Source: The Salt Lake Tribune —
Defaults are always a possibility for anyone lending in real estate, whether they are acting as an individual private lender or investing in “crowdfunded” real estate development. How the default situation is handled can be detrimental to the return of your initial principal investment. As a loan servicer for Trust Deed real estate investments, Ignite Funding stands behind each and every loan that it originates, often wearing many different hats in order to protect and return investor capital when default situations arise. Ignite Funding utilizes its real estate expertise to act on behalf of its investors as Default Coordinator and an Asset Manager if a default is to be resolved through foreclosure. At Ignite Funding, we can say we have a proven track record in default resolution that is backed by results to our investors, having worked through and grown from the downturn in 2008. In this article we discuss how the default process is handled at Ignite Funding when necessary.
When is a loan considered to be in Default?
A loan is categorized as being “in Default” when a Borrower fails to make a scheduled interest payment within the payment’s grace period (10 days following payment due date). In this situation, Ignite Funding will already be in contact with the Borrower to determine the timing of the outstanding payment and extract a reasonable explanation for the lack of payment. Ignite Funding will then send a communication to investors on or before the 15th of the month if a borrower fails to make their scheduled interest payment on time. During this time, Ignite Funding will transition from Loan Servicer to Default Coordinator on behalf of the investors on the defaulted loan.
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