Nationwide, there are millions of individuals and families who have full employment and are fully capable of responsible homeownership, but who have been eliminated from the realty market as victims of the recent "sub-prime" meltdown". These same families, as well as first time homebuyers, can now be afforded the opportunity to occupy, maintain and eventually own a home that is otherwise vacant, deteriorating and posing myriad social, health related and economic problems. Municipalities, mortgage underwriters and lenders can utilize S.C.O.R.E. as a means for establishing new streams of revenue from dormant properties while concurrently eliminating the substantial costs that vacant REO properties bring in the form of maintenance and property taxes. Additionally, as S.C.O.R.E. is implemented, neighborhoods will realize the benefits of the mitigation of downward pressure that unoccupied properties exert on neighboring property prices and the reduction of crime and health hazards that these vacant properties represent to local communities.

The following provides an explanation of each of the steps to be taken as a vacant property is leased and then sold through the utilization of a S.C.O.R.E. agreement, with explanation of the terms and provisions for the Property Owner (municipality, underwriter or lender), the marketing Realtor, and the Tenant/Buyer. For demonstration purposes, a sample agreement between the Marketing Realtor and the Property Owner, and a sample agreement between the Tennant/Buyer and Property Owner have also been included.

1. Municipal Owned or Lender Owned vacant property (REO) is marketed by the listing Realtor as a "rent to own" property. Property value is determined by an independently conducted C.M.A. (Comparative Market Analysis) that is completed by a licensed Realtor. Marketing highlights include a down payment of only 2% of the C.M.A. total for occupancy, a minimum required credit score of 620, a lease payment that has been determined by amortization of the C.M.A. amount at a 5% interest rate for 30 years (360 months), and up to 30 months of occupancy by the occupant (Tenant/Buyer) before such time as purchase of the property must be completed.



2. The Property Owner (Municipality or Lender) enters into a S.C.O.R.E. property lease agreement with the Tenant/Buyer, with the listing Realtor as servicer of the lease agreement. The Tenant/Buyer shall remain in occupancy for the duration of the lease term and shall have the option to purchase the property at a future date (within 30 months of the date of the lease agreement). A property purchase contract is also signed by the Tenant/Buyer at the lease signing. An amount equal to 2% of C.M.A. shall be collected by the Realtor from the Tenant/Buyer at the lease signing as an "Occupancy Deposit". This deposit shall be payable to the Realtor, one half of which shall be credited to the Realtor at the Lease signing as a "Lease Commission" and the other one half of the "Occupancy Deposit" shall be held by Realtor in a "receivership account" that is formed specifically for the administration of S.C.O.R.E. agreements, as a property damage security deposit (security deposit shall not be less than $500.00).



3. As the option to purchase the property is exercised by the Tenant/Buyer, the property damage security deposit shall be charged to the Tenant/Buyer and credited to the Property Owner at the property sale closing transaction, itemized as an "Occupancy Charge", as applicable. Qualification for the Tenant/Buyer occupancy is contingent upon verification of income by the Property Owner using standard verification/mortgage pre-qualification methods (post "sub-prime crisis" standards). Former owner(s)/mortgagor(s) of the property shall have the right of first refusal to enter into a S.C.O.R.E. lease/purchase agreement for a specific property. The Tenant/Buyer must agree to maintain the property as the Tenant/Buyer's primary residence for the duration of the lease term, and additionally for a minimum of 3 years subsequent to the property purchase closing transaction, thereby eliminating speculators from participating in S.C.O.R.E. property purchases.



4. The monthly rent payment for the lease term is determined by the property C.M.A. value amount, amortized for 30 years at a 5% interest rate, interest payment only, plus an additional 10% of this "interest only" amount for a property administration fund which shall be credited to the Realtor on a monthly basis, plus 1/12 of the yearly property tax total, plus 1/12 of the property insurance premium as arranged by the Realtor. The property administration fund, tax and insurance premium portions of the monthly rent payment, and the "Occupancy Deposit" are each to be administered by the Realtor from a "receivership account" maintained by the Realtor and applied by the Realtor accordingly. The Realtor shall provide an itemized monthly statement to the Property Owner and the Tenant/Buyer showing details of disbursements and the "receivership account" balance, and shall further make remittance on a quarterly basis of "interest only" portion of monthly lease payments to the Property Owner. The Property Owner shall apply 60% of the "interest only" portion of the monthly lease payments by Tenant/Buyer as rent received, and shall credit Tenant/Buyer with 40% of said "interest only" portion of the monthly lease payments. Said 40% amount shall be held in a Property Owner administered escrow account, and shall be credited to the Tenant/Buyer as a property purchase down payment at the property purchase closing transaction, as applicable. In the event of the Tenant/Buyer's non-exercise of the property purchase option, the Tenant/Buyer forfeits this 40% portion of "interest only" portion of the monthly lease payments, in full. As such, 80% of the "interest only" portion of the monthly lease payments total would be credited to The Property Owner as rent for the lease term and the remaining balance (20%) would be credited to the Realtor as a Lease Commission balance payment.



