Mortgage Pools FAQ

Q: How does a Mortgage Pool work?

A: Investors purchase shares of the mortgage Pool. The mortgage pool then lends money to borrowers for the purchase or refinance of properties. Borrowers then make monthly payments. Normally once a month the Mortgage Pool distributes the income (dividends) received, to its Members.

Q: What is the minimum investment amount?

A: $5,000. While most invest large amounts when they join the mortgage pool, the minimum investment amount is kept small to allow investors to test the pool with a small initial investment.

Q: What return can I anticipate on my investment?

A: The fund yielded approximately 8% in 2007. The yield will vary from year to year depending upon the market interest rates and overall success of the fund.

Q: Can I reinvest my monthly dividends in the Pool?

A: Yes, there are three investment options. Members have the option to:

A: Receive monthly cash distributions in the form of monthly income.
B: Reinvest their distributions by purchasing additional shares of the fund.
C: Split the investment into two accounts. One account receiving monthly cash distributions and the other account purchasing additional shares.

Q: Is there a fee for withdraw?

A: No, there are no penalty fees for withdraw. However, the right to sell shares is limited.

Q: What information is provided for tax report?

A: Income information is reported on a Schedule K-1, which is sent to investors each year.

Q: Do you charge a commission when I invest?

A: No, 100% of your investment is deposited into the fund.

Q: How often is the Mortgage Pool audited?

A: An independent CPA auditors' report is conducted yearly and submitted to The California Department of Corporations when the pool renews its yearly permit. Additionally, Vanguard Loan Servicing is audited quarterly and yearly by an independent CPA, and is subject to audit by the Department of Real Estate.

Q: What types of properties are considered by the fund?

A: The fund lends money for rehab and construction of single family residential properties. The fund also lends money for the purchase or refinance of apartments, commercial properties and lots.

Q: Are there Second or Third Trust Deeds in the Mortgage Pool?

A: No, 100% of the loans in the pool are first trust deeds. Junior trust deeds generally are of a higher risk than first trust deeds, and require additional reserves, in the event of a default.  This is especially true in a declining market.

Q: What is our policy regarding potential borrowers who are experiencing financial difficulty?

A: We avoid borrowers who are in foreclosure, bankruptcy and/or have delinquent mortgage payments. Additionally, borrowers must demonstrate the capacity to make payments.

Q: Could you tell me about the Mortgage Pool’s manager?

A: Vanguard Mortgage Investment, LLC is managed by Vanguard Funding Corp. Ernest Dan Allee is President and Founder. He holds a B.A. in Business Administration and is a licensed California Real Estate Broker with over 30 years of experience in the real estate business.

Q: Are there suitability standards

A: Yes, shares are offered exclusively to qualified investors who are California residents and who meet certain minimum standards of income and/or net worth:

A: Only residents of California
B: Those who have a net worth of at least $250,000 [excluding home, furnishings and automobiles].
C: Those who have a net worth of at least $65,000 [excluding home, furnishings and automobiles] and an annual gross income of at least $65,000.

Q: How do I invest?

A: The offering is made through the Offering Circular. After reading the Circular, we welcome the opportunity to answer any questions you may have. When ready to invest, complete the Subscription Agreement and return it with a check, made payable to Vanguard Mortgage Investment, LLC.