What happens when you do decide to buy a case? This article describes the DCF Income Payments purchase process in detail.
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 “In Pipeline”. In Stock can close right away, and cases marked as In Pipeline may be 30 to 60 days. Cases marked as “In Review” are in final legal review and will be in stock in a few days.
Case Status in the Inventory
All currently available payments are listed in our web-based inventory system, and display whether they’re In Pipeline, In Review, or In Stock.
“In Pipeline” 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. DCF Income Payments marked as “In Pipeline” are in the court approval process. While you can reserve an “In Pipeline” case, the transaction may take 30 days or more to close. If the case isn’t approved in court, the transaction is canceled. There’s no cost to reserve a case and no cost to you if the case is not approved.
“In Review” cases marked are approved in court and in the final stages of our legal review process. “In Review” cases are typically ready to close in 5-10 days.
“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. DCF Income Payments marked as “In Stock” are ready for immediate sale. These cases have been thoroughly reviewed, and the court transfer and approval are complete.
“48-Hour Hold” cases means they has been held temporarily for another party. Feel free to contact us or your advisor to place a backup hold.
“Reserved” cases have been reserved by another party, but the transaction hasn’t closed yet. We do accept backup offers, so it’s smart to keep an eye on the “Reserved” list.
Because this is a fast-moving marketplace, our buyers pick cases nearly always in the “In Pipeline” 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, and with most of the delays due to the court process.
Reservation and Contracts
After you select a case to buy from our DCF Income Payments Inventory, our unique and revised procedure requests minimal documentation from you. We have eliminated the hassles of the transaction. Our newly revised annuity 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.
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:
A thorough review of the court order and supporting court documents, including:
2) Proof of service on all interested parties,
3) 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 acknowledgment 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 “In Pipeline ” 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 annuity purchase price will be in this Closing Book together with wiring instructions.
Reach out to us if you’d like to:
- Schedule a 1-on-1 video call to discuss your specific needs and situation
- Ask questions about products, carriers, or DCF Income Payments
- Discuss how a DCF Income Payments and newly-issued annuities may (or may not) fit into your portfolio
Nathaniel M. Pulsifer, Owner of DCF Annuities
(800) 246-1932 | [email protected] | Linkedin