Bail Bonds Collateral

Bail Bonds collateral can come in many forms. Bail Bonds Collateral is considered a form of Security. Collateral is property or something of value that “secures” the payment of a loan. Normally, collateral must equal in value of the size of the loan someone is seeking. The most common form of collateral is Real Property or Real Estate. If someone wants to sign for a $50,000 bail bond, they must provide collateral equaling $50,000. This is usually done in the for of equity in a house owned by either the defendant or indemnitor.

Bail Bonds Collateral

Types of Security (Collateral)

Personal Property Collateral

• Cash: the most simple of collateral is to just provide cash equaling the amount of loan needed. The form of cash accepted is; actual cash, money orders, or cashier checks. The reason some people use cash as collateral is that they would rather someone else risk the amount of the bail bonds then themselves. A normal bail bond is backed by the Bail Bonds Company and also by the Sureity (Insurance Company) that the bail bondsman is working with.
• Automobile or Mobile Home: In order to use these types of vehicles for collateral they require DMV pink slips. Meaning, vehicles must be fully owned by the person who is putting the vehicle up for collateral. Mobile homes have to have the pink slip but also need to comply with Code for repossession and liquidation. Obisously its still up to the bail bondsman to decide whether or not the collateral has any value.
• Stocks and Bonds: They must have the certificates to prove value and access to the stocks and bonds.
• Businesses: There must be a strict compliance with UCCI Code. There must also be a Record of Financing statement with the State of California. This type of collateral might take a while to be evaluated. Normally a 3rd party accountant will analyze the business and its profit and loss statements and liquid cash on hand.
• Personal Property: this can be difficult to establish value for. Similar scenarios happen at Pawn Shops all over the world. Its rare for a bail bondsman to take personal property because storage is a big factor. Even if they have enough storage, they would have to figure out how to sell all the objects which to anyone is a real pain.

Real Property Collateral

• Residential: Real Estate is the most popular of collateral used in the bail bonds industry. All property that is placed for collateal must have enough equity in them equal to the total bail amount. i.e. a $350k house that has $25,000 worth of equity in it usually can only be used as collateral for a $25K bail bond. But this can also be left up to the bail bondsman and their assessment of the property.
• varies for single family and multi-family houseing
• realiable appraisal information readily available
• easy to sell
• less likely to forfeit
• provides possible real estate investment opportunities
• Commercial and Industrial:
• relates to business property, offices, shopping centers, stores, theaters, hotels, parking facilities, factories and manufacturing
• Commercial property can be difficult to value and also to resell. Bail Bondsman who deal with commercial real estate for collateral usually have a background dealing with it on its own or solicit specialists to help evaluate collateral deals.
• Agricultural:
• farms, timberland, pasture land, ranches and orchards
• again, these can be difficult to assess value and are also fairly difficult to sell. It always depends on the current real estate market.

Collateral Continued in Next article

Zimmerman’s bail bonds was initially set at $130,000, then he created a website to get donations, $130K worth of donations poured in, he spoke in code with his wife, Shellie, was ordered back to court, and just like that, the judge resets the bail at $1,000,000. That’s the saga in short, but what really happened?

First, let’s talk about the bail bonds process and how the bail was set at $130,000. Every count has whats called a “Bail Schedule.” A bail schedule is a list of penal codes in one collumn and an according bail amount in the next. He is charged with second degree murder. PC 189 shows that, for the State of California, the bail amount should be $500,000. This amount is obviously different for Seminole County. Where the bail schedule probably reads PC 189 has a bail amount of $130,000. Zimmerman would have to come up with $13,000 to work with a bail bondsman. This is the 10% fee that all bail bondsman charge for their services.

Bail Bondsman

At times when the defendant has counsel, the money needed for bail is incorporated in the attorney’s fees. It is not clear as to whether Zimmerman’s attorney took this road.

Why did the bail get raised to $1M? New evidence to the bail bonds saga was admitted to the judge by the prosecutors regarding conversations Zimmerman had with his wife during recorded jail calls. The two were recorded speaking in a simple code. The conversations were about the money that their website has raised, how to move those donations to different bank accounts, and also about a second passport that Zimmerman owned. The Zimmerman’s conversation included references to their PayPal account using the code “Peter Pan” and references to amounts within that account.

With this new evidence, the Judge quickly revoked Zimmerman’s bond and issued a statement for his return to court. At the next court hearing, the judge increased the bail amount to $1M, stating, the bail is significantly higher to circumvent the possibility of Zimmerman using hidden funds to flee the country. This statement referred to the evidence provided by the prosecutors from the recorded jail conversations. The conversations were about funds in different accounts and the mention of passports.

