Recently we made 6 bank loan purchases. Bank loans are less often available to us, however when they do become available, as my dad used to tell me when I first started over 30 years ago in this business “make hay while the sun shines”, so we bought all of the loans that were attractive to us.
Bank loans have extensive paperwork associated with them. 6 very thick files of paperwork was a very time consuming job to accomplish. I was unable to post to our blog in March because we were so busy here, working 6-7 days a week to meet deadlines.
Now that the rush has settled down, I can tell you about it. Firstly banks sometimes sell performing loans off because the bank has a perceived risk. Sometimes the borrowers don’t provide their annual financials to the bank as required in their loan agreement. This makes bank regulators nervous. Also many borrowers contact their bank asking for a rate reduction or other concessions because they hear on the news that banks are making loan modifications and the borrowers feel entitled to something because their loan was made in 2008 or 2007 and the rate is a bit higher than what today’s rate would be. The bank is under no obligation to modify a loan, but has a hard time telling the borrower to perform to their contractual obligation for some reason. I guess the bank doesn’t want any bad public relations or have the “99 percent” protesters show up outside their corporate headquarters.
We buy almost exclusively multi-family and commercial loans from banks. Those loans are my favorite because when there are many tenants paying rent, it’s very easy to make the mortgage payment from those rents collected and even if you have a vacancy or two, the likelihood of the loan going bad is low. Of course the correct LTV, good credit of the borrower and location of the building is very important. But in general it has been my experience in my 33 years in the business that apartment building loans in almost never go into default. On the few occasions that we have had an apartment building 1st t.d. default, we have been able to take the building back and either resell it or set it up with a management company to run it while we wait for a better market to sell it.
Well, out of the 6 loans totaling over $4,000,000 5 of them were on apartment buildings here in So. Calif. The 6th one was on a commercial building here in Orange County. I’m glad to say that all 6 that we purchased are solid loans, all the payments are in for April and we still have plenty of funds available to buy private party loans.
If you have a loan that you would like to get a quote on, please feel free to give us a call or click on “get a quote” on our website.

Owning a mortgage company has its daily challenges. Besides keeping up with the latest laws, regulations, licenses, reports, collections, restrictions and alike, we are always looking for new business.
I would say we go through 20 quotes before we proceed with an actual deal. So many times I have listened to the seller of a loan, or a broker of a refinance request and think to myself where are the “Cherry” loans anymore?
Back in the 80’s there were so many loans, we had a problem finding the funds to buy them or fund them all. That quickly changed in the 90’s when we had much more in funds than in inventory and when the turn of the century came it was a trend that continued. Now in 2012 more than ever we have many millions of dollars available, but placing it in high quality paper is a big problem, because it’s just not out there.
We are always working on something, as we are now, but I can honestly say that if your note is a “Cherry”, we will do almost anything to buy it. Our yields have never been lower and our motto of “top dollar paid” may be old fashioned, but it’s very true. Let me be your last pricing quote and you’ll be very happy. We know the market very well and the other firms out there who do what we do, I can confidently tell you that our pricing will be the best or if we can’t beat your other quote, I’ll tell you.
Being the best quote and having the funds immediately have made our reputation. This month we celebrate 33 years in the business. Give us a call or send us an e-mail request for a quote and you’ll know why we are so successful for so long.

Recently the note market has lost a valuable resource. Whatever your opinion of Russ Dalbey is, his company provided a valuable service to us note buyers by posting on a large scale, notes for sale that were found by his students / finders all over the country. A couple of years ago, I was invited out to his Colorado business headquarters and met many of his staff, I have also met Russ personally, I like him. He impressed me as sincere and knowledgeable. It’s a shame to see his site go down.

I have dealt with many of his students over the last 8-10 years and have had good experiences with nearly all of them. I have closed many deals with Russ’ people. I would welcome any current or former student to contact us at any time. We always are able to quote on how much a note is worth and have 33 years of experience and advise on the note business if asked. I concentrate on notes here in California, I was not much help to Russ’ nationwide business, but here in CA, I was definitely the one to respond to his postings immediately after I saw them on his site.

We welcome other brokers, loan originators, loan finders, students, referral agents, anybody in the note business if you have a note in CA to discuss.

