START YOUR OWN “BUY FORECLOSURES” CORPORATION with a prospectus to investors to come in with you. SEND prospective
CLIENTS something along the lines of THIS ARTICLE.
HELLO, WE ARE HELPMATE PARTNERS INC. AND WE HELP YOU
STAY IN YOUR HOME IF FORCLOSED, though we also actually BUY FORECLOSED HOMES and
rent them back to OWNER, or one can outright SELL YOUR HOME TO US, depending on
which you are. Or you can be an investor and take your share of the profits as we fix and flip. We
are sending you a sample document to
inspire you to join us. (ED LOPINSKI wrote this, Anita just posted it.)
Ø Foreclosure law suits are filed in Court against thousands of people in LA County on an annual basis (26,000 new filings are estimated for 2005).
Ø The objective of our company is to seek out these people in Los Angeles and offer them an alternative to losing their home in a future real estate auction.
Ø For eligible home owners, our alternative is simple, direct and provides a solution which allows them to remain in their homes, with the right to reclaim it at any time during a 2 year period.
What We Do
Ø We make contact with the home owner(s) in foreclosure (both on a mailings and direct “door to door” basis).
Ø We offer to buy their home from them while simultaneously giving them an Option to Repurchase it at any time during a 2 year time frame, whereby they retain possession of their home as tenants pending the possible exercise of their Repurchase Option contained in a Lease Agreement. This offer will be made only to eligible home owner(s) in foreclosure.
Ø Instead of monthly mortgage payments, the former home owner(s) in foreclosure will pay us rental payments during the term of the Lease Agreement.
Ø Monthly rent under the Lease Agreement is approximately the sum of the monthly mortgage payment and tax/insurance escrow payments previously paid by the home owner(s) in foreclosure.
Ø After we purchase the home of the owner(s) in foreclosure, we obtain a new mortgage in our name. We then pay the required new monthly mortgage payments on the residence.
Ø Proceeds from the new mortgage are used to pay off the original mortgage of the home owner(s) in foreclosure, thereby eliminating the payment default and stopping the foreclosure action.
Ø In summary, eligible home owner(s) in foreclosure will become our tenant during the term of their Lease Agreement and pending their exercise of the Repurchase Option contained in the Lease Agreement (industry research indicates that approximately 30% of our tenants will exercise their Repurchase Options).
Initial Contact Procedures
Ø On a daily basis, representatives will be provided with a contact list in their area. The list will be in the format attached as (Exhibit A), and will include the name and address of the home owner(s) being foreclosed on.
Ø The contact list is time sensitive and should be acted upon within 24 hours. Our research indicates that the sooner we contact the home owner(s) in foreclosure, the more successful we will be in closing the transaction.
Ø Most of these people work during the day. We strongly recommend that they be contacted between 5-8 PM M-F and 10-3 PM on Saturday.
Ø The home owner(s) in foreclosure is (are) under a great deal of pressure, may be in denial concerning their situation and may refuse to discuss this matter with you. Mild persuasion is all right, but if they still refuse to discuss their situation, leave a brochure and card with them and promise to stop by again.
Ø If the home owner(s) in foreclosure is (are) interested in our solution to their problem and invites you into their home, the transaction can be initiated that evening. At this point, the home owner(s) becomes an “Applicant” or “Applicant(s). The following documents are required to be completed and/or signed by the Applicant(s):
A. An Application Letter will be signed by the Applicant (Exhibit B-1). A copy of this letter will be left with the Applicant. Under the terms of this letter, the Applicant has ten business days to provide us with all requested documents. If the Applicant meets this requirement and they are subsequently not approved by the Company, their Quit Claim Deed (see G below) and their $500 application fee (see H Below) are returned to them. If the Applicant does not forward all the required documentation within ten days of the in-house visit, their application fee is forfeited.
B. Applicant Status Sheet (Exhibit B-2). This sheet is used to summarize your notes of the initial (and any required follow up) meetings with the Applicant(s).
C. Applicant Information Sheet (Exhibit B-3). This sheet obtains information concerning the suitability of the Applicant(s) as a future tenant. Not all Applicants will prove suitable.
