A Simple Synopsis...

 

Prospective investors often ask about the underwriting and approval process that our firm uses to screen its loan applicants. For this reason we thought it would be helpful if we cover some of the basics here on our website. This is by no means a complete picture of every transaction we encounter, but we hope it answers some of your questions.

 

Phase 1: The Introduction

 

A prospective borrower (who wishes to use his/her real property as loan collateral), or a mortgage broker acting on their behalf, will contact us regarding a loan request. A licensed representative of Liberty First Financial will then conduct an in-depth discussion of the loan scenario with the borrower, or the borrowers' broker. During this first detail conversation we attempt to get a basic understanding of the value of the property, the borrower’s personal financial situation, and the “game plan” for the use of the funds and their repayment.

 

Phase 2: Due Diligence

 

If we believe there is merit in moving forward with the process; we then conduct our own investigation of the property and the borrower. Loan applications, income documentation, property appraisals/broker price opinions are requested. Escrow and title orders are also opened at this time. Finally, a physical inspection of the property is performed by a representative of the firm.

 

Phase 3: Paperwork & Funding

 

If approval is granted and all parties are satisfied with the terms of the loan; Liberty First Financial will prepare the loan documents, disclosure statements and escrow instructions. Our firm will then ship the package to the escrow/title company. Once the documents are executed, Liberty First then funds their capital to the transaction. Recording of the Trust Deed follows within a day, and issuance of the policy of title insurance occurs at this time as well.

 

Phase 4: The Investors

 

When all previous phases are completed; investors are invited to buy portions in the newly recorded transaction. A detailed disclosure shows relevant information about the borrower and the securing real estate. If the investor wishes to participate in the transaction, instructions and service agreements are executed and the investor starts earning interest right away.

 

Additional Topics of Interest:

 

Discover more about Liberty First Financial and its 4 decades of success by reading: Time Tested Investment Principals At Work.

 

Trust Deed investing is not for anyone. Reading: State of California Requirements For Becoming A Trust Deed Investor will give you an idea if you qualify for the opportunities offered through Trust Deed investing.

 

The Trust Deed investment market is changing, surprisingly for the better. Go to: The Advantage of Private Trust Deed Investing and get a greater understanding of a new type of borrower that is making investment in Trust Deed a whole lot safer.