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| Buying Mortgage Notes-Why Would A Lender of Bank Rep Sell? |
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| Written by Dean Engle |
| Thursday, 26 March 2009 09:09 |
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I was recently asked a question that I would like to share with you. I think the information will be valuable to you. "I have been doing some reading on all the reasons why lenders would sell properties at big discounts... In regards to lenders and their concerns, what factors determine their choice to sell discounted mortgage notes? Since we are trying to think in the mind set of the LMREP, it would be helpful for us to understand their concerns so that we can sell our services". Here is my response: First of all make sure that you are using the correct terms when trying to express your points. You need to differentiate the difference between mortagage notes and properties. You mentioned both in your question. If you were speaking to a bank rep, they would know that your inexperienced. They would probably think that you're a newbie that doesn't know the difference between a deed of trust and a deed, this for certain would get you no repsonse from the bank. A Tip on Buying Mortgage Notes Make sure you know the lingo before you call these banks: Remember that when you are talking to that key person when buying mortgage notes, you have only one chance to make a great impression. How is that for wisdom? A list of reasons: Reasons to Sell Mortgage Notes at the Institutional-Level a) banks may be merging or have annual reports that are due, and selling off the notes is the fastest way to clear assets. b) maybe a relationship already exists between the bank and the borrower, or some situation like that. c) the bank may not want "bad press" and might be under to pressure not take aggressive recovery actions like foreclosure against the borrowers. An example would be minority first time home buyers. d) although the banks have no problem starting the foreclosure process, a lot of them do not want to carry our the actual foreclosure. When buying mortgage notes, you may see a lot a week away from foreclosure proceedings. e) loan is upside down and doesn't warrant recovery action/expense (small 1sts sub $20k on properties of similar value may never be foreclosed on by certain banks - great opportunities in buying mortgage notes present themselves in many cases) f) In order to see what the market would pay for these loans, banks may price a part of its non performing book and send it out. Individual Rep Reasons to Sell Mortgage Notes: a) Borrowers can be flaky, they won't follow through on payments, or just unwilling to work with the bank. The loss mitigation rep does not want to work them anymore as well. b) there has been no contact with the borrowers c) depending on the state they are in, the foreclosure process may be harder e) authorization over certain write offs and mortgage note sales is within the rep or their direct managers authorization. When required to go to upper managment for aprovals the process is lengthened...so in those cases they may pass. f) in order to meet quotas, they may sell off a couple mortgage notes so they can get their bonus. (this usually happens in banks) I hope you found this information useful. About the Author: Interested in learning more about the Discounted Mortgage Business? Watch Hours of FREE Training Videos here: Buying Notes Real-life, Up-to-Date Information for You. Visit NoteBuyingProfits.com or Call 718-783-7605 Or Click Here: Buying Real Estate Notes From Dean Engle & NoteBuyingProfits.com - This time on Buying Mortgage Notes Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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