Before A Case Is Available:
In a typical secondary market structured settlement transaction, a seller approaches an attorney, a factoring company, or other entity with a specific payment stream to sell. The originator agrees on a discounted price for the payments and commences the work necessary to transfer the payments to their own account or to a new owner.
At this point, these diverse sources of origination offer their payment streams for sale. If it is a good payment, from a good company, DCF Exchange, our wholesale vendor, will buy it and provide the name of its business trust and address of a payment servicer which is applied to the various transfer documents.
MARKETING A CASE:
We market cases with two different statuses- “In Stock” and “Coming Soon”. In Stock can close right away, and Coming Soon may be 30 to 60 days.
CASE STATUS IN THE INVENTORY:
Coming soon simply means the case can be reserved, but is not guaranteed to close. Buyers seeking certainty and speed of execution should consider instead our “In Stock” cases.
“In Stock” means that the case has passed all due diligence and is ready for immediate funding. The case is available for immediate re-sale as it is in inventory.
Because this is a fast moving marketplace, our buyers pick cases nearly always in the “Coming Soon” stage while they are being processed and before the court date. These buyers are aware that occasionally cases (about 1 in 15) do not close, and that generally, the purchase process takes from 30 to 60 days, with most of the delays due to the court process.
Reservation And Contracts:
After you select a case to buy, our unique and revised procedure requests minimal documentation from you. We have eliminated the hassles of the transaction. Our newly revised Purchase Offer tells us how you want your checks to be made out and where mailed to, such as a Trust, an LLC, Joint Tenants, etc, and describes the purchase terms and conditions.
See the Sample Documents page for samples of all the docs you may find in a case.
With every case, the DCF Exchange, LLC, our wholesale vendor, puts its capital on the line before any purchaser reserves the case, and has a deeply vested interest in making sure the payment stream is transferred fully and completely.
Only after we know it’s done, and done right, is it made available to the Purchaser to fund and close. The review process involves the following steps:
- Thorough review of the court order and supporting court documents, including:
- Proof of service on all interested parties
- Final signed and file stamped court order
- Review of all of the disclosures to the original annuitant and interested parties required by state law
- Verification with the insurance carrier that the assigned payments exist and are available to be transferred
- Confirmation of a clean credit check, lien search, and docket search on the original annuitant to verify that the structured settlement payments can be transferred free and clear.
- Confirmation by the insurance carrier via acknowledgement or stipulation agreement of the court ordered transfer of the payments.
- Examination of the transfer and assignment documents to ensure that all right, title, and interest in the cash flows are conveyed absolutely and irrevocably to the purchaser.
- Preparation of Absolute Assignment of Cash Flows
We typically fund and close “In Stock” cases in just 1-3 days. They are “Off The Shelf” and ready to close.
With “Coming Soon” cases, we will notify you when the case is court approved just prior to the court date as closing will be just a few days to a week later.
Once we have reviewed all the documentation of a case and it has passed legal review, a closing book is produced showing the complete chain of title transferring the payments. AFTER the closing book is delivered, client funds are required.
After legal review of the case, a Closing Book will be prepared and sent electronically to you. Funding is required within two days of receipt of this Closing Book and the amortization schedule showing the final purchase price will be in this Closing Book together with wiring instructions.