Document Checklist
Once we've negotiated a price for your cash flow, we'll need to collect all the supporting doucmentation in order to move forward. Below is the list of documents we'll need for each type of note, settlement or annuity:
Mortgage Notes
- Promissory Note: This is the actual document that we will be purchasing. This document states the terms of the note, including interest rate, length of payments, and monthly payment.
- The Deed of Trust, Trust Deed, Contract or Land Contract: This is a recorded document that secures the property as collateral for the loan.
- Title Insurance Policy: An insurance policy issued by a Title Company that guarantees that a property is free of any liens.
- Settlement Statement: This document is issued at closing and shows the down payment amount on the property as well as taxes paid, etc.
- Proof of Insurance: This is usually in the form of a Declaration Page. This shows the dates of coverage on the property and the covered amount.
- Verification of outstanding balance: This is the current payoff balance on the note. We usually request an amortization schedule.
- The payer's name, address, and social security number: We check the credit history on all note payers.
- Seller's Social Security number: This is for tax-reporting purposes only.
- Proof of payment history: This can be in the form of cancelled checks, check stubs, accountant's ledger book, etc. The purpose of this is to show punctuality of the payments.
- Copies of underlying notes and balances (if applicable): We will need to pay off this note if there is one. We need the balance with a payoff date and who to pay off.
- Signed Mortgage Purchase Agreement: This agreement must be signed by the note seller before we will begin processing the transaction. We will be ordering a title and appraisal and we want to make sure the note seller is obligated by a binding contract to sell his/her mortgage note to us.
Structured Settlements and Annuities
- Release and Settlement Agreement: This is a document that is signed by all parties involved in the settlement and by the judge. This document releases all future claims against the liable party and states the amount the plaintiff will receive.
- Order Approving Minor's Claim: This is a court document similar to the Release Agreement and is issued whenever a minor is involved in a lawsuit. This is only required if the annuitant was a minor when the case was settled.
- Annuity Policy or Letter of Benefits: An Annuity Policy comes from the insurance company that is paying the settlement. It lists the dates and amounts of all payments that are due the annuitant as well as stating who actually owns the policy. A Letter of Benefits is an abbreviated version of the Annuity Policy (we need one or the other).
- Photocopies of annuitant's Social Security Card and Driver's License: We request these to verify that we are dealing with the actual Annuitant.
- Photocopy of annuitant's most recent annuity check or annuity check stub: This is to confirm the payment amount (this proof is not always available).
- A copy of the annuitant's most recent tax return: This is to check if the annuitant has other income. We will not purchase the entire monthly annuity income from an individual who is no longer able to work. We usually choose to purchase a portion of their payment. We want to make sure that a person will not incur a hardship by selling their future payments.
- A copy of a Divorce Decree if the annuitant has been divorced since receiving the annuity: We want to make sure that no one else has rights to these payments
- If the annuitant has declared bankruptcy at anytime, we will need a copy of the bankruptcy paperwork or discharge papers: Sometimes we can purchase an annuitant's settlement who is in bankruptcy by paying off all of their creditors.
- If the annuitant is receiving this settlement as the result of an inheritance, then we will need a copy of the probated Will that gave him or her the settlement.
- If an annuitant has recently re-married since receiving the settlement, then we will need to see a copy of him or her marriage license.
Lottery Winnings
- Lottery Application: located in the back of this manual and online.
- Award Letter: This comes from the state or agency that awarded the lottery prize. It states when the payments are paid.
- W2G or 1099 Form: This is issued every year by the agency paying the winnings. This is for tax-reporting purposes for the winner.
- Photocopies of winner's Social Security Card and Drivers License.
- Photocopy of winner's most recent award check or direct deposit.
- A copy of the winner's most recent tax return.
- If applicable, a copy of the winner's divorce decree only if he or she has been divorced since the award date.
- Bankruptcy paperwork, if applicable.
- A copy of the Will if the lottery winner received this as a result of an inheritance.
- If the lottery winner has remarried since winning the lottery, then we will need a copy of his/her marriage license.