Quarterly report pursuant to Section 13 or 15(d)

Finance Receivables - Special Product (New Neighbor Guaranty program)

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Finance Receivables - Special Product (New Neighbor Guaranty program)
9 Months Ended
Sep. 30, 2018
Special Product (New Neighbor Guaranty Program) [Member]  
Accounts Notes And Loans Receivable [Line Items]  
Finance Receivables

Note 3. Finance Receivables – Special Product (New Neighbor Guaranty program)

The Company typically funds amounts equal to or less than the “Super Lien Amount”.  During 2012, the Company began offering Associations an alternative product under the New Neighbor Guaranty program where the Company funds amounts in excess of the “Super Lien Amount”.  

Under this special product, the Company purchases substantially all of the outstanding past due assessments due from delinquent property owners, in addition to all interest, late fees and other charges in exchange for the Company’s commitment to pay monthly assessments on a going forward basis up to 48 months.  

As of September 30, 2018, maximum future contingent payments under these arrangements was approximately $269,000.     

Delinquent assessments and accrued charges under these arrangements are as follows:

 

 

September 30, 2018

 

 

December 31, 2017 (Audited)

 

Finance receivables, net

 

$

264,000

 

 

$

339,000

 

Delinquent assessments

 

 

799,000

 

 

 

1,200,000

 

Accrued interest and late fees

 

 

515,000

 

 

 

728,000

 

Number of active units with delinquent assessments

 

 

68

 

 

 

97

 

 

Allowance for credit losses are recorded for losses that are considered “probable” and can be “reasonably estimated” in accordance with ASC 450-20.  Recoverability of the Company’s Original Product is generally assured because of the protection of the Super Lien under Florida statute and as such no allowance is recorded.    

Credit losses on the New Neighbor Guaranty product were estimated by the Company based on analyzing the investment in each unit and comparing that balance to the average payout for completed units for the past 12 months. The allowance for losses based on these analyses, had a remaining balance of $51,000 as of each of September 30, 2018 and December 31, 2017.