Federal Home Loans Corporation

Services

Federal Home Loans Corporation (FHLC) offers a comprehensive nationwide Trust Deed Loan Servicing solution. We service individual trust deed/mortgage loans of any size for brokers, lenders, institutions and private investors. Additionally, our loan servicing program allows us to service fractionalized loans with ease. All computations are computer-driven, and we strive for the highest degree of accuracy.

Primary Servicing (FHLC is the loan servicer)

Sub-servicing (broker earns a servicing fee)

Private Label Servicing

Interim Servicing

Residential Loans

Commercial Real Estate

Manufactured Homes

Land

Any debt requiring payments over time

Programs

Account and payment processing is set up as soon as a complete loan servicing package is received. The account and payment processing of the program includes:

Borrower Welcome Letter

Borrower Monthly Statement (with payment coupon)

Lender Welcome Letter

Lender Monthly Statement

Same Day Payment Posting

Tri-monthly Disbursement of Funds (after clearing)

Electronic Deposit of Funds (ACH) into investor’s account

Payoff Demands

Rush Demands

Disbursements and Draws

Releases and Reconveyances

IRS 1098 and 1099-INT Reporting

Online Secure Account Access for brokers and investors, with downloadable reports

Basic Collection

Basic Collection begins when the borrower payment is ten days past due. This includes:

Late Notice sent at ten days delinquent

Foreclosure Notice sent at 31 days delinquent

Act as Intermediary between Investor and Borrower

Default Servicing

FHLC strives to avoid foreclosure whenever possible. However, when necessary, we handle the Default Servicing on all loans serviced, which includes:

Declaration of Compliance

Specific thirty-day Notice of Intent letters

Legal services coordination including bankruptcy relief and eviction

REO management and property sale services available

Info

Trust Deed Investments have long been the best way to have your money earn a higher return, coupled with great security. Participating first trust deeds drive yields while preserving capital. This is how we manage our portfolio:

1st Trust Deeds are preferable

Loan to values that make sense

Always obtain title insurance

Real equity

Solid exit strategies

Trust Deed Investment Best Practices

At FHLC we believe in taking a proactive approach when it comes to discussing risk. By partnering with our clients in an investment strategy based on expertise and mutual trust, we can mitigate risk and achieve our mutual goals. Trust Deeds are one of the safest high-yield investments available if you follow a few basic rules:

Don’t invest in trust deeds if you need your money at a time certain. Even the best of borrowers can occasionally be slow or late with payments.

Don’t invest in trust deeds if you are not willing to acquire the property for your own portfolio

or cannot accept that you may have to sell in the event you acquire the property in a foreclosure. Additionally, consider the possible expenses for upkeep and maintenance of the property if you acquire it in via foreclosure.

Confirm the appropriate documents contain your vesting and percentage of ownership interest

including the deed of trust, the note, the fire insurance policy and the title policy.

While an appraisal was once THE major factor in determining market value

due to the current declining real estate market the purchase price becomes the most important element in identifying value. However, appraisals are very useful and provide a plethora of information. An appraisal includes pictures, the size of the lot, the type of improvements, zoning, the best use of the property, age and condition of the property, and ample amounts of other useful information. It will also tell you what the appraiser thinks the property is worth based on comparable properties, the replacement value, and the income approach.

Be aware you may have to come up with revenue to keep your investment from deteriorating.

For example, an REO property may require cash calls to pay expenses (e.g. property taxes) for an interim period until you can realize the outcome of your investment.

Adjust with the market! The market is still in a state of flux.

With our many contacts in the field we stay ahead of the curve on these changes. The commercial property and high-end home markets are being watched closely at this time.

Let’s recap

Having provided all the pitfalls and negatives, you should not lose your money in trust deeds. Let’s recap:

Keep your money in the bank if you want it to be available at any time.

You may end up owning the property.

You may end up owning the property. Ensure the paperwork is in your name.

Understand how value is determined.

Be aware of the occasional requirement for the temporary investment of additional funds.

Adjust with the market.

Essential Elements

The Seven Essential Elements of Trust Deed Investing (from the California Department of Real Estate):

Knowledge, experience and integrity of the Mortgage Loan Broker through whom the transaction may be arranged.

Market value and equity in the property and the security for your loan.

Borrower's financial standing and credit-worthiness.

Escrow process involving the funding of the loan or the purchase of the promissory note.

