FIRST OF ALL, CONTACT US IMMEDIATELY if you have a property of ANY kind that you don’t want any more, especially if you can leave the current mortgage in place for a while: this especially pertains to over-encumbered properties! We’ll take them off your hands in hummingbird’s heartbeat! (Well…that’s maybe too quick…’how about in a manatee’s or a three-toed tree sloth’s heart beat? That’s still pretty fast!)
BASICALLY, HERE HOW WE CAN WORK WITH YOU:
First, we ask that you make telephone and E-mail contact with us, so we might discuss the property and determine the situation (i.e., the value-to-loan ratio, the monthly payment amounts and the amount of any arrearages and/or penalties currently due.
The amount of monthly payments or the home value relative to “normal” is not usually important to us at all (‘because we are not “normal”)..
We next arrange to meet you at the property, take some pictures, and talk about any repairs or improvement that might be needed (if any).
We then ask that you,–at our expense–place the property’s title with a bonafide trustee (i.e., a non-profit 501C California charitable corporation) for a title holding land trust. At which point you become the trust’s “settlor” (“grantor” or “trustor”) and the trust’s sole beneficiary, with full Power-of-Direction (i.e, over all actions and duties of the trustee).
Next, we ask that you name us as a co-beneficiary with you in your trust (‘note that there is no title transfer to us in this scenario): at which point you assign to us a 90% beneficiary interest,* along with mutual power of direction (i.e., ‘as a co-beneficiary, we cannot direct the trustee in any manner unless you are in full [100%] express [“written”] agreement with us).
The contract between us (the Beneficiary Agreement) will then allow me to market for, and nominate a third co-beneficiary in the trust who will live in the property and handle payments, insurance, taxes,management, and maintenance…with my guarantee and ‘under threat of immediate eviction and loss of their posted Contingency Fund in the event of payment default.
Due to the nature of the transaction’s structure, judicial foreclosure, default-notification time limits, demurrers TRO’s and/or forced ejectment actions (‘all the “tricks” of the professional tenant mooch) will never become obstacles due to the trust structure.
Generally, a property that is no more than. say 10% to 15% over-encumbered requires no participation on the part of the mortgage debtor of record (you); however, if the monthly payments would prove too blatantly exorbitant, the following explains how we determine the homeowner’s financial participation (‘should such become necessary).
Upon your acceptance, we will market the property to our buyer (fully with his/her knowledge and acceptance) at about 10%-15% more than the actual appraised value (i.e., quite reasonable in view of the very low qualification parameters and the small amount of upfront cash required). But should that amount constitute less than at least, say, $100 per-month in positive cash-flow to me for the term of the agreement, we then ask that you cover the overage in re. the mortgage payments until the property appreciates a bit (‘we will, of course, have it re-evaluated semi-annually at your direction, for the term of the agreement).
Once we place our resident beneficiary in the trust and in the property, our agreement is generally for a period of at least five (5) years: at the end of which the resident beneficiary is obligated to do one of these four things:
- Refinance the property in it’s own name and pay to us our share of any profit gained,
- ‘Sell the property and pay us our share of any profit gained,
- Petition for renewal or extension of the contract for another 2, 3 or 4 years (‘you and I retain the absolute right to refuse or append), or
- Return the property to us in move-in, marketable condition…’or forfeit all of the prepaid Contingency Fund, along with any improvements having been made to the property. All necessary repairs are the responsibility of the resident beneficiary, who is remains subject to litigation in the event of a default in his/her obligation.
NOTE that our associate company, Open Door Wealth Management Group, and its predecessor companies have participated in well over 7,000 of these types of transactions over the past 25+ years without a single failure or unresolved problem (‘functional or legal) for any of their clients. Note however, that ODWMG has, over that expanse of time, been included in lawsuits on various levels (i.e., prior to, say, 7-8 years ago); but they have consistently won, or were released, in every case due to the integrity of the ODWM EHTrust® model.