Now set with a $1m bail bond, How did Zimmerman get out of jail in only one day? Zimmerman’s defense kept their mouth shut regarding the needed collateral for such a large bond. See, even with the smaller bond, $130K, there needs to be collateral equaling $130K to secure the bond. The judge revoked that bond and set a new one at $1M. So now, instead of needing only $13K for the bail bondsman fee, Zimmerman had to come up with $100K and enough collateral to secure a $1M bail bond.

The information explaining how Zimmerman was able to raise the collateral for the $1M bond showed up in court documents. It turns out that Zimmerman’s parents put up their house as security for the bond. Its unlikely that the house has $1M worth of equity in it, but at times, it is to the discretion of the bail bondsman to weigh the risks of underwriting any bail bond. The amount of collateral needed to secure any bond can be negotiated with both the bail bonds company and the insurance company that backs them. There is an art and science when underwriting all bail bonds for a bail agent. They interview everyone involved in the bond, where they live, how long they’ve lived there, where the rest of the family is, who has jobs who doesn’t, and many other things.

This risk involved in signing a bail bonds for $1M for Zimmerman seems like a fairly low risk since Zimmerman has a lot of restrictions on him. He has a GPS locator ankle bracelet. He’s being held at a safe house. He has a curfew that only allows him to be away from the house from 6am to 6pm. He can’t leave Seminole County and he can’t go anywhere near any airport, train, or busway. Because of the many restrictions on Zimmerman, the signing bail bondsman probably feels as the risk in backing him is low enough to take on the liability of the $1M. Aside from the liability risks, the bail bonds company probably is getting a fair amount of publicity from the event which has some value.

Our bail bonds office is located directly across from the Van Nuys Jail. Once the defendants in this jail go to court, they all head to the Los Angeles jail. Here they stay until their next court date, of which they get on a high security bus and are herded in to the Van Nuys Superior Court.

So, how does one get out of the Los Angeles Jail? Let’s first explain how they got in to the jail in the first place.

Los Angeles Bail Bonds

They are at home and arguing with their girlfriend or wife. The argument gets very heated. Harsh words are exchanged. Whether alcohol was involved doesn’t matter. The argument reaches a climax with the boyfriend throwing something at the girlfriend, hits her in the head and its over. She’s dialing 911 and the Police are on their way.

Five minutes later there’s a knock at the door. “Van Nuys Police, Please open the door.” Domestic violence cases are unique in the State of California. Ever since the OJ Simpson trial, there’s a new law that states that in every domestic violence case, someone has to be arrested. How the police ascertain who get’s arrested varies per each case. In this case since the girl is the one with the cut over her eye, the boy gets the handcuffs and sent to jail.

They hop in the squad car and head to the Van Nuys jail. This is the jail within the district of the responding police officers. The booking process starts and the defendant is fingerprinted. The police officers review the charges with the defendant, empty the defendant’s pockets, fill the bag, and sign the defendant over to the deputies in charge of the jail. The defendant is taken to his holding cell and sits and waits until his alotted phone call time.

The defendant has a couple choices; wait until his court date or call someone to bail him out of jail. In this story the defendant has chosen to wait in jail (2 days) for his court appearance in hopes of getting OR’d (out on his Own Recognizance).

While still in jail, the defendant learns that his bail is set at $40,000. If he works with a bail bondsman, he would need to come up with $4000 to pay for the bail bondsman’s fee. So he decides to wait out his two days and go before the judge in hopes of getting OR’d.

Two days and six very bad meals go by and now the defendant is standing before the judge. His hopes of getting OR’d are awaiting the judge’s orders. The defendant had previously called a bail bondsman, his mother, and a few others, stating his strategy. The mother is in court and in touch with the bail bondsman to let him know the verdict of the judge’s decision. If he gets OR’d, they’re good to go and no bail bondsman needed. If the judge doesn’t change the bail and leaves it at $40,000, she’ll call the bail bondsman and move forward with that strategy.

The results are back. The judge has ruled that the bail will be left at $40,000 and the next court date is 18 days away. Here’s where we find out how the defendant ended up in the Los Angeles Jail. See, he’s currently in the Van Nuys Jail. The only reason, normally, to be in the Los Angeles jail is if you were arrested in that area or if you’ve already seen the judge and transferred to the Los Angeles jail. Most defendants in Los Angeles County end up in the Los Angeles Jail once their bail arraignment has been heard and they do not post bail or get OR’d.

The mother is on the phone with the bail bondsman, getting all the paperwork done, paying the $4000 fee and signing all the paperwork. This is the normal bail bonds process. Meanwhile the son, the defendant, is in a holding cell in the courthouse thinking he is gettin bailed out. His normal path is to get on a bus and travel to the Los Angeles Jail, but he’s believing that the bailman will come through with the bond and post his bail.

