What security helps with
Registered security establishes an enforceable claim over an identified asset and a ranking relative to other creditors. In a default, that position is what a recovery process works from.
What remains at risk
Recovery is a process, not an outcome. It takes time, incurs costs, and depends on what the property realises in the market conditions of the day. Payments can be delayed or missed before any of that begins.
- Delayed or missed interest and principal payments
- Borrower default and formal recovery action
- Recovery costs reducing the amount returned
- Property values falling between assessment and sale
- A shortfall, meaning partial or total capital loss
