What can the HEFI Owner do in the event of default by homeowner?
What could happen if the homeowner becomes in default: There are serious consequences of default under the HEFI Agreement. For example: a. The HEFI Owner would have the right (but not the obligation) to make a default payment on behalf of the homeowner and then cause an increase in the Investor’s percentage interest in the home. If the HEFI Owner chooses to make such a default payment, the homeowner would be required to execute certain additional documents necessary to increase the percent of the HEFI Owner’s interest in the property. However, the homeowner would have the right (for a limited time) to redeem any such increase by paying the HEFI Owner the amount of the default payment made on the homeowner’s behalf plus interest from the date of the default payment. b. The HEFI Owner would be able to take legal action against the homeowner and there could be a forced sale of the home.
