How does SCP recover funds from a defaulted loan?
SCP holds a registered first mortgage over the property securing the loan. If a borrower defaults and cannot remedy the situation, we have the legal right to enforce the mortgage.
This typically involves:
- Issuing a PLA notice and allowing time for compliance.
- If unresolved, initiating a mortgagee sale of the property.
- Applying sale proceeds first to cover the outstanding loan principal, accrued interest, and any enforcement costs, then default interest (if any).
If the property value has declined significantly, there is a risk of a shortfall, which may impact investor returns.