California Ethical Real Estate Funding, LLC (CEREF) - Hope for Homeowners

CEREF is a private real estate investment company specializing in restructuring non-performing whole mortgages and acquiring residential real estate.  Our management team has developed comprehensive work-out strategies and a unique investment platform from which investors can cost-effectively purchase residential real estate on a large scale, receive an attractive return on their investment, and help home owners maintain ownership and avoid the expense, inconvenience, and embarrassment of foreclosure or relocation.

Unlike other firms operating in the distressed mortgage market, we do not purchase pools of loans on an all or none basis in auctions or competitively bid situations.  Instead, we have executed exclusive partnerships with large financial institutions that enable us to purchase non-performing whole loans and REO properties from financial institutions and investors that have originated or previously purchased pools of these assets.  The asset resolution strategies we employ provide our Partners and homeowners acceptable and economically viable alternatives to traditional work-out scenarios.

Asset Resolution Strategies

We utilize a wide variety of both proprietary and traditional approaches to the resolution of the non-performing loans we purchase.  These strategies include “scratch and dent approaches” such as loan modification or cash for keys or Deed-in-Lieu transactions, or novel approaches such as our Installment Land Sale Contract (ILSC).

The linchpin of our work-out strategies is our hands-on approach to loan modification, credit evaluation, and financial remediation.  These processes incorporate comprehensive underwriting and financial remediation methodology roughly consistent with that of FHA and post-closing financial remediation and counseling based on Fannie Mae’s counseling product The Home Counselor.

To learn more about our asset resolution strategies, please visit our page dedicated to that topic. It includes a diagram of the CEREF Loss Mitigation Solution.

Market Opportunity

Our opportunity is immediate and immense; in 2005 and 2006 approximately 60% of California home purchases were financed through the utilization of Adjustable Rate Mortgages – ARM’s or “Toxic Mortgages” as they are known by the popular media. Re-financings utilizing ARM’s accounted for approximately 30% of all transactions. Industry analysts estimate $2 trillion of ARM’s will re-set in 2009, 2010, and 2011 resulting in significantly higher payments for borrowers and ultimately dramatically higher loan default rates. Current mortgage default rates in California are at historical highs and rapidly accelerating.

Investment Strategy

Our investment strategy emphasizes the preservation of capital, coupled with providing capital gains from asset disposition.  Investors participating in our Funds have an opportunity to participate in real estate-secured investments and at the same time assist homeowners achieve their financial goals.

We generate profit through monthly interest payments, loan modifications and re-financings, sale of individual unoccupied or REO properties, and capital gains from property appreciation upon the sale of the underlying properties.

To learn more about CEREF, click here to fill out an interest form.