835955--3/6/2006--INTERVEST_MORTGAGE

related topics

{loan, real, estate}

{debt, indebtedness, cash}

{competitive, industry, competition}

{loss, insurance, financial}

{personnel, key, retain}

{acquisition, growth, future}

{operation, natural, condition}

{control, financial, internal}

{cost, regulation, environmental}

{interest, director, officer}

{condition, economic, financial}

WE DEPEND ON OUR EXECUTIVE OFFICERS AND OTHER KEY EMPLOYEES TO IMPLEMENT OUR BUSINESS STRATEGY AND OUR BUSINESS MAY SUFFER IF WE LOSE THEIR SERVICES. OUR LOANS ARE HIGHLY CONCENTRATED IN COMMERCIAL REAL ESTATE AND MULTIFAMILY MORTGAGE LOANS, INCREASING THE RISK ASSOCIATED WITH OUR LOAN PORTFOLIO. INVESTMENTS IN JUNIOR MORTGAGES MAY BE RISKIER THAN INVESTMENTS IN SENIOR MORTGAGES. RECOVERY OF NON-RECOURSE MORTGAGES IS LIMITED TO THE PROPERTY ITSELF. WE MAY COMPETE WITH, AND WE DO PROVIDE SERVICES TO, OUR BANKING AFFILIATES. WE HAVE NOT SET ASIDE FUNDS TO PAY THE DEBENTURES WHEN THEY MATURE. WE ARE A HIGHLY LEVERAGED COMPANY AND OUR INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION AND BUSINESS. WE DEPEND ON BROKERS AND OTHER SOURCES FOR OUR MORTGAGE LENDING ACTIVITIES AND ANY REDUCTION IN REFERRALS COULD LIMIT OUR ACCESS TO THE LENDING MARKET. THE EMPLOYMENT AGREEMENTS OF OUR EXECUTIVE OFFICERS PERMIT THEM TO ENGAGE IN ACTIVITIES THAT MAY BE CONSIDERED TO BE COMPETING WITH THE COMPANY, WHICH MAY HAVE AN ADVERSE EFFECT ON OUR BUSINESS. IF WE FAIL TO MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROL OVER FINANCIAL REPORTING, WE MAY NOT BE ABLE TO ACCURATELY REPORT OUR FINANCIAL RESULTS OR PREVENT FRAUD. OUR ASSETS ARE HEAVILY CONCENTRATED IN MORTGAGES ON PROPERTIES LOCATED IN NEW YORK CITY, AND ACCORDINGLY OUR BUSINESS AND OPERATIONS ARE MORE VULNERABLE TO DOWNTURNS IN THE ECONOMY OF THIS CONCENTRATED GEOGRAPHIC AREA. TERRORIST ACTS AND ARMED CONFLICTS MAY ADVERSELY AFFECT OUR BUSINESS. OUR BUSINESS WILL SUFFER IF WE DO NOT CONTINUALLY IDENTIFY AND INVEST IN MORTGAGES. FLUCTUATIONS IN INTEREST RATES AND CREDIT TERMS COULD ADVERSELY AFFECT OUR ABILITY TO COLLECT ON MORTGAGE LOANS HAVING BALLOON PAYMENT FEATURES. COMPETITION MAY AFFECT OUR ABILITY TO GENERATE DESIRED RETURNS ON OUR INVESTMENTS. INVESTMENTS IN MORTGAGES AND OWNERSHIP OF REAL PROPERTY ARE SUSCEPTIBLE TO FACTORS OUTSIDE OUR CONTROL. IF WE ARE REQUIRED TO FORECLOSE ON MORTGAGES, OUR RETURN ON INVESTMENT MAY BE LESS THAN WE EXPECTED. OUR BUSINESS IS AFFECTED BY PREVAILING INTEREST RATES AND THE AVAILABILITY OF FUNDS. PREPAYMENTS OF MORTGAGE LOANS COULD REDUCE EXPECTED RETURNS ON INVESTMENT. ANY DIFFICULTY IN ACCESSING ADDITIONAL CAPITAL MAY PREVENT US FROM ACHIEVING OUR BUSINESS OBJECTIVES. COMPLIANCE WITH ENVIRONMENTAL LAWS CAN BE COSTLY.

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835955--3/6/2006--INTERVEST_MORTGAGE_CORP