Attention ALL Lenders and Financial Planners!

Real Estate Agent with Sherman Smith & Associates 00682119

The Define Benefit Plan Dilemma

For those of you who know what a Define Benefit Plan is I need your help.

I have a client who wants to take $500,000 from his Define Benefit plan and buy 2 properties.  He will spend $500,000 for each property and put 50% down in cash on each. A Define Benefit Plan will allow encumbered real estate in the plan as long as the purchase note and trust deed is a non-recourse note. The problem I am having is I can not find a lender who will loan on a Define Benefit Plan. I have found several who will loan on an IRA but not a Define Benefit Plan (DBP).

Here is the criteria:

  • No paperwork (none! Nada! Any!) can be in my clients name
  • The vesting and purchase agreement will be: "The Trust Company, Custodian for, John & Mary Doe Define Benefit Plan, Account #4567890"
  • All paperwork will be signed by the Custodian
  • No money from the client can be deposited into escrow (not even the deposit)
  • The deposit must come from the DBP
  • All loan documents must be signed by the Custodian
  • All future bills and payments will be made by the Custodian
  • After the purchase there must be 20% of the purchase price left in the DBP

As you can see this is a very good loan but I can not find anyone who will make the loan. I am seeking your help for a lender who is making this type of loan.

Sherman Smith

Sherman Smith & Associates

(714) 544-5445



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Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker-Owner,CRS,CDPE,GRI,SRES, Brea,CA, Orange Co

Hi Sherman,

Hope you get some answers on this one! Good seeing you today.

Apr 08, 2008 03:30 PM #1
Larry Bettag
Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL
Vice-President of National Production
Thornburg gets aggressive with the out of the box things.  With their recent woes, though, I'm not sure.  Check them out though.
Apr 08, 2008 03:35 PM #2
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