5. The lease occupancy term by the Tenant/Buyer shall be for a maximum duration of 30 months. The Tenant/Buyer must exercise the property purchase option on or before the expiration of the 30th month subsequent to the S.C.O.R.E. lease/purchase agreement date, or in the alternative, shall vacate the premises within 10 days of the lease term expiration. At the property sale transaction, the Realtor shall be entitled to a property sale commission in an amount equal to 5% of the total sale price of the property, determined by the initial C.M.A. (as noted in paragraph 1.), and said amount shall be in addition to the "Lease Commission" payment(s) to the Realtor as noted in paragraph 2., payable at the property sale closing transaction (closing). The Property Owner and the Realtor shall disperse any and all monies on account held in escrow or in the receivership fund as administered by the Realtor at the property sale closing, and the Realtor's term for administration of the S.C.O.R.E. lease/purchase agreement shall expire at the time of the closing, or at forfeiture of lease by the Tenant/Buyer, as applicable.



6. The Property Owner shall have the first option to finance purchase by the Tenant/Buyer as the purchase option is exercised by the Tenant/Buyer, for a term and rate which shall be reflective of the market lending norm at the time of the sale transaction, provided that the Tenant/Buyer has a minimum credit rating at the time of closing as specified by the S.C.O.R.E. lease/purchase agreement, and the Tenant/Buyer does not exceed a monthly payment to income ratio limit at the time of property sale closing transaction, as similarly pre-determined by the S.C.O.R.E agreement. In the event of the Tenant/Buyer's failure to meet the specified minimum loan qualification requirements at the expiration of the lease term, or the Tenant/Buyer fails to secure alternative funding as required to finalize the property sale closing transaction, the Tenant/Buyer shall forfeit any and all monies on deposit with the Property Owner and/or the Realtor and shall vacate the premises within 30 days of written notification of same. In such event, the security deposit shall be applied as required to prepare the premises for marketing for sale and/or occupancy through a new S.C.O.R.E. lease/purchase agreement with a new Tenant/Buyer, as deemed appropriate by the Property Owner. Any surplus of the security deposit that remains shall be dispersed between the Lender and the Realtor in accordance with the lease payments interest portion disbursement as noted in paragraph 4. (80%/20%), as applicable.



7. 7. In the event of the Tenant/Buyer's failure to remain in compliance with any and all of the terms of the S.C.O.R.E. property lease/purchase agreement, including that of the minimum residential occupancy requirement (see paragraph 2.), the Tenant/Buyer shall vacate the premises within 30 days of written notice of said failure from the Property Owner and/or Realtor, and the Tenant/Buyer shall further forfeit any monies held in account(s) by the Realtor and/or the Property Owner, and shall further forfeit any claim in interest to the leased property. If the Property Owner enters into a new mortgage agreement with the Tenant/Buyer as the Tenant/Buyer exercises the property purchase option as provided by the S.C.O.R.E. lease/purchase agreement, in the event of the Tenant/Buyer's default of the terms and conditions of the new mortgage by the Property Owner, within 36 months subsequent to the property sale closing transaction, the Tenant/Buyer shall surrender the deed of the subject premises to the Property Owner and any and all subordinate liens shall be expunged as a precondition of the new mortgage, as applicable. In such event, the Tenant/Buyer shall further forfeit any claim in interest to the subject premises and the Property Owner shall take possession of clear title to the premises, without the need for foreclosure by The Property Owner. In the event of dispute of the S.C.O.R.E. lease/purchase agreement and/or The Property Owner provided mortgage terms and/or conditions, the burden of proof shall be on the Tenant/Buyer.

Attached are completed sample agreements included for the purpose of demonstrating a fictitiously executed S.C.O.R.E. "lease with option to buy" agreement. The first agreement shown is the "S.C.O.R.E. PROPERTY LEASE AND PURCHASE OPTION AGREEMENT" between the fictitious occupants John and Jane Doe and the fictitious Property Owner being the municipality of Clarksburgh, NY. This agreement shows the property C.M.A. valuation to be in the amount of $120,000.00 with a monthly lease payment in the amount of $845.03, beginning on the first day of January, 2009 and with a lease expiration date of June 30, 2011.

The second agreement shown is the "R.E.O. PROPERTY MARKETING FOR SALE and S.C.O.R.E. Lender-Realtor Servicing Agreement" that shows the terms between the Property Owner and the Realtor for the marketing for sale of the property and for the servicing by the Realtor of our fictitious S.C.O.R.E. "lease with option to buy" sample agreement.

Structured to specifically address the immediate needs of families faced with challenges posed by limited household income or a recent financial setback, The S.C.O.R.E. Property Lease - Buy Agreement represents the most viable, cost effective and rapid means for reducing vacant, and often unmaintained inventory in the housing marketplace. This low-cost and powerful strategy is a "Win/Win" for property owners, community homeowners and prospective marginalized buyers alike. Thousands of new jobs would be created, hundreds of families would be reintroduced as prospective buyers to the realty market place, billions of dollars in unnecessary costs would be eliminated and the glut of inventory spawned by the millions of recent foreclosures would be rapidly reduced. S.C.O.R.E. represents responsible crisis management that can be very efficiently implemented in any regional housing market.

The other essential prong to our strategy for solving the foreclosure, credit and housing crisis' is to implement an equitable foreclosure prevention agreement known as DEFERRED EQUITY EXCHANGE AGREEMENT.