We’re all on the Same Side
The traditional real estate model puts the bank and the borrower on the opposite side of the table from each other. The two sides have different objectives. It’s like two opposing teams taking the field together. They greet each other with a handshake, both sides go about their business professionally and courteously, but there’s a ball at center field between them.
The borrower just wants to roll the dice 360 straight times without any hiccups so that he doesn’t lose his 30 year investment. His objective is to repay the loan note on time, without any late penalties, default interest rates, foreclosure proceedings, and/or bankruptcy.
Judging the bank by their lending terms, though they very well may smile at you and greet you by name when you walk in the door, it is evident that the bank finds itself in its best position when the borrower finds himself in no man’s land, which is the area where the payments are between current and foreclosure. When the borrower is in default, the bank earns not only the interest rate on the note, but also late charges, and quite often, a default rate interest surcharge.
It makes no difference to the bank whether or not the borrower pays these fees out his own pocket. The late charges and default rate interest are simply added to the balance that the borrower owes, and when the borrower quits paying, the bank takes the fees back out as profit on their books at the sale of the house.
What if the borrower was able to be on the same team as the lender? Wouldn’t that be a great idea? What if the terms of the loan agreement were fashioned in such a way that what is good for the borrower is good for the lender, and vice-versa?
This is exactly the scenario that we’ve built at Prime-Ex Perpetual. The Prime-Ex Perpetual real estate ecosystem guarantees that our company and the home buyer sit on the same side of the table.
With our guaranteed buyback program, Prime-Ex Perpetual has a stake in the land, the house, the buyer financing, and the home maintenance at all times. We will be responsible to build our own quality homes, and it is not in our best interest to cut corners. We will maintain our homes to the best condition possible, because it is in our best interest as well as the best interest of the home buyer.
In return for equity participation in the property Prime-Ex Perpetual eliminates the risk of time for the borrower. We replace the risk that time holds over a borrower’s head and introduces a better, common-sense approach to parting as friends if things don’t go as planned. This is represents a better way forward for the borrower while Prime-Ex Perpetual
Prime-Ex Perpetual switches away from an income verification system to a system with demonstrable proven reserves and plans the exist strategy up front as part of the agreement. This means that the borrower and the Prime-Ex Perpetual deal with each other on the same side of the table, each side incentivized to preserve the growing equity in the real estate.
We cut out all of the negative incentives that banks use to make borrowers perform: late charges… default… default interest rates… prepayment penalties… negative credit scores… foreclosure bankruptcy… these area all thrown into the trash bin of history.
Instead, we replace these negative incentives with very real positive incentives for the buyer to perform… the buyer knows his maximum risk exposure up front… no tricks… a guaranteed buyback… an easy way out if the borrower can’t pay.
We believe that the Prime-Ex Perpetual model will ultimately produce returns beneficial to all participants in our ecosystem while building into a position to become an extremely disruptive force for the good of all people who wish to purchase and finance real estate.
Would the world look better with less foreclosures? Would the world look better with less bankruptcies? Would people’s lives be less stressful and more fulfilling if they knew they had a way out of their financial burden if push comes to shove in a way that didn’t affect their credit score?
Prime-Ex Perpetual… a revolution in real estate building, selling, and financing… a better way forward where #EverybodyWins. Help us impact the world for the better by advancing a no-stick, all-carrot lending philosophy towards residential lending that lifts people up instead of kicking them down. Join the revolution today. Let’s change the world for the better!