Purchasing a Note and Deed of Trust
Investing in Notes and Deeds of Trust is a compliment to most investment portfolios.
• Trust Deed investments can earn higher interest than many other investments.
• Most Deeds of Trust are in first lien positions.
• Most Deeds of Trust have regular monthly payments.
• Each Deed of Trust is secured by real property in Arizona.
• Deeds of Trust are suitable for IRAs and other retirement accounts when you have a qualified custodian. Many private
pensions, family trusts and corporate organizations purchase Deeds of Trust from Cattlemen's Mortgage.
• Each Deed of Trust is title insured.
• All Deeds of Trust are serviced by independent title or escrow companies.
Why a Trust Deed Investment?
Cattlemen's Mortgage offers Deed of Trust investments with interest rates above prevailing market rates. Some borrowers are willing to pay higher interest rates for fast loan decisions and fast funding. Typically the borrower has a short term need, and is therefore willing to pay a higher rate.
Approving a Borrower:
Cattlemen's Mortgage originates Deeds of Trust with borrowers who are referred to us from our advertising efforts or by local lenders (such as banks and other mortgage companies) when borrowers do not qualify for conventional loan programs. Each borrower is screened to determine their ability to pay and adequacy of the collateral.
Approving a Property:
Each property is evaluated by a member of our staff. Market value is determined either by comparable sales in the immediate area or by appraisal. Further analysis of the property includes marketability, resale time and acceptable risk relative to area growth, condition and location.
Protecting Your Money and Your Privacy:
When originating a Deed of Trust, a title commitment is obtained and a title insurance policy is purchased in the amount of the Deed of Trust, ensuring that you, the investor, have a good marketable lien on the property.
When purchasing a Deed of Trust your check is made payable to an independent title company. The borrower makes scheduled payments according to the terms of the Promissory Note to an independent servicing agent, who, in turn, sends the payment to you.
Risks
TRUST DEEDS MAY NOT BE SUITABLE FOR ALL INVESTORS. THERE IS A POSSIBILITY OF A LOSS ON INCOME AND/OR A LOSS OF PRINCIPAL IN THE EVENT THAT THE BORROWER DEFAULTS ON THE PROMOSSORY NOTE.
DEFAULT: Under the terms of the promissory note and deed of trust, a default is declared in the event the borrower ceases to make any payment of principal or interest or fails to pay the loan in full on or before the maturity date without a previously negotiated extension.
The defaulted loan may be referred to Investors Trustee Services, Inc., an affiliate of Cattlemen's Mortgage & Investment Corporation for initiation of a trustee's sale. A trustee's sale is the legal process for repossessing a property in the State of Arizona. The property is advertised for sale at a public auction to the highest bidder. A credit bid, which is the amount of the principal balance, late fees, account servicing fees, default interest, foreclosure fees and any legal or other costs to protect the property will be entered on behalf of the beneficiary (investor) of the the note. The trustee's sale can be held no sooner than the 90th day after a public notice is recorded with the Maricopa County Recorder. Bids made by third parties must be paid in cash prior to 5:00 PM the day after the sale.
In the event there are no third party bids, the property will revert to the beneficiary. The beneficiary may endeavor to sell the property or hold it for rental or other purposes. The Real Estate Division of Investors Trustee Services, Inc. will gladly list and market the property for you.
Other Risks
Holding and owning promissory notes secured by real estate is a business of calculated risk. You could lose income if the borrower fails to make monthly payments or you could lose principal if the property cannot be sold for your investment amount. In transactions of the type you are considering here, the risks include, but are not limited to:
Bankruptcy: In most transactions, non-recourse promissory notes are being sold. As such the only recourse a beneficiary has is to the property. The personal guarantee of the principals of the note may not have been given. In the event of insolvency, the makers may reorganize their income and debt under Chapter 13 of the United States Bankruptcy Code. Should the makers seek reorganization, legal council must be retained by the beneficiary to object and file a lift of stay under Section 362.
The estimated cost of lifting the property from bankruptcy may be as much as fifteen thousand ($15,000.00). In the event of bankruptcy, you will be required to pay legal costs and fees.
Fire: Fire and hazard insurance is required on every transaction, excluding raw land, in the amount of the replacement cost of the improvements and structures located on the property. In the event of fire loss, a proof of claim will be filed with the insurance company.
The insurance company may elect to pay the claim to the beneficiary or the insurance company may elect to have the structure(s) damaged by fire or other hazards rebuilt. If the insurance company elects to pay the loan in full, all proceeds will be distributed to the beneficiary.
Title: To ensure that the note being offered has priority over other potential liens, encumbrances or other clouds on title, except real estate property taxes, lenders title insurance is required and purchased from the borrower's proceeds. Title insurance may pay for claims or litigation expenses on behalf of the insured policy holder for matters and/or claims regaqrding title to the property asserted by third parties and/or to correct liens as a result of past misdeeds of the borrower. Lenders title insurance is obtained in the principal amount of the note and deed of trust.