Documents and instruments describing, evidencing, and securing the loan or purchase of the promissory note.

Loan servicing provisions, authority and compensation.

Recovering your investment when the borrower fails to pay.

Our Management Team

Gina Salas

Gina Salas has been President and Broker of Federal Home Loans since 1993, and has been with the company for 27 years. She obtained her real estate license in 1986, and her broker's license in 1993. Gina also holds a juris doctorate degree.

Don Salas

Don Salas has been with Federal Home Loans since the early nineties and has held a real estate license for 35 years. He is active in the private money lending industry with a focus in underwriting and experience in loan origination, escrow, funding, and land entitlements.

Johanna Rivera

Johanna Rivera has been with Federal Home Loans for over 14 years and has held a real estate license for over 11 years. She has experience in loan origination, underwriting, funding, escrow, and loan servicing. Johanna is a Notary Public, and is bilingual.

Available Trust Deed Investments

There is a late charge of 10% of the payment (after 10 days). There is no prepayment penalty on this loan. This loan contains a balloon payment.

Mountain View Townhouse

SUBJECT PROPERTY: 427 Mountain Laurel Court, Mountain View, CA 3-bed/2.5-bath Townhouse, 1418 sq ft with fireplace and 2-car attached garage. APPRAISED VALUE: $850,000 (Dec 2013); LOAN AMOUNT: $406,000; POSITION: 1st; INTEREST: 9.25%; TERM: 36 mos; LTV: 48%. Specifics - Our borrower and her husband purchased the subject property in 2005 for $728,000. They have since divorced, and we are paying the existing mortgage and removing his name from title as ordered by the court. There is no cash-out; this is only a refinance. The borrower's mid-FICO is 695, and the property is currently rented for $3400 per mo.

Previously Funded Investments

There is a late charge of 10% of the payment (after 10 days). There is no prepayment penalty on this loan. This loan contains a balloon payment.

3+ Acres in San Diego

SUBJECT PROPERTY: San Miguel Road, Bonita, CA 91902 3.14 AC Zoned R-1 (Single-Family Residential); APN 585-120-08-00. APPRAISED VALUE: $130,000; PURCHASE PRICE: $125,000; LOAN AMOUNT: $62,500; POSITION: 1st; INTEREST: 10.5%; TERM: 48 mos; LTV: 50%. Specifics - Our borrower is purchasing this property as an investment, with plans to build one or two residences on the property in the future. Her husband is a local real estate broker and restaurant owner. The subject property has paved access through a gated entry and is near a San Diego Gas and Electric substation.

3.82 AC Lot in San Diego County (Valley Center)

LOAN: #7589; SUBJECT PROPERTY: Calle de Vista, Valley Center, CA 92082 3.82 AC residential vacant lot; San Diego County APN 189-220-2400. APPRAISED VALUE: $135,000; PURCHASE PRICE: $100,000; LOAN AMOUNT: $29,000; POSITION: 1st; INTEREST: 10.5% (Interest Only); TERM: 12 mos; LTV: 21% of appraised value/29% of purchase price. Specifics - Our borrower is a builder and the owner of a home construction firm; we have worked with him before. He is currently in escrow to purchase this lot for $100,000 and will begin plans to commence construction of a single-family-residence. FHLC will be working with the borrower on construction financing, and the loan on the lot will be paid in full once plans have been approved by the county and construction financing has been secured.

21 Acres in Murrieta, CA

LOAN: #7546; SUBJECT PROPERTY: 21 Acres of unimproved/vacant land in Murrieta, CA APN 932-290-011-9. APPRAISED VALUE: $180,000; LOAN AMOUNT: $50,000; POSITION: 1st; INTEREST: 10.75%; TERM: 36 mos; LTV: 28%. Specifics - Our borrowers have owned the subject property free and clear since 2000. Loan proceeds will be used to pay delinquent property taxes as well as provide cash-out.

44 Acres in Imperial Valley, CA

LOAN: #7622; SUBJECT PROPERTY: 4 West US Hwy 98, Calexico, CA 92231 43.98 Acres of combined industrial/agricultural land in the Imperial Valley, CA; Highly desirable site w/prime freeway-proximity location. APPRAISED VALUE: $850,000 (July 2013); LOAN AMOUNT: $425,500; POSITION: 1st; INTEREST: 10.75%; TERM: 48 mos; LTV: 50%. Specifics - Our borrowers have owned this property for many years, and are refinancing to pay off their matured 1st trust deed with FHLC as well as pay delinquent property taxes. The subject property is currently listed for sale at $950,000, but the borrower prefers to keep the property due to the possibility of a new US Customs Border location being proposed adjacent to the subject property.

