Commitments and Contingencies |
12 Months Ended | ||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Text Block] |
11. Commitments and Contingencies Origination Fees Loan origination fees consist of points, generally 2% – 5% of the original loan principal amount. Pursuant to SCP’s operating agreement, JJV, as the manager of SCP, was entitled to 75% of loan origination fees. For the year ended December 31, 2017, loan origination fees paid to JJV were $52,902. These payments are amortized over the life of the loan for financial statement purposes and recognized as a reduction of origination fee income. After the Exchange, the Manager was no longer entitled to origination fee payments. Original maturities of deferred revenue are as follows as of:
In instances in which mortgages are repaid before their maturity date, the balance of any unamortized deferred revenue is generally recognized in full at the time of repayment. If the borrower is entitled to a partial refund of the origination fee collected in connection with a prepaid loan, the Company credits the refundable portion against the balance due on the loan. For the years ended December 31, 2018 and 2017, approximately $76,200 and $74,000 of origination fees were refunded in connection with prepaid loans. Loan Servicing Fees Prior to the Exchange, JJV was responsible for servicing SCP’s mortgage loan portfolio and for administration of the affairs of SCP for which it received compensation. At JJV’s discretion, the loan servicing fee ranges from one-twelfth (1∕12th) of one-half percent (0.5%) to one percent (1.0%) of the loan portfolio , payable monthly and calculated based on total loans as of the first of each month. The percentage charged by JJV was 1.0% for the year ended December 31, 2017 prior to the Exchange. For the year ended December 31, 2017 loan servicing fees paid to JJV were $32,778.Other Manager Compensation JJV was also entitled to fees for other services performed such as inspection fees. For the year ended December 31, 2017, fees paid to JJV for such services were $3,069. Employment Agreements In February 2017, the Company entered into identical employment agreements with John and Jeffrey Villano, executive officers of the Company, pursuant to which: (i) the employment term is five years commencing February 9, 2017, with extensions for successive one-year periods unless either party provides written notice at least 180 days prior to the next anniversary date of its intention to not renew the agreement; (ii) effective as of April 2018, each receives an annual base salary is $360,000, increased from $260,000; (iii) each is entitled to incentive compensation in such amount as determined by the Compensation Committee of the Company’s Board of Directors; (iv) each is entitled to participate in the Company’s employee benefit plans; (v) each is entitled to full indemnification permitted by law; (v) each is subject to a two-year non-competition period following the termination of employment without cause; and (vi) each is entitled to payments upon termination of employment or a change in control.
Unfunded Commitments At December 31, 2018, the Company had future funding obligations totaling $5,963,355, which can be drawn by the borrowers when the conditions relating thereto have been satisfied. (See Note 6 – Escrow Deposits.) Other In the normal course of its business, the Company is named as a party-defendant because it is a mortgagee having interests in real properties that are being foreclosed upon, primarily resulting from unpaid property taxes. The Company actively monitors these actions and in all cases, there remains sufficient value in the subject property to assure that no loan impairment exists. At December 31, 2018, there were nine of such properties, representing approximately $1.4 million of mortgages receivable. |
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