Non Performing Mortgage Notes Sales

how to buy mortgage notes


You finally Buy your dream homesteaders – now what?There are literally thousands of homes in default throughout the United States, and stars are doing wheeling and dealing. Understanding how this shatters the banking system virtually changes the way in which we buy homes.

The most common way for most people to buy a primary residence is by obtaining bank loans, but these loans have been printed out of thin air. You probably remember attending a high school graduation and the teacher often exiting the podium holding a few pieces of paper in each hand.

For these poor savers, the bank had purchased the “real estate” on the piece of paper for the student ( oddly crawl Laser scam artists Build fee legal but predetermined a home so that it would appraise for 20 to 30 percent more than it seemed possible). This was cash money. This was an “all transactional closing” to another investor not knowing the paper and the behind the scenes deal. If you didn’t buy something your parents could have picked from a list of approved properties, then you really had nothing to lose in adjustable rate mortgages. If you did the same thing today, then you have nothing to gain, except possibly declined credit.

Why the banks are willing to strip the concept of the “all transactional closing” is beyond me. Mortgage Notes create financial security for themselves and their investors and then demonstrate how the Bank can directly benefit them.

For every completed mortgage note sale there are multiple buyers coming to the table who were not able to meet their obligations on the purchase (but who subsequently ended up as owner of the property and who are now enjoying the benefits). Imagine if you got the next area home which sold for $1M for $500,000 and then you out there sold that property to 100 new owners at $250,000 per home after which you pockets the $50,000 per sale.

Imagine if you were able to do this 10 times… you would have cash flowing every month. The only problem is innocent homeowners like you who were proud owners of the property and of course paid all cash. Guess what, over the past 3 years the real estate market has declined at an accelerated rate which means you have truly cleaned up with this type of transaction.

1) Contact local banks, credit unions, and mortgage brokers to see if they have an empty property they need to rid themselves of. Sometimes these banks have a few a bank owned properties they’d like to rid themselves of, sometimes these institutions are not high on their “junk in land” inventory and might be willing to Activate a note buyout at a premium 1st position price.

2) To get yourself into the lead on mortgages in default in the local area, you can start by purchasing a list of non performing notes and collecting the addendums associated with the mortgage loans of default on properties over a designated time period. Then if you can find a motivated note holder who has a home that needs floor removal, you could assign several of these non performing notes and obtain your own short term mortgage funding sources.

3) In today’s environment, the most motivated note holders will receive a larger discount on the sale of their note. You can assign many of them to gain access to that previously unheard of short term financing, and based on the default rate of these notes you can create some great risk-free long term passive income for yourself and your family.

4) Once you’ve dealt a few mortgage note purchases with a motivated mortgage note seller, you’ll also understand the general concept of abidance with a note buyer saying “Hey, whatever you need I have it, if you need a contractual amount then I have that too, and if you’re willing to work with me on the down payment, I’ll pay you back up to 200% interest with no money out of my own pocket” It’s in their best interests to get rid of the note, even in a declining overall economy. Of course, they still have to pay back the purchase price for their trouble, but now they won’t have to cut into profits trying to manage a necessary and popular business.

5) Here’s another way you can start building your investing portfolio. Once you’ve developed a name for yourself among your local mortgage note buyers and these credit organizations, you’ll begin to get requests where you can sometimes match an upgrade from an existing Note Buyer to a new Note Buyer. You pick from the accepted offers and then arrange to meet with the Note Buyer and discuss how you can move your business further where they need to do business with you.