Investors

Many investors ask us, “What are the risks associated with these types of investments?” This is a very important question to address, because, as with any investment, there are risks involved and they must be fully understood by the investor prior to making an investment commitment. This document is intended to provide an overview of some of the more frequently asked questions pertaining to risk that we receive, however, it is not intended to supplement or replace the investor subscription documents in which all “risk factors” associated are fully disclosed. For a more detailed explanation, it is important to thoroughly review the investor subscription documents in their entirety prior to making an investment commitment.

Who will be responsible for Loan Servicing?
Loan Servicing will be handled by an outside 3rd party servicing organization. Verdeo will coordinate this function on behalf of the investor and the applicable servicing organization will be fully disclosed prior to recording of the private note. Loan Servicing will consist of all payment processing, investor payments, accounting for late payment fees, collection activities, interest statements, payoff demand statements, etc.

What if the borrower is delinquent on their loan payments?
In the event of a delinquent payment, the Loan Servicing Organization is required to notify both the investor (note holder) and Verdeo Capital. When this occurs, depending on the severity of delinquency and / or default, a collection strategy will be determined (in conjunction with the Loan Servicing Organization) and communicated directly to the investor. Regardless of who is servicing the loan, Verdeo will continue to monitor the situation and communicate directly with the investor until the problem has been resolved.

What if the borrower continues to be delinquent on their loan?
It is important to note that there is a big difference between being delinquent on payments and being in default on their loan obligation. It is relatively common for borrowers to be delinquent in payment from time to time. In these cases, as it clearly states in their note obligation, late payment fees will be assessed accordingly. These late payment fees are passed through directly to the investor.

What if the borrower defaults all together on their loan?
There are many remedies for defaulting notes and many options to consider between best and worst cast scenarios. Best case is a “work out” program in which the borrower refinances their existing mortgages through an outside entity or Lending Institution. Worst case, would be to pursue full foreclosure proceedings via a legal team specializing in asset protection. It is important to remember that the private note is fully secured against Real Property. With that said, it is never in the borrowers interest to allow a defaulting situation to escalate. In any event it is Verdeo’s intention to ensure that all funds are recovered. Regardless of the outcome, Verdeo remains involved in the entire transaction from beginning to end.