FAQQ: How is my investment secured?
A: Each of our investments is secured by a Deed of Trust. The Deed of Trust is recorded as a lien on the property in the County is which the property is located.
Q: What is a Deed of Trust?
A: The Deed of Trust is the mortgage document. In some States, such as Washington, a Deed of Trust is used instead of a Mortgage. With a Deed of Trust, the borrower effectively gives the lender a Deed to the property. The lender can only use or sell the property if the borrower does not meet the terms of the loan.
Q: Are these investments in 1st lien position on the property?
A: All of our loans are in 1st lien position. Each of our investors has the opportunity to personally choose which loans in which they would like to invest.
Q: How long in the investment?
A: Typically, our loans mature in two to ten years. During this time, the borrower is obligated to make a monthly payment which is in turn dispersed to the investor providing the borrower makes the payment.
Q: What if I want to liquidate the investment before the maturity date?
A: We can offer assistance in this case but a discount will be charged to do this.
Q: Can I investment my retirement account (IRA, pension fund, etc)?
A: Yes. Many of our investors invest qualified retirement accounts with us. We can help answer specific questions relating to helping you get started and provide you with companies that deal with these types of accounts.
Q: What are the dollar amounts of the investments? What is the minimum amount?
A: Our loan sizes range from $20,000 to $1,000,000.00. The minimum investment amount is 10% of the loan amount. We work with each of our investors to find the size range appropriate for your needs.
Q: Why would someone pay 9%-13% for a loan?
A: We provide a unique investment opportunity by specializing in funding loans that conventional FDIC insured lending institutions are unable to fund for a variety of reasons. Our focused and streamlined due diligence process allows us to handle time sensitive transactions, in which the borrower does not have the time required to fulfill the requirements of a conventional lending institution. We also specialize in unique properties that may prevent a borrower from obtaining traditional financing. Other times, we may provide funding such as a bridge loan.
Q: What are the risks associated with this type of investment?
A: There are risks associated with any type of investment. The primary risk is that the borrower does not pay back the obligation, which could ultimately result in a foreclosure by which the investor could potentially end up owning the property. . By maintaining loan-to-value (LTV) ratios under 65%, we attempt to reduce the investor’s risk exposure in the event of a foreclosure. CLS Mortgage, Inc. works closely with the investor until each loan is paid off assisting in collection efforts and advice in the foreclosure process to ensure the investment is protected.
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