D. Financial Statement (Exhibit B-4). This form obtains information concerning the financial viability of the Applicant(s). We will not accept a financially non-viable Applicant.
E. Letter of Authorization (Exhibit B-5). This form authorizes us to obtain information concerning the Applicant’s mortgage, directly from their mortgage company.
F. Lease with Option to Repurchase (Exhibit B-6). This Agreement gives the Applicant(s) possession of the property during the 2 year term of the Agreement, with the right to re-acquire the property at any time in conformity with the Lease Agreement. If the Application is approved, the company will execute this document and will return it to the Applicant(s). Upon return of the Lease Agreement, the Applicant(s) becomes a tenant.
G. Quit Claim Deed (Exhibit B-7). This document transfers ownership of the Applicant’s property to our company (if the transaction is not approved, the Quit Claim Deed will be returned to the Applicant). Note: this document must be notarized at the time it is signed by the Applicant(s).
An Application Fee of $500 is required. The Applicant should hand you a $500 check made out to Enterprise/Los Angeles, Inc. The Representative should mail this check to the Company with the documentation package. If the transaction is subsequently rejected by the Company, the $500 check will be refunded to the Applicant, unless the Applicant has failed to provide the Company with all the documentation requested during the in-house visit within ten business days from the visit.
H. Other Document Requirements (See Checklist at Exhibit B-8). A number of other documents may be required from the Applicant(s) to evaluate their viability as a tenant. The only documents we request you obtain from the checklist at Exhibit B-8 during your initial contact are:
i. A recent mortgage statement(s) from the foreclosing mortgage company (and any from any other mortgages i.e.: home equity loans or other lien positions)
ii. The Court papers which the Applicant has been served with concerning the Foreclosure Action. The Court papers will be copied by the Company and returned to the Applicant within seven days of receipt.
Note: The other documents required will be via the attached checklist (Exhibit B-8). These will take the Applicant time to accumulate. The Applicant should be instructed to forward them to our offices by mail with 10 business days of the in-house visit.
Summary of Documentation required to be
Forwarded to the Company
The Application package is now ready to be submitted to our company for evaluation. A summary of the minimum documents required for submittal are as follows:
Ø Application Letter (must be signed by the Applicant)
Ø Copy or original of the Applicant Status Sheet
Ø Applicant Information Sheet
Ø Applicant Financial Statement
Ø Letter of Authorization (must be signed by applicant (s)
Ø Lease Agreement with Option to Repurchase (must be signed by Applicant (s))
Ø Quit Claim Deed (Must be signed by Applicant (s) and notarized)
Ø A $500 Application Fee (check should be made out to Enterprise/Los Angeles, Inc.)
Ø Recent Mortgage Statement
Ø Court papers re: foreclosure
NOTE: The Applicant(s) should be reminded to accumulate the remaining documents needed per the Exhibit B-8 Checklist and forward them to our offices within ten business days of the in-house visit.
Upon receipt of the Application package, the transaction will be evaluated by our company. This process normally takes a maximum of 7 business days.
Ø If the transaction is rejected:
A. The Applicant(s) will be notified by first class mail.
B. Their $500 Application Fee will be refunded, unless the Applicant(s) fail to provide us with the requested documents within ten business days of the in-house visit.
C. The original Quit Claim Deed will be returned.
Ø If the transaction is accepted:
A. The Lease Agreement will be executed by one of our authorized signers. A copy of the Lease Agreement will be returned by first class mail. At this time the Applicant(s) become our tenant.
B. The Quit Claim Deed will be recorded by the Title Company.
C. Our new tenant will then be mailed a monthly rental bill from our company.
D. The commission payment will be transmitted to your central office for disbursal to you.
Ø Closing procedures:
A. The mortgage on the residence will then be re-financed in our Company’s name.
B. The foreclosure action will then be halted.
Format of Daily Contacts
Applicant(s) Status Sheet
Applicant(s) Information Sheet
Applicant(s) Financial Statements
Letter of Authorization
Lease with Option to Repurchase
Quit Claim Deed
Other Documents Required
THEN THE PROSPECTUS AND DEAL MEMO is for investors.
<===== BACK TO THE BUY REAL ESTATE INDEX PAGE