A preliminary title report will be available for your review prior to close of escrow. You are encouraged to read and ask questions about the preliminary title report before you invest money. The preliminary title report discloses any and all liens that may appear in public record, claims on title by third parties or interested parties and the status of real estate taxes or judgments against the borrower. Any matters having a priority greated than the proposed loan may be cleared before close of escrow. Claims of title not recorded in the county where the property is located may also be defended by the title company. Transactions shall not close escrow until such time as Lenders Title Insurance is acquired.
Penalties and Late Fees for Late Payments:
Our Promissory Notes and Deeds of Trust have a penalty for late payments. If the borrower's payment is more than 10 days late, the borrower incurs a late charge, typically at a rate of 25% of the payment. Further, if the borrower fails to make a payment for more than 30 days, the interest rate accelerates to a higher default rate unless prohibited by law.
Investing in Notes and Deeds of Trust is a compliment to most investment portfolios.
• Trust Deed investments can earn higher interest than many other investments.
• Most Deeds of Trust are in first lien positions.
• Most Deeds of Trust have regular monthly payments.
• Each Deed of Trust is secured by real property in Arizona.
• Deeds of Trust are suitable for IRAs and other retirement accounts when you have a qualified custodian. Many private
pensions, family trusts and corporate organizations purchase Deeds of Trust from Cattlemen's Mortgage.
• Each Deed of Trust is title insured.
• All Deeds of Trust are serviced by independent title or escrow companies.
Why a Trust Deed Investment?
Cattlemen's Mortgage offers Deed of Trust investments with interest rates above prevailing market rates. Some borrowers are willing to pay higher interest rates for fast loan decisions and fast funding. Typically the borrower has a short term need, and is therefore willing to pay a higher rate.
Approving a Borrower:
Cattlemen's Mortgage originates Deeds of Trust with borrowers who are referred to us from our advertising efforts or by local lenders (such as banks and other mortgage companies) when borrowers do not qualify for conventional loan programs. Each borrower is screened to determine their ability to pay and adequacy of the collateral.
Approving a Property:
Each property is evaluated by a member of our staff. Market value is determined either by comparable sales in the immediate area or by appraisal. Further analysis of the property includes marketability, resale time and acceptable risk relative to area growth, condition and location.
Protecting Your Money and Your Privacy:
When originating a Deed of Trust, a title commitment is obtained and a title insurance policy is purchased in the amount of the Deed of Trust, ensuring that you, the investor, have a good marketable lien on the property.
When purchasing a Deed of Trust your check is made payable to an independent title company. The borrower makes scheduled payments according to the terms of the Promissory Note to an independent servicing agent, who, in turn, sends the payment to you.
Risks
TRUST DEEDS MAY NOT BE SUITABLE FOR ALL INVESTORS. THERE IS A POSSIBILITY OF A LOSS ON INCOME AND/OR A LOSS OF PRINCIPAL IN THE EVENT THAT THE BORROWER DEFAULTS ON THE PROMOSSORY NOTE.
DEFAULT: Under the terms of the promissory note and deed of trust, a default is declared in the event the borrower ceases to make any payment of principal or interest or fails to pay the loan in full on or before the maturity date without a previously negotiated extension.
The defaulted loan may be referred to Investors Trustee Services, Inc., an affiliate of Cattlemen's Mortgage & Investment Corporation for initiation of a trustee's sale. A trustee's sale is the legal process for repossessing a property in the State of Arizona. The property is advertised for sale at a public auction to the highest bidder. A credit bid, which is the amount of the principal balance, late fees, account servicing fees, default interest, foreclosure fees and any legal or other costs to protect the property will be entered on behalf of the beneficiary (investor) of the the note. The trustee's sale can be held no sooner than the 90th day after a public notice is recorded with the Maricopa County Recorder. Bids made by third parties must be paid in cash prior to 5:00 PM the day after the sale.
In the event there are no third party bids, the property will revert to the beneficiary. The beneficiary may endeavor to sell the property or hold it for rental or other purposes. The Real Estate Division of Investors Trustee Services, Inc. will gladly list and market the property for you.
Other Risks
Holding and owning promissory notes secured by real estate is a business of calculated risk. You could lose income if the borrower fails to make monthly payments or you could lose principal if the property cannot be sold for your investment amount. In transactions of the type you are considering here, the risks include, but are not limited to:
Bankruptcy: In most transactions, non-recourse promissory notes are being sold. As such the only recourse a beneficiary has is to the property. The personal guarantee of the principals of the note may not have been given. In the event of insolvency, the makers may reorganize their income and debt under Chapter 13 of the United States Bankruptcy Code. Should the makers seek reorganization, legal council must be retained by the beneficiary to object and file a lift of stay under Section 362.
The estimated cost of lifting the property from bankruptcy may be as much as fifteen thousand ($15,000.00). In the event of bankruptcy, you will be required to pay legal costs and fees.
Fire: Fire and hazard insurance is required on every transaction, excluding raw land, in the amount of the replacement cost of the improvements and structures located on the property. In the event of fire loss, a proof of claim will be filed with the insurance company.
