HOW DOES THE PRINCIPAL REDUCTION PROGRAM WORK?

• Through the Principal Reduction Program your current negative equity on your mortgage is eliminated through our bulk notes buying program. How is that possible? It is made possible through the cooperative efforts of private investors equity fund who negotiated and purchased non-performing notes from your lender.
• Your note is grouped with other notes from your lender. These grouped notes are negotiated to a purchase price at a deep discount from the current market value. Once negotiated these loans are cash purchased by the private equity fund from your lender.
• Once purchased the homeowner in turn gets a new mortgage balance which is permanently reduced to 90% of the current market value eliminating your negative equity and giving you an instant 10% equity position.

• Since notes are grouped together with both performing notes (homeowner is not behind on payments) and non-performing notes (homeowner is behind or not making payments) it's and all or nothing offer to the lender. We do not allow the lender to "cherry-pick" from the group of notes.

WHY YOUR LENDER WOULD SELL YOUR NOTE AT SUCH A DEEP DISCOUNT?

• Most homeowners today are considered to be non-performing meaning they are either behind in payments, not making payments or are already in the foreclosure process. Lenders also know that upside down homeowners have a high probability of defaulting and could potentially become a non-performing borrower.
• These non-performing notes can put a strain on the banks reserve requirements that are set by the Federal Reserve Board. Banks are in the business to lend, not managing real estate. Since The Federal Reserve Board sets a regulation of the minimum cash reserves each bank must hold, by removing these assets, they are in a better lending position. The negotiated deal the bank gets with the private equity fund is an all cash deal so the banks can lend immediately using the money just gained.
• It will cost a lender much less to liquidate the bulk notes at a discount now then it is to foreclose or short sell each property individually. The lender is willing to take the large cash infusion and clean its books of these potentially toxic assets.

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