On California Specific Trust Deed Investments

 1.       Project Name:

“Keeping Families in Homes”

2.       Cash Required in US Dollars: 

1 Million per month, scaled up to 5 Million per month within 12 months.  Trust Deed Purchasers/Investors may purchase trust deeds at a minimum commitment level of $10,000.00 U.S.   

3.       What is the history of our company?

Home & Real Estate Services has been in business as a Licensed DRE Broker/Lender.  We have an “A” Rating with the Better Business Bureau and a clean record with the Department of Real Estate.    

4.       Project Summary: 

We offer short term 2nd trust deeds with the purpose of bringing the client current on all bills and repairing their credit.  At Home & Real Estate Services, you can not only help families stay in homes, but we will allow you to earn up to 15.99% rate of return on select secured trust deeds which do not exceed 65% of the true loan to value.  Our goal is to have the borrower refinanced out of this loan within twelve months.  We are looking for a relationship with a financial firm to fund our 2nd trust deed loans.  We strictly choose choice properties located in California only. 

What does our company do?

Our goal is to: Determine that the customer is in a market area where the values have not decreased or where the market is staying strong.  We do not lend in areas where the market is weak, or where there are a lot of listings or foreclosures.  To protect the purchaser/investor, we reserve nine to twelve months of advance payments within the new loan.  This guarantees your first year return.  We also determine and select which borrower is simply having a “hiccup” in their life and needs assistance, versus being a borrower that reflects the habitual nature of a credit abuser.  By so doing we are able to give a family a much needed second chance.  We will also insist the borrower pay off as much debt as possible, and we have them pay a 3rd party credit repair company to work on their credit so they can be out of this note usually within 12 months.  

Some of our services also include:

        Monitoring of payments on 1st and/or senior TDs:
o       We file form 2924b along with your recorded deed which allows you to receive notice in the event of a default on the 1st and/or senior TD giving you plenty of time to work out the situation with the borrower.
        Servicing (Billing & Customer Contact)
        Monthly calls to Borrower to determine issues of non-payment
        Setup a potential buyout of your TD (Only with your Approval)
        Foreclosure Process including the Notice of Default and Notice of Sale
        Property Value Determination if TD Purchaser determines they want to sell property
        Sales/Rental Assistance

What sets us apart from other funding sources?

We do not know of any company that has the strategy that we have.  We are quick at getting the approvals out to our brokers and are well equipped to handle a lot of business.  We do complete due-diligence on a borrower so the purchaser/investor only needs to do their basic review of our Trust Deed Pre-Purchase Disclosure form.

5.       Commitment for Funds:

Typically 2 Years, but we are open to any conversation.

6.       Brief Description of the Company:

We are a solvent cash flowing lender and loss mitigation specialist.  We have a small operation and have purposely cut our costs way back anticipating the changing market. 

Do we sell Trust Deeds? 

We will sell almost every single Note/Trust Deed.  Most of the time, the loan is funded in the name of the purchaser. 

Do we sell Trust Deeds to Multiple Purchasers/Investors? 

Yes.  In the event that multiple purchasers/investors wish to acquire one large trust deed, as a group, we will accommodate that request by putting them together on a single Note/Trust Deed.  We ourselves will assist you in the administration of that Note/Trust Deed.  The purchasers/investors simply express to us at what dollar amount they want to participate and we will do the rest.

How do we work with Purchasers/Investors? 

What we do is supply the TDP with a TDP Pre-Purchase Disclosure form (which gives the TDP all the client criteria along with the total underwriting determination), a 1003 form, 1008 form, credit, appraisal, secondary opinion of value from our own appraiser, a letter of explanation as to how the borrower came to be in their situation, and the projected plan of action to get them out of their situation using their new loan showing allocation of funds if needed.  They are our “bread and butter”.  Our goal is to give you all the information necessary so you can jump on the trust deeds you like the minute we get them.

7.       Economic Downside:

Sub prime market fall out has affected property values in the areas we choose not to lend in.  We fully expect that values will continue to be affected for up to 2 more years.  However, it is pretty easy to read the market when you are checking and utilizing the many different technologies available.  Multiple Listing Services is just one resource that will provide us with the needed data to give present value. (See Collateral)

8.       Collateral Determination (Borrowers Home)  This is Our Specialty:

We first determine that a borrower has the ability to pay; we then find the true value of the home.  We don’t just look at previous sales within their neighborhood, and we definitely don’t just accept the value of the appraisal that the broker submits to us.  Most every appraisal that we receive from the broker representing the client shows only the other home sales that will substantiate the value they are trying to convince us of.  We always get a 2nd value check by doing a desk review with a 3rd party appraiser.  This desk review is VERY important.  This appraiser is determining values from the side of the Investor/Purchaser. 

Additionally, what kind of note is the 1st trust deed?  Example:  Borrower has a note that is going to convert to a high interest within the first 12 months of the loan that we are going to do for them.  The borrower may not be able to afford the payment upon conversion of their adjustable mortgage.  This is important in considering the borrower’s ability to pay.  It might also be a loan that the Purchaser/Investor would not want to take on in the event of a foreclosure of the property.  In the event that the borrower does not make the payments on the 1st trust deed, the Purchaser/Investor must make a partial advance payment to the 1st and file a foreclosure on the borrower.   