The insurance company may elect to pay the claim to the beneficiary or the insurance company may elect to have the structure(s) damaged by fire or other hazards rebuilt. If the insurance company elects to pay the loan in full, all proceeds will be distributed to the beneficiary.
Title: To ensure that the note being offered has priority over other potential liens, encumbrances or other clouds on title, except real estate property taxes, lenders title insurance is required and purchased from the borrower's proceeds. Title insurance may pay for claims or litigation expenses on behalf of the insured policy holder for matters and/or claims regaqrding title to the property asserted by third parties and/or to correct liens as a result of past misdeeds of the borrower. Lenders title insurance is obtained in the principal amount of the note and deed of trust.
A preliminary title report will be available for your review prior to close of escrow. You are encouraged to read and ask questions about the preliminary title report before you invest money. The preliminary title report discloses any and all liens that may appear in public record, claims on title by third parties or interested parties and the status of real estate taxes or judgments against the borrower. Any matters having a priority greated than the proposed loan may be cleared before close of escrow. Claims of title not recorded in the county where the property is located may also be defended by the title company. Transactions shall not close escrow until such time as Lenders Title Insurance is acquired.
Penalties and Late Fees for Late Payments:
Our Promissory Notes and Deeds of Trust have a penalty for late payments. If the borrower's payment is more than 10 days late, the borrower incurs a late charge, typically at a rate of 25% of the payment. Further, if the borrower fails to make a payment for more than 30 days, the interest rate accelerates to a higher default rate unless prohibited by law.
Purchasing a Note and Deed of Trust
Why a Trust Deed Investment?
Approving a Borrower
Approving a Property
Protecting Your Money & Your Privacy
Risks
Penalties & Late Fees for Late Payments
Why a Trust Deed Investment?
Approving a Borrower
Approving a Property
Protecting Your Money & Your Privacy
Risks
Penalties & Late Fees for Late Payments
Make Your Money Work for You
Selling a Note and Deed of Trust
"What is the value of my Note?"
Acceptable Notes
Would you like to sell your Note and
Deed of Trust?
Call us at (602) 230-9393 for a quote.
"What is the value of my Note?"
Acceptable Notes
Would you like to sell your Note and
Deed of Trust?
Call us at (602) 230-9393 for a quote.
Arizona Mortgage Broker License MB-0010078 NMLS-164721
Trust Deed Investments
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© 2003-2011 Cattlemen's Mortgage & Investment Corp.
MB-0010078 NMLS-164721
4008 N. 15th Avenue, Phoenix, Arizona 85015
(602) 230-9393
MB-0010078 NMLS-164721
4008 N. 15th Avenue, Phoenix, Arizona 85015
(602) 230-9393
Selling a Note and Deed of Trust
"What is the value of my Note?"
The value of a Note is highly dependent upon the following factors:
• Amount of cash flow (payments)
• Frequency of payments
• Remaining term of the Note
• Loan to Value
• Lien position
Because each Note is a unique transaction, it is important for us to read the original terms of the Note you wish to sell and to complete a property profile.
Acceptable Notes
We buy Notes secured by real property in Arizona. Properties include single family residential, churches, commercial properties, apartments and condominiums.
• The Note should be seasoned for a minimum of six (6) months, exceptions are made.
• Each Note must have regular monthly, quarterly, or annual payments.
• The maximum Loan to Value may not exceed 60% of the market value or the last sales price of the property.
• We do not accept Notes secured by anything other than real property. For example we do not accept loans secured by
business property or equipment.
We are direct buyers of Notes and Deeds of Trust. Want to sell your Deed of Trust and Promissory Note? Need a fast and fair quote? Please give us a call (602) 230-9393. We're happy to talk with you! We pay all escrow fees and transfer costs. In most cases you will receive your money in 10 days or less.
"What is the value of my Note?"
The value of a Note is highly dependent upon the following factors:
• Amount of cash flow (payments)
• Frequency of payments
• Remaining term of the Note
• Loan to Value
• Lien position
Because each Note is a unique transaction, it is important for us to read the original terms of the Note you wish to sell and to complete a property profile.
Acceptable Notes
We buy Notes secured by real property in Arizona. Properties include single family residential, churches, commercial properties, apartments and condominiums.
• The Note should be seasoned for a minimum of six (6) months, exceptions are made.
• Each Note must have regular monthly, quarterly, or annual payments.
• The maximum Loan to Value may not exceed 60% of the market value or the last sales price of the property.
• We do not accept Notes secured by anything other than real property. For example we do not accept loans secured by
business property or equipment.
We are direct buyers of Notes and Deeds of Trust. Want to sell your Deed of Trust and Promissory Note? Need a fast and fair quote? Please give us a call (602) 230-9393. We're happy to talk with you! We pay all escrow fees and transfer costs. In most cases you will receive your money in 10 days or less.
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For more information on becoming an investor call (602) 230-9393
Arizona Mortgage Broker License MB 0010078, NMLS 164721
Arizona Mortgage Broker License MB 0010078, NMLS 164721
