Mortgages Receivable |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage Loans on Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage Loans on Real Estate, by Loan Disclosure [Text Block] |
Mortgages Receivable The Company offers secured non-banking loans to real estate investors 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 quarters ended March 31, 2018 and 2017, the aggregate amounts of loans funded by the Company were $10,345,784 and $10,091,528, respectively, offset by principal repayments of $6,034,243 and $3,938,601, respectively. At March 31, 2018, the Company’s portfolio included closed loans ranging in size from $15,000 to $2,000,000 with stated interest rates ranging from 9.5% to 12.0% and a default interest rate for non-payment of 18%. At March 31, 2018, 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. During the three months ended March 31, 2017, JJV determined to exercise its option to share in 75% of this discount in the amount of $55,390. Amortization of this discount was $1,630 and $1,630, for the periods ended March 31, 2018 and 2017, respectively. Credit Risk
Credit risk profile based on loan activity as of March 31, 2018 and December 31, 2017:
The following is the maturities of mortgages receivable as of March 31:
At March 31, 2018, of the 366 mortgage loans in the Company’s portfolio, 13 were treated by the Company as “non-performing”, typically because the borrower is more than 90 days in arrears on its interest payment obligations or because the borrower has failed to make timely payments of real estate taxes or insurance premiums. The aggregate outstanding principal balance of these non-performing loans and the accrued but unpaid interest as of March 31, 2018 was approximately $ 3.5 million. At March 31, 2018, all non-performing loans were referred to counsel to commence foreclosure proceedings or to negotiate settlement terms. In the case of each non-performing loan, the Company believes the value of the collateral exceeds the outstanding balance on the loan. |
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