Quarterly report pursuant to Section 13 or 15(d)

Mortgages Receivable

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Mortgages Receivable
9 Months Ended
Sep. 30, 2017
Mortgage Loans on Real Estate [Abstract]  
Mortgage Loans on Real Estate, by Loan Disclosure [Text Block]
3.
Mortgages Receivable
 
Mortgages Receivable
 
The Company offers secured non-banking loans to real estate investors (also known as hard money loans) to fund their acquisition and construction of properties located mainly in Connecticut. The loans are principally secured by first mortgages on real estate and, generally, are also personally guaranteed by the borrower or its principals. The loans are generally for a term of one to three years. The loans are initially recorded and carried thereafter, in the financial statements, at cost. Most of the loans provide for monthly payments of interest only (in arrears) during the term of the loan and a “balloon” payment of the principal on the maturity date.
 
For the nine months ended September 30, 2017 and 2016, the aggregate amounts of loans funded by the Company were $33,792,878 and $14,849,831, respectively, offset by principal repayments of $14,637,831 and $10,921,370, respectively.
 
For the quarter ended September 30, 2017, the Company closed loans ranging in size from $10,000 to $1,200,000 with stated interest rates ranging from 11% to 12% and a default interest rate for non-payment of 18%.
 
At September 30, 2017, no single borrower had loans outstanding representing more than 10% of the total balance of the loans outstanding.
 
The Company generally grants loans for a term of one to three years. In some cases, the Company has agreed to extend the term of the loans. A loan that is extended is treated as a new loan. However, prior to granting an extension, the loan underwriting process is repeated.
 
In November 2016, the Company purchased a mortgage note at a discount of $74,954 and then subsequently refinanced the note obtaining additional collateral and payment terms consistent with similar notes held by the Company. The discount is being amortized over the three-year life of the refinanced loan.
 
Credit Risk
 
Credit risk profile based on loan activity as of September 30, 2017:
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
Outstanding
 
Performing Loans
 
Residential
 
Commercial
 
Land
 
Mixed Use
 
Mortgages
 
September 30, 2017
 
$
35,512,825
 
$
12,375,768
 
$
4,545,931
 
$
259,133
 
$
52,693,657
 
 
The following is the maturities of mortgages receivable as of September 30, 2017:
 
 
2017
 
$
8,005,973
 
 
2018
 
 
27,495,413
 
 
2019
 
 
7,147,929
 
 
2020
 
 
10,044,342
 
 
Total
 
$
52,693,657