It’s difficult to find note buyers for junior liens but that is especially true for non-performing second position mortgage notes. We were recently informed of an investor hungry for this type of real estate paper and wanted to share a new addition and update to the real estate note buyer directory.
What type of real estate notes will your investors consider buying?
The junior lien note buyers I am working with are looking for the following:
- 2nd position notes nationwide
- 1st are current to 60 days late
- Any equity above the 1st is always nice but not mandatory
- 1st position Unpaid Principal Balance (UPB) from 1k-250k (CA notes can be higher)
- 2nd position UPB above 10k-150k (again CA could be higher)
Are you looking for only non-performing seconds behind performing firsts or also performing seconds?
Yes – non performing seconds
Any minimum credit score?
No
All property types or just residential?
Mostly residential.
Any ratios for 1st compared to 2nd (for example “the first balance can’t be more than 2 times the second” or something similar?)
No set formula for that.
Does it need to be a portfolio of a certain size or will you consider individual deals?
Mostly portfolios but will look at individual real estate notes.
Is pricing generally 10-25%, 50%, or something different? While it depends on the deal we want people to be prepared for the discount before they contact you.
Defaulted or non performing seconds usually trade for a very small amount – typically under 10%.
Where can people contact you for more information on buying non performing junior liens?
Jeff Bennett
The Note Coach
Office: 201-580-4228
Fax: 973-774-7064
www.thenotecoach.com
Looking for more debt investors? Be sure to grab your copy of the 2012 Note Buyer Directory or login to the Member’s Area of FindingCashFlowNotesTraining.com!
Might be a dumb question, but I’m new to this. Why would someone buy a non performing second mortgage note? It’s not making sense to me. Can someone please explain what the benefits are to that?
You can approach the borrower and offer a deep reduction of the loan balance and still make a great profit since you bought that UPB for 10-25 cent on the dollar. Then set up 3-5 year payment plan. Some who has a 50k 2nd lien might jump at the chance to start making payments on it, if you knock the balance down to 25k (cut it in half). If you bought the note for 10k, you still make out. Or, you can say, “look you 50k, pay me 15k and I’ll drop it. Also, the 1st lien holder can not foreclose without first offering you to make the 1st current. In that case, the 2nd lien goes away. You are left with a 10k investment in the 1st mortgage. May be good or bad depending on the value of the property.
If you’re have or are looking to find out more information about a non-performing note, you can go to http://www.protitleusa.com to learn more.
We are note buyers and sellers for both 1st and 2nds nationwide. If you are looking for notes or have any to sell, please contact us through our website.
What is your website Kylie
Yes I do for first position notes
I have direct contact to non peforming notes sellers do you have buyers
We just added several non-performing investors to the updated Note Buyer Directory. Personally we are buying performing notes. I half jokingly say that I end up with enough delinquent notes buying what I think are performing notes that I don’t need to go looking for them! Of course other investors love them and find them very lucrative.
Thanks for reading and commenting at Note Investor.com
What are the draw backs with second position liens, is it backed by real estate? What if we can’t the the lien performing.
Yes I do have several buyers for non performing second notes.
Hi, I am new to note brokering. I was reading a blog /forum and someone mentioned that your sight provided a list of end buyers. How do I subscribe to the list? I looked in the newspaper a few days ago in the real estate section, I think. I called a few people and ask if they have a note to sell. There was a guy that said yes. I have filled out a mortgage quote sheet. Whom can I fax or email this info to? My cell is 813-863-xxxx.
Hello Ere!
Thanks for reading and commenting at Note Investor!
The Directory of Note Buyers can be found in the member’s area of the Finding Cash Flow Notes Training which you can find here: http://www.findingcashflownotestraining.com
You can view the free intro videos to get an idea of our training style and the abundance of content. The pricing is very affordable (currently under $300) for top quality training from people in the note business.
The Directory of Note Buyers can also be purchased individually in the bookstore on this site. Should you ever want to upgrade your directory purchase to a membership to Finding Cash Flow Notes Training we are happy to reduce membership by the cost of the directory.
All the best!