Other than Adjustable Rate Mortgages (ARM), how does the Partnership mitigate against the effects of economic changes such as inflation or recession?
The Partnership’s trust deeds could be viewed similarly to what is commonly referred to as “laddering”. The overwhelming majority of the Partnership’s loans have been written with a balloon date of five years or less. Accordingly, on average, 20% of the portfolio will be paid-off or rewritten every year reflecting the then prevailing economic conditions. New capital and accrued earnings are loaned out reflecting the then prevailing economic conditions All of the Partnership ARM loans have a floor below which the interest rate will not be adjusted.