We could have an agreed upon 3rd party opinion department on the trust deeds’ value prior to the file docs being signed by the borrower.  Otherwise, we would use the brokers’ appraisal and our 3rd party appraisal review team.

What type of properties do we prefer to have borrowers secured by? 

Our desire is California Single Family Residences or 2-4 units properties.  All properties are in strong market areas.  We prefer a.) Market areas where the values have remained strong, b.) Where there have not been a lot of foreclosures and c.) We look for the length of time in which houses within that neighborhood remain on the market.  

9.   Purchaser/Investor Exit Strategy: 

a.       All borrowers must have the ability to pay
b.       All borrowers must have a great property
c.       All borrowers must be in a strong market area for values
d.       All borrowers must pay nine to twelve months of advance payments
e.       All borrowers must get their credit repaired through the loan
f.         All borrowers must pay off as much debt as possible through the loan
g.       The 1st trust deed must be brought current (if not already current) by the new loan
h.       All other liens must be paid off through the loan
i.         All borrowers stipulate to selling the home through us in the event of a default on their 1st or 2nd trust deeds
j.         All brokers must attempt to have them refinanced within 9 months or our company will attempt to refinance them
a.       The borrower selling the property
b.       The borrower refinancing the 2nd trust deed
c.       Foreclosure, then sale of the property

10.   Funding:

We would have the Purchaser/Investor sign off on a Pre-Purchase Disclosure form prior to giving the Purchaser/Investor wiring instructions.  All monies would be wired directly to an escrow company’s trust account.  This would apply even if coming from multiple sources to fund one trust deed.

11.   Recording:

We would list your financial institution or your investors as the beneficiary on our loan documents.  This would give immediate collateral as to the funds by allowing for the deed to be put into your name within 24 hours of funding the trust deed. 

12.   Securing the 1st Year of Payments From the Client:

Our goal is to help “Keep Families in Homes”.  This is our corporate motto.    Nine to twelve months of payments would be collected through the loan to give to Foreclosure Consultants, Inc. (FCI), our servicing company.  The funds would be put into a trust account to pay the monthly payment on behalf of the client.  These funds would then in turn be disbursed to you on a monthly basis.  We would file and record the “Request for Notice 2924b”, which reports to us any Notice of Default filed on the 1st trust deed.  FCI allows for a partial advance to be made to the 1st trust deed holder which would give us the right to default the borrower on the second (whether advance payments have been made on the 2nd or not).  This means minimal cash outlay and quick foreclosure response times.  That way at the sale, our outlay is substantially reduced.

13.  Fico Score Enhancement:

     We will pay through the loan for the client to have their credit repaired by a select licensed and bonded credit repair company.  When disputing a credit report, the majority of all objectionable items come off of a credit file within the first 4-6 months. 

14.   Borrower Debt:

We would limit the “cash out” proceeds to the client.  All liens, and to the greatest extent possible as much non-lien debt, would be paid off through the loan.  We would bring current any 1st trust deed and on occasions take reserves to pay the 1st TD for a few months.

15.   Refinance Options:

We are and would be contracted with the brokers that send us these loans to make sure that they refinance the client within 9 months.   If they do not, we retain the right and opportunity to contact the client and do so ourselves.  We are always in touch with the client and often are the one that the client wants to do the new loan with.  We refer them back to the broker until the broker fails to refinance the client.

16.   Billing/Servicing:

We use Foreclosure Consultants, Inc. for all billing/servicing on 2nd TDs.   They are the largest junior lien servicing company in the country.  They bill over 1 billion per month in 2nd trust deeds.   They handle all servicing, disbursements through direct deposits, foreclosures, and bankruptcies.  All payments from all trust deeds would automatically go into the account of your choice.  They will provide a report on all liens and allow for on-line access giving status of all clients.  They can also provide email status as to all clients.  Remember that this would be largely uneventful the first 12 months as most payments are made for the clients through the loans we are giving them. 

17.   Foreclosure and Real Estate Owned:

We can assist you in the entire management aspect of the trust deed.   For the duration of the loan, Home & Real Estate Services monitors the 1st trust deed for the purpose of making sure they do not go to sale prior to your ability to foreclose on the property.  In the event of any default on the 1st trust deed, we take action.  Upon funding the loan, we file and record a 2924b form at the recorder’s office.  The recorder’s office will then automatically notify us of any Notice of Default filing from the lender that holds the 1st trust deed.  In that event, you will have to bring the 1st trust deed current.  Upon bringing the 1st current, Foreclosure Consultants, Inc. will then file your own Notice of Default on the 2nd.  This puts you in the proper position to set the price at the sale of the property.  After a ninety day waiting period from the Notice of Default filing date, Foreclosure Consultants, Inc. will file the Notice of Sale.  The sale date is generally twenty one days from the filing of the Notice of Sale.  Upon the sale taking place, the note and deed on the 1st would then be transferred to the purchaser/investor and they would be responsible for that note on the 1st trust deed and all equity in that home would become a part of the purchaser/investors asset base.  A very detailed diagram is attached to this document showing the entire process of acquiring your asset by foreclosure.

To learn more about our trust deeds or to schedule an Trust Deed consultation, please call (949) 812-6301.