| |
| Borrower | A family trust. | |
| Loan | A $2,700,000 - five-year loan with interest at 12% for the first year , and 15% for the second year and 18% for the third and subsequent years. | |
| Collateral | A first mortgage on the borrower's 13,850 acres of ranchland in Oregon | |
| Guarantors | The trustee of the trust, who is also the beneficiary. | |
| Purpose | The borrower was able to keep ownership of the property, which was on the point of being foreclosed by the local bank. This loan gave the borrower time to liquidate some of the land in an orderly fashion. The intention was that there should be some land left when the loan was paid off. | |
| Exit strategy | The borrower planned to repay us from the proceeds of sale of some parcels of ranch land. | |
| Outcome | The loan is in default. The borrower has repaid some $600,000 from the sale of one parcel, but has not managed to sell any more of the property. Meanwhile the interest paid in advance has been used up. The borrower has no other sources of cash to service the loan. We are satisfied that the collateral will fetch sufficient to repay our principal and interest. |
© Pubsy.com - all rights reserved
Textures courtesy of the Absolute Background Texture Archive