Antioch Rental SFR

SUBJECT PROPERTY: 4-bed/2-bath, 1272 sq ft and 2-car garage and deck; built in 1978. APPRAISED VALUE: $165,000; PURCHASE PRICE: $150,000; LOAN AMOUNT: $105,000; POSITION: 1st; INTEREST: 11%; LTV : 70% of Appraised Value / 64% of Purchase Price. Specifics - Our borrower is putting 30% down plus paying all closing costs. After closing they will be marketing the property for rent at $1700 per mo.

Big Bear Lake Construction Loan

SUBJECT PROPERTY: 40377 Lakeview Drive, Big Bear Lake, CA 92315; 4-bed/3-1/2 bath SFR Spec Home; 3210 sq ft w/decking and 3-car garage on a 18,300 sq ft lot. AS-COMPLETED APPRAISED VALUE: $675,000; LOAN AMOUNT: $438,000; POSITION: 1st; INTEREST: 10.25%; TERM: 12 mos; LTV: 65%. Specifics - Our co-borrowers own the subject site free and clear and have paid for the architectural plans which have been city-approved; permits are ready to be pulled. The property offers partial lake views. Funds will be disbursed via fund-control through a neutral third party (BuildZig), with regular inspections.

Chino Hills Lots

LOAN: #7684; SUBJECT PROPERTY: Three contiguous lots in Chino Hills, CA 91709; APNs 1000-073-30/31/32; total sq footage 13,143. COMBINED APPRAISED VALUE: $182,000; LOAN AMOUNT: $91,000; POSITION: 1st; INTEREST: 11.25%; TERM: 24 mos; LTV: 50%. Specifics - The borrower intends to combine these three lots into a single parcel to allow for ground up construction of a single SFR. Our borrower's primary residence is on an adjacent lot on Observation Lane.

Commercial Construction in Redlands, CA

LOAN: #7559K; SUBJECT PROPERTY: 31587 Alta Vista Drive, Redlands, CA 92374 Existing SFR to be converted into a 2973 sq ft Child Care Facility; 2973 sq ft on a 26,633 sq ft lot. Property is zoned residential or commercial. APPRAISED VALUE: $430,000 (as-completed); LOAN AMOUNT: $250,000; POSITION: 1st; INTEREST: 11%; TERM: 36 mos; LTV: 58%. Specifics - Our borrowers purchased the subject property in 2009 for $189,000.00, and the property is owned free and clear. They have approved plans to convert the property into an owner-operated child care facility, and are requesting a construction loan in the amount of $250,000. They have already paid for the complete plans, city permits, and all financing costs upfront and are ready to begin construction. They currently own and operate a child care center in the area.

Commercial Construction in Rialto, CA

APPRAISED VALUE: $620,000 As If Completed Value (Nov 27, 2011); LOAN AMOUNT: $304,000 - This loan will be incrementally funded; POSITION: 1st; INTEREST: 11.5%; LTV : 49%. Specifics - Our borrowers purchased the subject lot in 2007 for $130,000.00, and own the property free and clear. They have approved plans for a 4-unit commercial/retail building, and have already paid for architectural plans, soil plans and soil report, grading plans, land survey and land development plans, as well as the appraisal for the completed project. The borrowers are now ready to commence construction. A cost breakdown, site pictures, and a copy of the plans can be provided upon request. This construction loan will be incrementally funded; our initial funding request is for $100,000.

