American Homeowner Preservation (also known as AHP) is an online real estate crowdfunding platform which purchases pools of nonperforming loans from banks and other lenders and then offers borrowers who want to stay in their homes

debt restructuring Debt restructuring is a process that allows a private or public company or a sovereign entity facing cash flow problems and financial distress to reduce and renegotiate its delinquent debts to improve or restore liquidity so that it can continue ...

options with reduced payments and discounted principal balances. If homes are vacant or families want to move, AHP offers deficiency waivers and incentive payments to cooperate with

short sales In finance, being short in an asset means investing in such a way that the investor will profit if the value of the asset falls. This is the opposite of a more conventional " long" position, where the investor will profit if the value of t ...

in order to put the homes back into service. Founded in 2008 as a 501c nonprofit in

Cincinnati Cincinnati ( ) is a city in the U.S. state of Ohio and the county seat of Hamilton County. Settled in 1788, the city is located at the northern side of the confluence of the Licking and Ohio rivers, the latter of which marks the state line wit ...

, Ohio, AHP pioneered the short sale

leaseback Leaseback, short for "sale-and-leaseback", is a financial transaction in which one sells an asset and leases it back for the long term; therefore, one continues to be able to use the asset but no longer owns it. The transaction is generally done f ...

as a

foreclosure Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. Formally, a mortg ...

prevention operation to assist struggling

homeowners Home insurance, also commonly called homeowner's insurance (often abbreviated in the US real estate industry as HOI), is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insura ...

. Faced with resistance from many

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

s which insisted that families vacate their homes in order to have their short sales approved, AHP changed their strategy in early 2011 and now operates as a for-profit headquartered in

Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = Country , subdivision_name ...

. In October 2013, AHP became an online real estate crowdfunding platform offering investment opportunities to accredited investors, and in June 2016 opened to non-accredited investors as well under Title IV of the

JOBS Act The Jumpstart Our Business Startups Act, or JOBS Act, is a law intended to encourage funding of small businesses in the United States by easing many of the country's securities regulations. It passed with bipartisan support, and was signed into ...

(called Regulation A+).

Inception

American Homeowner Preservation, Inc. (AHP) was established in October 2007 as a

non-profit organization A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...

focused on helping homeowners at risk of foreclosure stay in their homes. In May 2008, an office was opened in

. In August 2008, AHP received their

501(c)(3) A 501(c)(3) organization is a United States corporation, trust, unincorporated association or other type of organization exempt from federal income tax under section 501(c)(3) of Title 26 of the United States Code. It is one of the 29 types of 50 ...

designation as a nonprofit from the

Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...

. Envisioning that AHP would be financed with tax exempt bonds, AHP sought the assistance of the Summit County Port Authority. In September 2008, SCP
voted unanimously
to induce up to 12.5 million in bonds to fund AHP. AHP proceeded to market their program in the greater Akron region and—by year-end—close to 300 families had signed purchase contracts to sell their homes to AHP. However, citing concerns about the Board and backers of AHP along with a challenged bond market the bond resolution was rescinded in February 2009. AHP transitioned into a for-profit American Homeowner Preservation, LLC in July 2009, seeking to match investors with homeowners at risk of losing their homes.

Transition To For-Profit

After the bond resolution was rejected by the Summit County Port Authority, American Homeowner Preservation sought new ways to fund its endeavors.

Jorge Newbery Jorge Alejandro Newbery Malagarie (27 May 1875 – 1 March 1914) was an Argentine aviator, civil servant, engineer and scientist. Early and personal life His father, Ralph Lamartine Newbery Purcell (born 1848) was a dentist who emigrated from ...

transitioned from a Consultant to American Homeowner Preservation Inc. to Director of American Homeowner Preservation LLC, a for-profit which took over the nonprofit AHP's mission. Instead of using bond funding to purchase

homeowner Owner-occupancy or home-ownership is a form of housing tenure in which a person, called the owner-occupier, owner-occupant, or home owner, owns the home in which they live. The home can be a house, such as a single-family house, an apartment, c ...

s homes, the program started matching private investors to purchase the homes on short sale. In October 2013 Newbery added online crowdfunding to AHP's investment model to simplify the investment process and reach more investors.

Funding

Originally modeled to be financed with tax-exempt

municipal bonds A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, ...

, American Homeowner Preservation's efforts are now primarily supported by both

accredited investors An accredited or sophisticated investor is an investor with a special status under financial regulation laws. The definition of an accredited investor (if any), and the consequences of being classified as such, vary between countries. Generally, acc ...

(including

high-net-worth individual High-net-worth individual (HNWI) is a term used by some segments of the financial services industry to designate persons whose investible wealth (assets such as stocks and bonds) exceeds a given amount. Typically, these individuals are defined ...

s and

institutional investors An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked co ...

), as well as non-accredited investors through a Regulation A+ offering. In October 2013 AHP transitioned to an equity

crowdfunding Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and alternative finance. In 2015, over was raised worldwide by crow ...

model after Title II of the

lifted a ban preventing private startups and small businesses from publicly soliciting funding. Revenue is then generated in the forms of rents and mortgage payments from the people whose homes AHP services.

AHP Formulas for Borrower Solutions

AHP uses the current

value Value or values may refer to: Ethics and social * Value (ethics) wherein said concept may be construed as treating actions themselves as abstract objects, associating value to them ** Values (Western philosophy) expands the notion of value beyo ...

of the home as the basis for determining the modified

payments A payment is the voluntary tender of money or its equivalent or of things of value by one party (such as a person or company) to another in exchange for goods, or services provided by them, or to fulfill a legal obligation. The party making the p ...

, principal discounts and

incentive In general, incentives are anything that persuade a person to alter their behaviour. It is emphasised that incentives matter by the basic law of economists and the laws of behaviour, which state that higher incentives amount to greater levels of ...

payments offered to borrowers. As a result of this formulaic approach, borrowers are not required to furnish significant documents in order to obtain mortgage modifications. This is uncommon in the mortgage industry, in which many lenders require extensive documentation.Sandstrom, Erik. "What Documentation Is Needed For A Mortgage Refinance?" LoanSafeorg. LoanSafe.org, n.d. Web. 13 Jan. 2017.

References

External links

*{{Official website, https://ahpfund.com Business and finance professional associations Financial services companies established in 2008 Real estate companies established in 2008 Real estate services companies of the United States