24025 Park Sorrento #150
Calabasas, Ca 91302
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   FAQ


1. What is a Trust Deed?
2. How does it work?
3. What should an Investor expect as a return?
4. What are the benefits of Trust Deed Investing?
5. How do yields compare to other investments?
6. Should I invest all my money into one trust deed or invest in a few different Trust Deeds?
7. Why would a borrower pay higher rates and fees for a loan when bank loans are less costly?
8. What is the difference between a First and Second Trust Deed?
9. What should I look for when evaluating property for a Trust Deed Investment?
10. What Borrower considerations should you be concerned about when making your decision?
11. What should an Investor expect in their investment package from a mortgage broker to help them make an    intelligent investment decision?
12. How is the loan servicing handled?
13. How do I get started in Trust Deed investing?

1. What is a Trust Deed?
    A Trust Deed is a document recorded with a county recorder's office creating a secured lien on real property which provides collateral for lenders.
2. How does it work?

    A borrower either owns or is buying real estate and needs a loan. The borrower executes a Promissory Note wherein the borrower promises to repay the lender/investor. A Trust Deed is recorded and creates the secured interest attached to the borrower's real property. If the borrower does not pay as promised, the lender/Investor can foreclose on the real property for recovery of their invested capital.

3. What should an Investor expect as a return?

    A Trust Deed investment typically earns a 10% to 13% annualized yield and receives monthly interest payments.

4. What are the benefits of Trust Deed Investing?
    Investors receive monthly interest payments on their invested capital. Yields are generally higher compared to other fixed income securities. Real estate collateral is often viewed as more tangible than stocks and equity investments. The servicing entity distributes monthly payments and handles many of the problems that may arise, through the payoff of the loan.

5. How do yields compare to other investments?
    The most secure is a government insured CD which currently yields approximately 2% to 3%. Government backed Ginny Mae mortgage pools yield approximately 6% to 6.5%. Corporate bonds which are essentially, unsecured loan obligations to large corporations range from 4% to 7%. Junk bonds are lesser quality corporate bonds that currently yield from 8% to 9%. Trust deed mortgage investments currently yield from 10% to 13% annually, with monthly interest payments.
6. Should I invest all my money into one trust deed or invest in a few different Trust Deeds?
    It is advisable to invest a divided portion of your money into a number of different Trust Deeds with varying property types, property locations, loan-to-value ratios, and maturity dates. If one borrower does not pay on time the affect on your cash flow will be less, thus reducing your overall risk.
7. Why would a borrower pay higher rates and fees for a loan when bank loans are less costly?
  1. Quick turnaround where urgency is a main factor.
  2. Unable to show or prove income.
  3. Minor or major credit problems.
  4. To pay judgments and liens such as Federal or State taxes.
  5. Property may be non-conforming .

8. What is the difference between a First and Second Trust Deed?
    The difference between a First and Second Trust Deed is the priority of the lien based on the date the Trust Deed is recorded. The earlier recording date would have priority (i.e. first position). If you have a Second Trust Deed and the Borrower fails to pay the First, you would be responsible to make the First Trust Deed payments or suffer the risk of being foreclosed out and losing your invested capital.
9. What should I look for when evaluating property for a Trust Deed Investment?
    There are many types of real property suitable for Trust Deed investment. As a rule of thumb it is helpful if you have some knowledge of the market in which the property lies. Additionally the investor should imagine owning the property in the event of foreclosure. Is it a property you wouldn't mind owning? If not, it is likely not an investment you should make.

10. What Borrower considerations should you be concerned about when making your decision?
    In general collateral and ability to repay the loan (exit strategy) is the primary concern when underwriting a loan. Credit history is reviewed and considered as well. When the property is the borrower's primary residence there are a number of State and Federal Regulations that must be met such as income to debt ratios, APR ceiling, and confirmation of certain disclosed information. Any loan file should include an appraisal report, a credit report, 1003 loan application, preliminary title report, and any supporting documentation .

11. What should an Investor expect in their investment package from a mortgage broker to help       them make an intelligent investment decision?
    In order for you to make an informed decision, you should require the following in your package:
  1. Loan Summary of the Trust Deed Investment
  2. Loan Application of the borrower
  3. Credit Report of the borrower
  4. Appraisal from a certified appraiser with original photographs and area location map
  5. Borrower Agreement to Procure Lender/Escrow Instructions, copy of Promissory Note and Deed of Trust
  6. If your loan is a Second Lien, a copy of the First position Promissory Note and Deed of Trust.
  7. Current Preliminary Title Report issued by the title insurer.

12. How is the loan servicing handled?
    Platinum Loan Servicing acts as our in house loan servicing agent for all loans funded by our Investors. Just as any loan servicing company, Platinum collects borrower payments, sends out late notices when necessary, monitors senior liens, property taxes and insurance. In the event of a default, initiates a foreclosure. We also monitor the status of property taxes and property insurance and issue demands for payoff statements and reconveyances when loans are paid in full. We have over 18 years of experience in servicing loans which includes expertise in: slow paying accounts, bankruptcies and foreclosures. We communicate regularly to assure that our investors are aware of the status of any loans that may not be paying as agreed and that we are carrying out our delegated responsibilities as requested.

13. How do I get started in Trust Deed investing?
    When you are ready to invest call Marquee Funding Group and ask for an investment counselor. You will be asked a series of questions regarding the loan amounts you are comfortable with, types of properties. Lien positions, etc. this will allow us to create a profile of your investment goals so we can identify the right Trust Deed opportunities for you.


 BROKERS


Marquee Funding Group, Inc. specializes in the Private Placement of all types of Real Estate Loans both in the consumer...

         


 
 INVESTORS


Marque Funding Group is a full service mortgage banker specializing in matching qualified borrowers...

         


 

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