The key to successful note investing is thorough due diligence before executing the purchase since the integrity of the note, the borrower’s ability to resume payments and the underlying asset value of the home all play into the target exit strategy of having the loan changed from distressed to performing.
Assets purchased will be acquired through various channels developed by us in our course of business. These channels are a result of relationships developed with resellers, brokers, asset managers and online note brokerage businesses. Our due diligence process creates a normalized mortgage file review platform whether the files are fully intact or have eroded in the secondary market over time and trading.
We start by vetting the seller of the note, then check on borrower pay history, fair market value of the home, location, market value dynamics, unpaid taxes, HOA dues, insurance, and subordinate liens. After an indicative offer is accepted we then review copies of the loan collateral files for key documents like the note, mortgage, chain of assignment integrity, allonges, and bankruptcy status/history of the borrowers.
Below is a general list of the processes involved:
- Analysis
- Analyze The Tape Assets
- Select Candidate Asset
- Due Diligence
- Collateral Review
- Title/O&E Report
- BPOs
- Tax & Insurance Evidence
- Market Analysis
- Purchasing The Note
- Determine Optimal Price
- Making the Offer
- Loan Sale Agreement
- Funding
- Collateral & Assignments
- Loan Boarding
- Federal Compliance
- Loan Workouts
- Rate Reduction
- Principal Reduction
- Principal & Rate Reduction
- Re-Capitalization of Mortgage Arrears
- Principal Reduction Refinance
- Principal Reduction Buyout
- Execute Forbearance Agreement
- Alternative Exits
- Deed In Lieu
- Short Sale
- Foreclosure
- Asset Management
- Servicing The Loan
- Maintain Property Taxes & Insurance
- Property Preservation
- Liquidation
- Borrower Refinances or Sells Home
- Sell Note