Until March 11, 2019, the Company leased office space, on a month-to-month basis, in a building owned by Union News of New Haven, Inc., an entity that is controlled and %-owned by Jeffrey Villano, the Company’s co-CEO. Rent and other facility related charges paid by the Company to Union News for each of the periods ended March 31, 2019 and 2018 was $. The Company has moved to its new office in March 2019 so no further rental payments are payable to JJV.

 

Prior to the Exchange, from time to time, JJV would acquire certain troubled assets from third parties who were not existing SCP borrowers. In such instances, JJV would borrow money from SCP to finance these acquisitions. As part of the Exchange, the Company acquired the notes evidencing these loans from SCP. The principal balance of the loans to the JJV at March 31, 2019 was $. The Company accounts for these arrangements as separate loans to JJV. The income earned on these loans is equivalent to the income earned on similar loans in the portfolio. All underwriting guidelines are adhered to. The mortgage documents allow JJV to sell the properties in case of default with proceeds in excess of loan principal and accrued expense being returned to JJV. Since the Exchange, the Company no longer loans money to JJV. During the three months ended March 31, 2019 and 2018, JJV paid $ and $, respectively, of interest to the Company.

 

In the ordinary course of business, the Company may originate, fund, manage and service loans to shareholders (members in the case of loans funded prior to the Exchange). The underwriting process on these loans is consistent with Company policy. The terms of such loans, including the interest rate, income, origination fees and other closing costs are the same as those applicable to loans made to unrelated third parties in the portfolio. As of March 31, 2019, loans to former partners and now shareholders totaled $. Interest income earned on these loans totaled $.

 

 

At March 31, 2019 and December 31, 2018, total amounts owed by JJV to the Company was $ and $, respectively, and is reflected as other receivables on the Company’s balance sheet.

 

For each three month period ended March 31, 2019 and 2018, the wife of one of our executive officers was paid $ for accounting and financial reporting services provided to the Company.