The mother and the bail bondsman get to the court at 3:00pm to post bail. Leaving quite enough time to alert the court clerk and anyone else that the defendant has bailed out and may be released, BEFORE, being transferred to the Los Angeles jail.

He’s not that lucky. Aside from the bail bondsman going to the court and pestering everyone that needed to know that the defendant had a bond posted, the bail bondsman did his job; posted bail, alerted the court clerk and the one’s in charge of lockup at the court, and alerted the mother.

It seems sometimes that the deputies or others in charge of herding the defendants in and around the court and to and from the bus that goes to the Los Angeles jail get tunnel vision. They just don’t want to do the paperwork involved in dealing with the bonds that have been posted and rely on minimal duties at best. Herding the defendants to the bus.

The defendant in this case, even though all the bond paperwork was filed correctly, ended up being herded on to the bus to the Los Angeles jail. So Instead of being released at 3pm that day, he spent the night in the Los Angeles jail. A situation not happily taken on by many, since when you arrive, you get to strip down to nothing, receive a full body cavity search, and get placed in cells with some interesting characters at best. That’s where he ended up. So, instead of being released from his local Van Nuys Jail or court, he was released 19 hours later, at 9am the next day from the Los Angeles jail some 25 miles away.

A Bail Bondsman retires by the use of his/her buff fund and possibly the sale of their company. Throughout there years of doing business, they will have put a decent amount of money in to what’s called a buff. Every bond that is written, a portion of the fee or premium goes in to the buff fund. When the bail bondsman retires, they may pull from this fund, but only if a few things are in place, i.e. liability.

Most of the jobs out in the corporate world have components of savings or retirement funds for the employees involved. Working for a corporation usually provides this in the form of a 401K. Sometimes the corporation matches the individuals investments. None of this is offered in the bail bondsindustry unless you are working for a very large company, and there really aren’t any, so retirement monies are the sole responsibility of the individual.

Retired Bail Bondsman

The buff fund is only available to the owner of the company in most cases. Sometimes the bail agent may work for an employer that has an agreement with them that they get a portion of the buff fund, but its rare.

Can the Bail Bondsman retire at any time? Yes. Can they retire at any time AND get their buff fund returned to them? No.

Getting all of the buff fund can happen in two ways:

One: Over the years a bail bondsman writes thousands of bail bonds. Some of these bonds get exonerated and some don’t. Some of the bonds have cases that are still ongoing and some have other situations associated with them like; collateral or deeds that are still outstanding. If at the time the bail bondsman wants to retire, he/she still has outstanding bail bonds, they can not reach in to the buff and retrieve their monies. Well, technically the bail bondsman can, but their surety (the insurance company that backs them) will have legal reasons why they can not. So as the bail bondsman gets closer and closer to the date of retirement that they choose, they continue to work on their outstanding bail bonds to get them exonerated. Once they are all exonerated, the bail bondsman has no more outstanding liability and can retrieve their buff fund and be on their way.

Two: As a bail bondsman continues to build their business, they can develop an exit strategy. The exit strategy is to be bought out by another bail bonds company. Along the way a bail bondsman underwrites bonds. A good exit strategy is to write the least risky bonds available. Of course, this is a good strategy for a company seeking to achieve longevity also. The least risky bail bonds that are written, the better their liablity ratio will be and the more attractive the company will look to a possible investor. As the date of retirement closes in, the owner can start advertising that their company is up for sale. Bail Bondsman are always interested in purchasing other bail bonds companies, but, if the investors do their due diligence and read through all the bonds and see that the portfolio is fairly risky, they won’t want to participate. They might bargain a little and exclude the real risky ones, but that’s not what the retiring bail bonds company wants. So how does the retiree get their buff fund? They don’t. At this point in time there is still many outstanding bail bonds out there, so the buff fund needs to stay in place for the new owner. The buff fund has double duties; possible retirement fund and as a backup for forfeited bonds (bonds that the defendant has skipped on). The foreited bonds need to be paid in full to the court if the defendant can not be retrieved, that money is pulled from the buff. The way the retiree gets paid in this scenario is the new owner is going to buy the old owner out.

The business has value in many ways; the amount of the buff fund, the intrinsic value of the company from its position in the marketplace (how strongly branded it is, how strongly its been marketed, its online presence, all values pertaining to what kind of future business it can create, and the value of the bonds that aren’t exonerated (some of these still have payments to be made on them). So, the new owner will take all this in to account and put up an offer over and above the actual value of the buff fund. Say the company is creating thirty calls a day due to their online and offline presence, that has a calculable value, add that to the total payments that are still due and add that to the total amount of the buff fund and you have the amount the new owner should provide for the sale of the bail bonds business. Once this happens, the old owner can retire and if they did well in building their business, they will be able to retire on monies that are larger than their buff fund.