First Position Commercial Mortgage FAQ's

  1. What is a First Position Commercial Mortgage?

    A First Position Commercial Mortgage (FPCM) is a simple, safer, and more secured opportunity for individuals to achieve their financial objectives. This private third-party loan to Woodbridge provides higher returns with shorter terms secured by commercial real estate. Private lenders select a commercial mortgage in Woodbridge’s inventory to serve as collateral for their private loan. They are recorded on title and acquire a first lien position on the mortgage. And every lender is paid monthly interest from the moment they loan to Woodbridge at a fixed annual 5% interest with a return of principal at the end of the one-year term.

  2. Why are they called First Position Commercial Mortgages?

    The phrase “First Position Commercial Mortgage” describes the collateral pledged by Woodbridge as security for the loan you are making. As a private lender, you select a particular commercial mortgage from Woodbridge’s inventory to serve as collateral for your loan to Woodbridge. A First Position Commercial Mortgage loan is not a mortgage investment pool and it is not a direct investment in real estate.

  3. What is a first position in a commercial mortgage?

    If you have a first position, that means you have priority over any other liens or claims against the encumbered collateral in the event of default. It puts you in control.

  4. With interest rates so low, why do borrowers come to Woodbridge?

    In today’s lending environment, real estate developers and commercial borrowers are seeking out alternative financing that they can receive in 2 to 3 weeks. We offer short-term bridge loans based on the value of their property. So our mortgages are secured by the high value commercial assets.

  5. What types of property are used as collateral in these transactions?

    Generally, Woodbridge secures these mortgages with commercial real estate, such as multi-unit apartments, office buildings, retail centers or mixed-use developments; though we will sometimes accept as collateral non-owner occupied, single-family homes that are held as investment properties and owned by a corporation or limited liability company.

  6. What are some of the terms of the mortgage given to the borrower?

    Our commercial mortgage lending policies dictate that we lend for a maximum loan term of two years and up to only 70 percent of the value of the real estate. That means the properties that secure the mortgages are worth considerably more than the loans themselves at closing.

  7. What type of due diligence does Woodbridge perform on these properties?

    Woodbridge performs a rigorous title search to ensure first lien position and thoroughly evaluates each property by conducting a comprehensive appraisal to confirm market value.

  8. Are the properties insured?

    Woodbridge obtains insurance coverage on the encumbered property. This mitigates the risk of loss to the property’s value due to damage, destruction, natural disasters (earthquake, flood, tornado, hurricane, mudslide), and the like.

  9. What is a lender’s collateral?

    With the collateral mortgage loan-to-value ratios of 60% or less, the property’s net resale value is your collateral.

  10.   What is the paperwork required to get started?

    When you lend on a First Position Commercial Mortgage, you enter into a Promissory Note and Loan Agreement that set the terms under which Woodbridge repays you.

  11.   How am I better protected from downside risk?

    Your loan is ultimately secured by a mortgage lien encumbering a hard asset collateral of significant value – the property itself. And we’re so confident that Woodbridge commits its own funds in a second lien position behind your first position. That way you can have peace of mind with Woodbridge obligated to make the monthly interest payments and return the principal at the end of the term.

  12.   How does Woodbridge establish that the property has no additional liens?

    As a condition to closing its mortgage loan Woodbridge pays for a title search to ensure that the property will be free of liens prior or superior to the mortgage.

  13.   How do I verify that I hold a first lien position in the mortgage?

    Upon request, Woodbridge will provide you with a copy of the title policy which indicates there are no other liens or claims above mortgage. No exceptions.

  14.   Will my name appear on the land records of the property?

    Yes. Woodbridge executes and delivers the collateral assignment documents in your name and files the documentation on the land records in the relevant jurisdiction.

  15.   Does the borrower make payments to me?

    No. Woodbridge is contractually obligated to make your monthly interest payments and return the principal at the end of the term, regardless of the status of the underlying loan, even where the borrower may be a Woodbridge affiliate.*

  16.   What happens if the borrower does not make payments or defaults?

    First Position Commercial Mortgages are private transactions that are separate and distinct from the pledged collateral. If a commercial borrower does not make its payments to Woodbridge or defaults, Woodbridge remains obligated to pay your monthly interest payments and return your principal at the end of the term according to the terms of your Promissory Note and Loan Agreement, even where the borrower may be a Woodbridge affiliate.*

  17.   How am I taxed on a First Position Commercial Mortgage?

    You should consult a tax advisor or accountant for tax-related questions specific to your situation; however, the IRS typically taxes interest received as ordinary income. Woodbridge will provide a Form 1099 for all lenders.

  18.   What types of funds can I use for lending?

    Lenders can use qualified or non-qualified funds, an IRA, Trust, LLC, Pension, 401k or lend in their own name.

  19.   How do I get started?

    If you’d like to get started lending on one of our available First Position Commercial Mortgages:

    • Call a Woodbridge Consultant at 866-941-8631, or
    • Go to www.WoodbridgeWealth.com.
          1) Click on “Available Offers” and view inventory
          2) Click the RESERVE button next to any of the available properties in the “Offers Ready for Closing” or “Offers Preparing for Closing” sections. Each are available for purchase.





  20. *California, Colorado and New York only. Woodbridge affiliates include owners of real estate purchased for reconstruction or renovation by Woodbridge, primarily high-end residential properties in and around Beverly Hills, CA and Aspen, CO. Click here for additional information.