Where to Find Mortgage Notes to Buy
Where to find mortgage notes to buy. According to the Mortgage Bankers Association, the U.S. forbearance rate measuring the share of mortgages with suspended payments fell seven basis points to 5.83% last week,
“With more borrowers exiting forbearance in the prior week, the share of loans in forbearance declined across all loan types. Almost half of forbearance exits to date have been from borrowers who remained current while in forbearance, or reinstated by paying back past-due amounts,” said Mike Fratantoni, MBA’s senior vice president and chief economist.”
While forbearance levels have begun to return to those seen in early April, the MBA said numbers remain remarkably high, with an estimated 2.9 million homeowners in forbearance plans.
Ongoing Recovery Needed
According to Fratantoni, further improvement will require ongoing recovery in the job market and additional fiscal stimulus, which looks like Congress won’t finish until after January 2021.
Some homeowners will not make it out of forbearance. That presents an opportunity for us to invest in notes and deeds. As note investors, we can help people stay in their homes after “life” happens to them, and we get to make money doing it. That raises an important question: where to find mortgage notes to buy.
Where to Find Mortgage Notes to Buy
Hard money lenders, individual investors, and community banks can auction-off or sell-off mortgage notes (the notes can be current or in various states of default)
Investors can bid on and purchase these notes and start receiving payments from the borrowers
You become the bank and service the loan yourself or hire a third-party servicing company that also deals with late pays.
How to Buy and Sell Notes and Deeds
- Look at the most recent quarterly balance sheet that lists liabilities for any bank associated with FDIC insurance
- See the many residential and multifamily loans
- You can check the status of loans (30-60-90-120 days past due) in pre-foreclosure
- You can contact the bank directly to see if you can bid on those notes – you bid less than the face value for those loans
- Smaller community banks are best to deal with
- Larger banks like Chase may ask you to put down $100K plus to be on their list to bid
- Ask the smaller community banks to send a spreadsheet (called a tape) of all deeds of trusts that you can bid upon that are 90-days past due. The spreadsheet says all the details (principal balance, monthly payment, property address, fees, etc.) You can bid on the entire list of “cherry-pick” the deeds you want
- The property backs up all deeds. You can also research to determine the value of the property
- Ask the bank for a list of all their performing and non-performing notes up for bid
- If you are interested in cash flow, you target the list of discounted notes for those that are past due (60-180 days past due) – the discount is on the principal balance of the mortgage (can sometimes get for 20 cents on the dollar)
For more information on Building Wealth with Notes Workshop from Paige Panzarello, you can register for the next class or go online for training. Or listen to these powerful podcasts.
Paige Panzarello, the “Cashflow Chick,” Founder of The Tryllion Group, Investor/Entrepreneur having done $150 Million+ in real estate transactions; Specializing in Non-Performing Notes. She has been a regularly featured guest on “The Cashflow Guys” podcast, and you can also find her on many other Real Estate and Entrepreneurial podcasts and in the Wall Street Journal as well. She also speaks at various Real Estate Investing clubs and conferences across the country. Paige teaches the “Building Wealth with Notes” Workshop that drills down into the details of how to successfully buy Non-Performing Notes, create passive income, and mitigate risk. www.CashflowChick.com/training
Surviving the crash of 2007, Paige knows how “life happens” every day. Her passion is to help people build wealth, secure their financial future, enjoy life, and be ready-not broken! Whether it is improving communities one house at a time, assisting borrowers in staying in their homes, or working with other investors to learn a new way to earn higher investment dollars for their retirement years, Paige potentially dedicates herself and her business to helping people improve their lives in every way. For more information got to www.CashflowChick.com