Archive for discount bank notes
Pressure Rises on Shaken Afghan Bank
Posted by: | CommentsPressure Rises on Shaken Afghan Bank
Afghanistan’s top bank official tried to calm fears of a meltdown of the Kabul Bank a day after the bank changed its leadership following the discovery of losses approaching $300 million.
Read more on New York Times
Who?s Getting Bailed Out? not Mortgage Borrowers From Banks
Posted by: | CommentsThe past few months have amply demonstrated why the seller-held mortgage note niche exists, and why more people are opting to buy or sell mortgage notes and deeds of trust without getting the banks too involved. Now that the Big Bailout has passed, nobody really knows exactly what’s going to happen, except that mortgage borrowers are, in anything, an afterthought in the rush to save the very institutions that caused these problems in the first place. The Treasury Secretary has $700 billion (at least) burning a hole in his pocket, and plans to buy up mortgage-backed securities: “investment products” that were put together by economists and traders to be as insecure as possible while still fooling credit rating agencies (who did, in all honesty, seem rather eager to be fooled, but that’s another story). The idea is that this will give the banks a basic amount of liquidity they can use to start lending money again – to other banks. But if you’ve got a bank-backed mortgage, you’re probably not getting a dime.Politicians from both parties have proposed direct mortgage relief, but the response from the Treasury hasn’t been encouraging. Meanwhile, institutions don’t seem to be freeing up any money at all. They’re still foreclosing. They’re not renegotiating loans and in some instances they’ve even clawed back the worldwide rate cut to boost their margins.While the situation depresses home and real estate prices across the board, the people who’ve been most able to weather the storm are the folks we work with every day – people who didn’t participate in the institutional system. Private note holders didn’t get their mortgages packaged with bad loans and shopped around. They didn’t encourage loan agents to engage in predatory lending because they took personal responsibility for terms. Good for them!We can continue to buy mortgage notes in this climate because they’re not a part of the crumbling investment system. If you took the leap and got control of your own note, you have the opportunity to sell it at a competitive rate even though while the bank-run system haplessly lurches toward its handout. We won’t lie – overall values are down – but we know that private notes aren’t completely chained to what the banks did, or what the government is going to do. That’s an advantage you’ll profit from.
DMO Direct Funding is a mortgage note buyer that accepts mortgages notes, land contracts and trust deeds from throughout the United States. Contact DMO for a free quote if you plan to sell mortgage notes.
Buy the Mortgage Note on a Defaulted Property to Get Some Real Estate
Posted by: | CommentsYou’ve been buying mortgage notes for a little while and are comfortable with the practice. However, you’ve noticed that there are a lot of pre-foreclosure homes out there with mortgages on them too. This is a large section of the mortgage note industry that remains untapped, but how can you get in on the profits with a defaulted property in the mix?
It is possible to buy the mortgage note on a defaulted property. When you use this method of real estate investment you still begin with the normal means of contacting the homeowner in pre-foreclosure through direct mail.
After you’ve spoken with the homeowner and they’ve agreed to sell to you, you’ll have the homeowner under contract to sell their home to you. This is even though you are going to buy the note on their mortgage. You’ll just have them sign the contract so they are locked in with you, and the homeowner doesn’t turn around to try and sell the house to someone else while you are working with the bank. Once, you buy the note the contract becomes irrelevant.
How to Approach the Bank
Go into the bank and ask them if they would consider a Short Sale to you. A short sale involves buying the actual real estate property at a reduced price and the bank writes off the remainder of the mortgage. Usually they’ll say yes and begin to give you all kinds of information to turn in for final approval on a short sale. Then, you can come up with, ‘Hey, wouldn’t it just be easier if I bought the note from you?”
If the bank knows how to do a note sale on a defaulted mortgage, then they’ll usually jump on your suggestion because it is so much easier to sell the note than get the process of a short sale through their system.
Once You Buy the Mortgage Note
After some negotiation the bank agrees to give you a note purchase on this property and they accept your offer of say, $70,000 for their mortgage of $115,000.
By purchasing the note to the property you basically become the bank. You buy the right to collect the remaining $115,000 left on the defaulted mortgage. That’s crazy, right? Nope.
Once you have the mortgage note you have a few options to move forward. You as the mortgage note owner could continue on with the foreclosure and kick the homeowners out of their home, not very nice since you did approach them first. Or you could get a “Deed in Lieu of Forclosure”.
The Deed in Lieu of Foreclosure basically means that the property owner gives you the deed to the property when they can’t make payments on the mortgage. When you first approach the homeowners about helping them out of their property, you’ll want to let them know that you aren’t going to save their mortgage you’re just trying to give them a clean escape from having that defaulted mortgage on their credit.
This means that you aren’t going through with the foreclosure and the homeowner gets out without having a foreclosure mark on their record because they are just giving you the deed to the property.
The process of buying the mortgage note on a defaulted mortgage adds one more step to the basic process involved in a short sale. However, it’s usually quicker, easier and lets you get your piece of real estate investment property
Isn?t it time you learned how to capitalize on one of the best markets for real estate investing? With the recent flood of foreclosures now is the time to learn to invest correctly in real estate from the hosts of the nation?s leading show on real estate investing, Judson and Lynn Voss. Visit http://www.yourrealestatefortunes.com and learn for free, the no-hype truth about choosing the right real estate investing strategy to start making you money, today.