Investors: Risks

Associated Risks

There are risks associated with Trust Deed Investments that Investors should be aware of. These risks include:

1.

Trust Deed Investments are not insured by the FDIC or any other government agency. Additionally, HanoverMC, its principals, and associates are not allowed to guarantee the success of the investments. The investments involve certain risks and are suitable only for persons of adequate means who anticipate no need for immediate liquidity.
2.
We are not a financial source or resource for real estate investors looking for advance private funding for foreclosure sale property purchases or discounted real estate for sale, nor for venture capital funding for speculative real estate investing. A valid purchase contract signed by both buyer and seller is required for consideration of a hard money purchase loan.
3.
The borrower’s ability to repay the loan will depend upon the borrower’s financial conditions, which could change over time.
4.
There are general risks associated with real estate investments including general or local economic conditions, neighborhood values, interest rates, real estate tax rates, the supply of and demand for properties of the type involved, the ability of the borrower to obtain necessary alternative financing, governmental rules and acts of God.
5.
Although the investor makes the investment decision, the success of the investment will depend, in part, upon the experience and quality of the management of the mortgage broker. You should not entrust all aspects of the investment decision and subsequent servicing to the broker without full understanding of the delegated responsibilities and rights.
6.
Default by the borrower could interrupt your monthly payments. Under extreme cases, it may be necessary to instruct Hanover Mortgage Company to foreclose or take other actions to protect your investment. It is possible for the total amount recovered upon foreclosure to be less than the amount of your total investment, with resulting loss of capital to the investor.
7.
If a borrower files a reorganization or full insolvency bankruptcy, the foreclosure process could be stalled. Trust deed investors could incur significant legal fees and costs in attempting to obtain relief from the automatic freeze on collection proceedings provided by the Bankruptcy Code. Relief consists of getting court approval to release the property out of the bankruptcy so that the property can be foreclosed upon. Furthermore, the court could modify the terms of the loan by extending the due date, changing the interest rate and payment structure, or causing the priority of the loan to be subordinated to a bankruptcy court-approved financing plan.
8.
Lack of Liquidity – TD Investments are for a pre-determined period of time. Investors must be prepared to hold these investments for the full term.
9.
Discretionary Funds – The funds invested in TD’s should be part of your overall diversified investment strategy.

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Risks
Default
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Hanover Mortgage is licensed for California only.

Disclosure: Money invested through a mortgage broker is not guaranteed to earn any interest or return and is not insured. State law dictates that we acknowledge that interest on trust deeds is not guaranteed. No investment is completely risk free and past performance is not a guarantee of future results. Before investing, investors must be provided applicable disclosure documents. Disclaimer: Private lending collateralized by Deeds of Trust is not suitable for every investor. This information does not constitute an offer to sell Deeds of Trust or a solicitation to sell securities. Private lending collateralized by Deeds of Trust involves substantial risk; before investing you should consult with a qualified financial advisor to determine whether such (risk) is suitable for your investment objectives. By accessing any page within the Investor Resource Center, you acknowledge you have read this disclaimer, and you understand if you click on a link to any listed organization you will be redirected to a non-HanoverMC Web site. You also acknowledge it is solely your decision to choose to work with any person or firm identified within these web pages. You, therefore, agree to hold HanoverMC and its officers, directors, members, employees and agents, harmless from any adverse consequences of any dealings with the individuals and firms listed herein. Mortgage Broker fees will apply unless stated otherwise. California Department of Real Estate, real estate broker license number 00428961. All Rights Reserved.