Commercial Property in San Diego Area

SUBJECT PROPERTY: 2672 Ridgeway Drive and 2626 Granger Ave, National City, CA 91950. Two Adjacent Commercial Properties, Zoned RU (Retail, Warehouse, Urban Residential and Commercial uses allowed). Three legal parcels totaling 20,909 sq ft (approx .48 AC); APNs 564-051-09-00/10 and 564-051-11-00. APPRAISED VALUE: $750,000; LOAN AMOUNT: $430,000; POSITION: 1st; INTEREST: 10.25%; TERM: 36 mos; LTV: 58%. Specifics - The subject properties are an older 2-story brick masonry commercial building and a separate single-story auxiliary building; both were built in the 1948 time frame. Our borrowers own and operate the on-site tortilla factory, and are in the process of opening a produce-retail store at the same location. They also lease the adjacent property for $1500 per mo. The borrowers are refinancing in order to obtain additional funds to complete minor renovations and finalize the grocery-retail store. They are experienced business owners of 20 years, and partners in another produce-retail business in El Cajon, CA. The property was purchased in May 2013 for $620k, and the owners have been conducting repairs and renovations since that time. We will pay off the two existing loans on the property, and are encumbering, via a UCC-1, all of the equipment and machinery (a copy of the UCC-1, as well as pictures of the corresponding equipment, can be provided).

Estate-Sized Rental SFR in Hemet, CA

LOAN: #7676; SUBJECT PROPERTY: 30115 Kiowa Circle, Hemet, CA 92543 5-bed/3-1/2 bath SFR w/pool; 4919 sq ft on 2.5 acres. APPRAISED VALUE: $575,000.00 PURCHASE PRICE: $575,000; LOAN AMOUNT: $403,000; POSITION: 1st; INTEREST: 10.75%; TERM: 36 mos; LTV: 70%. Specifics - Our borrowers are existing FHLC clients with an excellent payment history. They filed for BK in 2012 to reorganize their business assets and have paid all creditors through the BK. Throughout that time they never missed a payment on their existing FHLC obligations. We have both trustee and title approval for the borrowers to conduct the purchase. They are putting 30% down and paying all closing costs. The home was built in 2008; the borrowers will be performing some finishing touches before marketing it for rent.

Estate-Sized SFR in Rio Linda, CA

LOAN: #7595; SUBJECT PROPERTY: 5930 W. 6th St, Rio Linda, CA 95673 7,736 sq ft SFR (built in 2008) with a 6-car garage on a 3-acre lot APN #214-0181-005. APPRAISED VALUE: $780,000; LOAN AMOUNT: $471,250; POSITION: 1st; INTEREST: 11%; TERM: 48 mos; LTV: 61%. Specifics - Our borrowers are refinancing this rental/investment property and have already deposited over $46k into escrow. Mid FICO score is 676, and the property is leased for $3500 per mo.

Executive SFR with Golfcourse Views

SUBJECT PROPERTY: 17766 Buckthorn Ave, Hesperia, CA 91776 4-bed/3-bath SFR; 3727 sq ft w/two 2-car garages and sound studio, on nearly 1/2 AC lot. APPRAISED VALUE: $350,000; PURCHASE PRICE: $350,000; LOAN AMOUNT: $230,000; POSITION: 1st; INTEREST: 9.25%; TERM: 36 mos; LTV: 66%. Specifics - The subject property overlooks a golf course and has picturesque mountain and valley views. Our borrower has a mid FICO of 767, and is purchasing the property as an investment/rental.

Fully Amortized 1st TD - French Camp SFR

SUBJECT PROPERTY: 285 E. Seventh St, French Camp, CA 95231 3-bed/1-bath SFR; 1122 sq ft w/a 2-car attached garage on a 6000 sq ft lot. APPRAISED VALUE: $85,000; LOAN AMOUNT: $54,000; POSITION: 1st; INTEREST: 10%; TERM: 72 mos (fully amortized); LTV: 64%. Specifics - Our borrowers are existing clients with an excellent payment history; they are refinancing this investment property since the loan is reaching its maturation date. The property was originally purchased as an REO in 2010 for $61,500, and is currently rented for $850 per mo. This loan is fully amortized; at the end of the 72-month term the balance owed will be zero and the loan will be paid in full.

Fully Amortized 1st TD - Stockton SFR

LOAN: #7564; SUBJECT PROPERTY: 2603 N. F Street, Stockton, CA 95205 2-bed/1-bath SFR; 1096 sq ft on a 7841 sq ft lot. APPRAISED VALUE: $65,000; LOAN AMOUNT: $45,000; POSITION: 1st; INTEREST: 11%; TERM: 60 mos (fully amortized); LTV: 69%. Specifics - Our borrowers (a married couple) are refinancing their matured partially-amortized loan into this new, fully amortized loan. At the end of the loan term the loan will be paid in full, with no additional or balloon payment required. The borrowers own several investment properties in the Stockton area; this property is rented for $950 per mo.