| |
| Tuesday, October 7, 2008 |
| Borrower | A developer in Wells, Maine, through a single-purpose LLC. | |
| Loan | A $3,468,000 Five year loan at 12% the first year, and 18% thereafter. $1,453,000 was advanced at closing, the remainder as the development work was carried out. | |
| Collateral | The loan is secured by a first mortgage on 360 acres of land near the town of Wells in Maine. The land is farmland at this time, and will be developed as a country club with an 18-hole championship golf course and a 9-hole par 3 course, a practice range and a 12,000 square foot clubhouse. | |
| Guarantors | The developer and his wife. | |
| Purpose | The loan will re-finance some existing debt and provide funds sufficient to complete the central water and septic systems and bring 31 lots to market. In addition, $550,000 is earmarked for construction work on the Golf Course. | |
| Exit strategy | The borrower plans to repay the loan from the proceeds of lot sales. We will release finished lots for the greater of 75% of the gross sales price and 80% of the net after commissions and closing costs. | |
| Outcome | The Borrower defaulted on his interest payments. A purchaser was found, and the loan was repaid in full. |
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