Loan Processing and Funding Procedures Transaction Flow

1. BUYER IS APPROVED.
Investor qualifies client according to Underwriting Guidelines and Investor Terms Agreements.

2. DOCUMENTS ARE ORDERED.
Now due diligence on property begins. Investor contacts notario, trustee, appraiser, and title insurance company, the key centers for determining value of property and that property is free and clear to be properly conveyed.

a) The Notario (a special state registered and approved Mexican lawyer) orders Escritura Antecedente, which determines that seller owns it and establishes the legal chain of previous owners. He acquires the documents necessary to complete the transaction such as the tax appraisal, certificate of no liens, certificate of no tax liens, and Letter of Instructions from seller, which cancels any existing trust that might be holding title to the property currently. The notario assures that the seller can properly convey the property and that there are no outstanding liabilities in Mexico that jeopardize our lien position.

b) The title company begins preparing the title opinion.

c) The appraiser prepares property appraisal to US standards and if necessary, orders a second appraisal from our pre-approved local appraiser.

d) Trustee assigns an ID number to the Trust and orders Foreign Ministry Permit.

3. INVESTOR COLLECTS ALL DOCUMENTS REGARDING MEXICO TRANSACTION TO PREPARE CLOSING PACKAGE FOR BORROWER.
Once investor has appraisals, title commitment from title insurance company, tax assessment appraisal and all lien documents from notario assuring the property is free and clear, we prepare the closing package to be executed by the US borrower. That package includes all the loan documents in accordance with US and Mexican law: Promissory Note, Powers of Attorney, Compliance Agreement, TIL, URLA, Letter of Instructions to Trustee, Residency Agreement, etc. The packet includes a Settlement Statement (similar to HUD form) for all fees borrower must submit with signed documents, including the down payment.

4. BORROWER SIGNS AND NOTARIZES ALL DOCUMENTS AND RETURNS THEM TO INVESTOR FOR PRE-CLOSING REVIEW AND UNDERWRITING.
Investor verifies that all documents are properly executed, signed and initialed where necessary, notarized, etc. These documents are then apostilled, a step necessary by Mexican law to assure that the notary used is registered properly at the Secretary of State’s office in the borrower’s home state (i.e. CA, NY, etc.). This is a standard procedure and in many states there is a service located in the capital city to execute this. Cost is $20-50.

5. SIGNED, NOTARIZED, APOSTILLED DOCUMENT PACKAGE IS FORWARDED TO INVESTOR CUSTODIAN FOR REVIEW AND APPROVAL FOR FUNDING.

6. CLOSING PACKAGE IS FORWARDED TO NOTARIO.
Once investor has determined that all documents including promissory note, etc. are in order, and custodian has approved package for funding, all documents are sent to the notario. The notario now prepares for the Mexican closing. Once he reviews the signed documents and determines all appropriate documents are complete, he fills out the trust document and sends to trustee for signing and return, schedules the date of the closing, and notifies all parties (Buyer and Seller, Real Estate Agent, Investor, Trustee). He files the Preventive Notice, an important document that records that the property is under transaction. This freezes the property from liens for 30 days.

7. BORROWER WIRES ALL CLOSING FEES AND DOWNPAYMENT TO U.S. BASED ESCROW COMPANY.
Borrower wires to Escrow Company Borrower’s portion of funding plus all fees to be distributed to seller (or seller’s trust), tax authorities, investor, trustee, notario, etc.

8. CLOSING IS HELD AT NOTARIO’S OFFICE.
Borrower’s representative, seller’s representative, trustee representative, and investor representative attend closing, unless other arrangements are made.

9. NOTARIO RECORDS TRANSACTION, NOTIFIES ESCROW COMPANY, AND PROVIDES ALL DOCUMENTARY PROOF OF TRANSACTION TO ESCROW COMPANY AND INVESTOR.

10. LOAN IS FUNDED
Investor is notified to provide funds to escrow.

11. ESCROW COMPANY DISPERSES.
Once escrow receives all necessary documents, most importantly the Preventive Notice, the Certificate of No Liens, the Notario’s Letter of Transaction (affirming that transaction is complete in accordance with law), and a copy of the deed recordation, all signed appropriately and stamped by notario, funds are dispersed according to the Escrow Agreement executed by buyer and seller.

12. EXECUTED CLOSING PACKAGE SENT TO INVESTOR AND CUSTODIAN.