The objective of this memo is to provide a simplified overview of mortgage enforcement. Richardson Law acts on behalf of all Hosper investors to address any mortgage in default. Meanwhile,
Hosper works in parallel to pursue other solutions. We are often successful to resolve the default without selling the property, however, the legal process is often a necessary catalyst to motivate a solution.
Watch: What if a borrower defaults?
Watch: What is the mortgage enforcement process?
In the meantime, here are some important things to know.
- Hosper will generally commence mortgage enforcement activities when a mortgage is more than 60 days in arrears without a clear payment plan.
- It is much easier to delay enforcement than to undo actions taken. Sometimes we may recommend delaying enforcement if other solutions are possible.
- Investors are not required to pay any legal retainers to commence routine enforcement activities. Richardson Law will work in good faith and the final legal bill will be applied to the proceeds of sale.
- In some situations, we may suggest investor(s) provide additional funds to maintain the payments on a prior mortgage or to payout a prior mortgage in full. This will never be required but may be strongly recommended.
- When we escalate a mortgage for enforcement, we no longer process payment under the mortgage, and we direct all borrower correspondence to Richardson Law.
- Interest always accrues throughout the duration of enforcement despite non-payment.
- Hosper provides updates to investors at the following checkpoints:
- When Richardson Law is instructed to commence enforcement under a mortgage.
- If/when the borrower provides proof of a firm sale, refinance, or ability to pay.
- If/when we take possession of the property.
- If/when we list the property for sale.
- if/when we receive a firm offer for sale of the property.
- The timelines can be quite different for each case, however, we generally estimate:
- Legal "Power of Sale" process to obtain possession. (6-8 months)
- Eviction and preparing property for sale (1-2 months)
- Listing and sale of property (varies based on marketability)
It is important to reiterate this is a simplified overview of a complex process.
At any point in time, if you wish to discuss the details of your specific scenario, please contact your Hosper Investment Service Representative to set up a call with our principal lawyer and/or a senior member of our collections team.