BRENT WALL

Glendale, CA (USA)
Role(s):
Founder/Owner/Principal

Mortgage Clearing House

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Location: Glendale
Industry: Investing
Year Founded: 2010
Number Employees: 1-10 people
Business Stage: Creation/Idea
Entity Type: Not Incorporated
Description: Mortgage Clearing House Business Plan M.C.H.’s ultimate goal is to be the new way of transferring bad loans from financial institutions dealing in mortgages to a place where they can also receive a clean healthy equitable loan simply by doing business through us. Another objective for M.C.H. is to help homeowners in default so they want loans where the homeowner still lives at the property and hasn’t yet been completely foreclosed on. The clearinghouse is allowed 30 days to do there job of qualifying homeowner as a tenant paying rent on the new loan for the clearinghouse for a pre-determined amount of time, with the option of repurchasing the home at FMV in the future from M.C.H. in 2 or 3 years out. Other qualifications like, paying rent on time are part of that criteria. If the existing homeowner cannot qualify for that particular loan modification the clearinghouse can see if other properties in the system are available for rent or purchase. This is also where an investor may purchase a loan with tenant making payments, or purchase loan plus a percentage then sell to anyone of there choosing. The concept of Mortgage Clearing House is simple, allow banks to get rid of toxic loans in return for a good loan with equity of equal value. For instance if Bank-A hands in 10 million dollars worth of bad loans and Bank-B also hands in 10 million in bad loans. The clearing house has already pre-negotiated what discount they will purchase all loans from banks, and every quarter or so the banks and clearinghouse can re-negotiate what that discount is pending strength of economy etc. If 15% below market value has been determined then all banks sending in bad loans know all banks loans are being discounted the same. The variable that changes is the FMV of each loan, that is determined by an in-house BPO and the banks BPO, things like repairs or damage to home, demographics etc will determine value of home prior to the 15% discount. Once value has been determined Clearinghouse purchases property, then does one of two things. First they treat the owner of the home now as a tenant, and ask for all pertinent information to qualify them as a possible tenant at the same property. The advantages of this are clear, the homeowner doesn’t want to move, or have bad credit, by buying the bad loan from the banks the clearinghouse then has two choices, qualify the previous owner as a tenant, or sell the discounted loan to an investor. The clearinghouse still has to have a lending institute fund the loan after it’s been modified/reduced, so the clearinghouse exchanges the bad loans from each bank with another opposing banks loans for good ones, after they have been discounted. So ideally the clearinghouse wants to distribute the good loans at the same ratio as the bad loans to opposing banks or financial institutes. Part of the collaboration of the banks and clearinghouse is the interest rate at which the Clearinghouse purchases loans as well as the balance of ratio of bad loans to good loans. Some of the advantages of all this being done in a short window between the Clearinghouse and Banks is listed below Mortgage Clearing House Advantages for Banks - Remove bad loans off books - Acquire good loans with equity from company that has collateral - Acquire more money from government with leverage of new loan - Fulfill mortgage modifications - Redistribute money helps stimulate economy - No need to auction homes - Have opportunity to resolve MERS and or Robo-signing issue while mortgage is in M.C.H.’s name without lawsuits from homeowners and larger financial institutes, or political entities. Advantages for Investors - Purchase loans with equity - No more “vesting” or “seasoning” period - Pre-qualified tenants paying for mortgage via rent - Central location to buy or sell properties already cleared of liens, judgments, second mortgages etc - Loss mitigation already done - Short sale short cut for Real estate agents and investors Advantages for Homeowners - Save credit status - may not have to move out of home - Shorten time between default and loan modification - Opportunity to repurchase same home in future at FMV with Better, healthier loan conditions. - Access to other properties at clearinghouse they may be able to afford