currently licensed under Ontario, Quebec, British Columbia and Alberta mortgage broker/lender legislation and is seeking similar regulatory approvals in other Canadian Provinces as required. Cervus's head office and Ontario operations centre is located in Toronto, with additional sales offices in Vancouver, Calgary and in Montreal. 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).

The TSX does not accept responsibility for the adequacy or accuracy of this release.

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