Mortgage documents are prepared and reviewed by an experienced panel of legal firms experienced in mortgage finance, verification and validation requirements, who also attend to settlement of the mortgage.
Apac does not require lenders mortgage insurance on loans made through the Fund.
In the case of construction or a development loan, normal construction funding conditions such as receipt of independent engineers and/or quantity surveyors report confirming costs expenses and cost to complete the project will be required before any construction loan advances are made.
Our loan management operations are extensively computerised and collection of payments from borrowers and payments of distributions utilise the electronic banking system for efficiency. The system enables us to monitor areas such as interest payments, arrears, and insurances.
There is also monitoring of the expiry of insurance policies. In the event that a borrower fails to provide evidence of renewal of an insurance policy, Apac takes action to ensure that a replacement policy is issued.
Arrears and default management
Borrowers may be late in paying interest or in meeting their repayment obligations, or may be unable to do so. Apac has a well-developed policy of pursuing defaults and arrears and for instituting appropriate recovery action. These include,
- Monitoring all due dates for payments and billing any overdue payments.
- Following up overdue payments where appropriate, usually within 5 business days after the due date for payment of interest or repayment of capital. Higher interest may be charged on overdue payments.
- Issuing notices if payments remain in arrears for 30 days.
- Instituting legal proceedings for possession of the secured property if the Borrower fails to comply with the issued notices.
- Selling the secured property once a possession order has been obtained.
For the purpose of the information below, a loan is considered to be in “default” if either the payment of interest is more than 30 days in arrears or the loan has not been repaid within 30 days after the due repayment date. In either case, we will notify the relevant investors.
Affected investors will be notified of the action being taken by us to remedy the default at the time the default notice is sent to the borrower.
Where a default has not been rectified and the secured property is sold, the net available proceeds of the sale of the secured property will be distributed in the following order,
- Investors are repaid the amount of their principal investment.
- Investors are paid any interest (including default interest owing) which has accrued under the loan
- Apac is reimbursed for all administration costs and expenses it incurs in enforcing the mortgage and arranging for the sale of the secured property, and in the case of construction and development loans, any additional costs incurred to prepare the secured property for sale.
- Apac is paid any management fees in respect of the loan investment.