Throughout the investment period, Groundfloor’s Asset Management team works to ensure all of our loans are performing and progressing as expected through monthly project updates, project progress monitoring, upcoming maturity monitoring, and, at times, default interest. When a borrower has lower experience, Groundfloor loans have lower leverage.

Sometimes, borrowers are unable to meet the terms of their loan with Groundfloor. When the loan is put into default, our Asset Management team monitors the project even more closely and works directly with the borrower to get things back on track.

A defaulted loan, however, isn’t necessarily a bad thing for Groundfloor investors. Investors will still earn interest from the time the initial investment is made until the time that the loan is paid in full.

As a lender secured by a first lien, Groundfloor has the right to foreclose on a troubled loan. However, we always try to resolve problem loans in a way that’s quicker, more cost-effective, and economically better than a foreclosure. If foreclosure is necessary, Groundfloor initiates the process that’s required (either Judicial Foreclosure or Non-Judicial Foreclosure).

Click here for more detailed information about what happens when a borrower defaults on a loan.