Compared with virtually any other “non-traditional” financing program, the PACTrust affords a seller maximum protection and safety, along with:

1. A legitimate “take over” of the current loan’s payments, without loan assumption or violation of the lender’s alienation protection and “due-on-sale” provisions
2. A better ‘selling price’ (in view of the benefits derived by the offeror, a PACTrust Mutually Agreed Value (“MAV”) is typically higher than a standard “purchase offer”)
3. A faster sale and shorter escrow
4. Avoidance of the IRS” imposition of tax on debt-relief (with reference to an over-encumbered property) when foreclosure or “short-sale” are considered options. The PACTrust seller needn’t destroy his/her credit and walk away with nothing to show for all those years of expense and hard work
5. Freedom from no longer affordable or practical loan payments, insurance costs, and maintenance – in that all such costs are [generally] paid by the resident beneficiary
6. Enhanced income and profit potential compared with what renting or leasing could provide (i.e., by elimination of one’s negative cash flow, management costs, maintenance and vacancy risk; a PACTrust often increases gross rental income by 150 percent… or could even double it in many cases)
7. Protection from possible injurious actions of the “other party,” (e.g., a resident’s non-payment; disrepair, disregard or damage to the property). In comparison with any other seller-assisted financing arrangement, a PACTrust shields the property from an errant resident’s tax-liens, law suits, bankruptcies, judgement-leins or marital disputes
8. Ease of collection of the resident’s payments; disbursements to creditors; late notices; and any necessary admonitions, evictions or legal processes, because these functions need not ever be handled by the seller
9. Ease of eviction and avoidance of the anguish and expense of judicial foreclosure, ejectment and quiet-title actions to regain possession following a buyer’s default. A prominent advantage of the PACTrust over other types of seller-assisted financing is that it allows for a standard eviction and Unlawful Detainer process rather than foreclosure
10. Participation in the profit potential upon a future sale, while someone else pays the bills. A PACTrust seller could opt to retain, along with any beginning equity, a percentage of the property’s future profit potential. The justification for such participation might simply be one’s having obtained the original loan, having made the original down payment; and/or remaining at risk [re: the continuing mortgage responsibility] on behalf of the buyer.

PACTrust Overview

PACTrust Buyer Benefits

Licensed Real Estate Broker with the Calif. Dept. of Real Estate