Being busy is usually a good thing. Our volume of deals to close by year end kept us from a blog entry in November and finally we have a breather to post one for December. In our business you never know what the day will bring. Over the nearly 33 years I have been in this business people got to know me and our firm. While it is rare to have a repeat customer sell us a note, it is not unusual to hear from somebody we bought a note from back in 2000 or even the 90’s call us with another note to sell now.
We have been in our present location for 19 years and prior to that in the city of Orange for another 7, prior to that, starting in L.A. back in 1979. Sometimes we have note sellers drop by, sometimes hear from them by e-mail and we receive holiday cards from folks I did business with way back who still want to keep in touch.
There is something to be said about experience, service and performance. We are proud to tout all three here at DMC. As we go on to 2012, with an underlying depressed real estate market and uncertain economy, financial troubles for many Americans and certainly a looming financial crisis in Europe which will affect our banking system and ability to borrow, you can be assured that doing business with our firm will bring knowledge and experience to the table that you can’t necessary count on elsewhere.
If you are considering selling your Note, or have a multi-family property that you would like to refinance, give us a call or send us an e-mail with the information for a free and no obligation quote. Have a joyous holiday season and we’ll be looking forward to a strong year in 2012!

While you see the Dow Jones index swing wildly, gold hit new record highs, financial institutions like Bank of America loose 1/2 of their value this year and other events happening around you, how does it affect the Real Estate and Loan markets? In general the economy effects the real estate market the most. If the economy is weak in general, real estate values are weak as well. Buyers are not out there making the market stronger. Most of us are used to the bad economy, it has been going on for a few years now and it looks like it is not going to change much for the forseeable future.

Getting used to volitility in the stock market and perhaps another drop in real estate prices to the tune of 10% looks like more and more the way things are headed. Banks in Europe are under pressure, Greece, Ireland, Spain and now Italy are the 4 most troubled countries with financial problems that may not be able to be fixed. As worries about banks in europe being able to stay solvent, our own Bank of America took on all the problem loans from Countrywide Mortgage and is paying to the tune of $20Billion to make things right. The credit downgrade of Fanne Mae and Freddie Mac also prompted more problems for the financial market, contributing to the huge down swing of the Dow. Financial institutions have much trouble and still no end in sight with mortgage foreclosures still at very high volume, although down from the record numbers in 2009-2010.

The loan market for Trust Deeds is all about quality. Having a “cherry” loan to sell is where you want to be. A large cash down payment of at least 20-25% is a must, the loan you carry needs to have principal in it, preferably fully amortized, so that the loan balance comes down as time goes on, which will give the holder of that loan a hedge against any drop in real estate value. Certainly a late charge if more than 10 or 15 days late, also a due on sale / due on transfer clause is also desirable. Some sellers are placing an anti-junior encumberance clause in thier loans, so that the borrower can’t pull out more equity out of their property, making it easier to walk away from in case of another downturn in prices. The last thing to think about is to impound the real estate tax payments with the mortgage payment, remember taxes come before any mortgages, often the loan holder is one of the last to know that the taxes are delinquent, if you don’t impound the tax payments, at least buy tax service, that way you can be on top of the situation in case the borrower misses their installments.

If you would like to know how much your seller carryback loan is worth, please feel free to call or click for a quote.

Earlier this month we purchased a seller-carryback 1st position loan on a 2 unit commercial property in Sherman Oaks, CA. The seller shopped around and actually was quoted a slightly higher price by another company who promised to deliver. After the other company fell through, we funded the deal in 72 hours.
That was a bit quick, but it doesn’t take very long because unlike other companies that need to “fish” for their funds in order to come up with $500,000, we have an established long history with our bank as well as adequate deposits to handle any sized seller carryback loan that comes our way. I was able to get right out to the property in order to take a look at it, I never disturb the tenants or new buyers, the couple of photos I took were taken very discreetly and the whole thing took less than 15 minutes.

Having an experienced note buyer who knows what they are doing is important in your transaction. Usually we’re the highest quote, if you call us and we are lower than somebody else who is legitimate in the business, tell us and we will make every effort to match or beat the other guy. In this case it just wasn’t a
real quote from the other company, I had to tell the seller if the other company didn’t perform, please call us back and that is exactly what happened.

After 32 years in this business, we are firmly established in the market and know what is real and what is not. After receiving a price quote from us, I offer customers references of other customers that have recently sold us their note, so they can call for themselves if they like and confirm that we paid what we quoted, on time and by Cashier’s check or bank wire, if requested. We are only as good as our last
deal is our attitude. Let us earn your business.

If you are thinking of selling your seller-financed 1st trust deed, please consider calling us for a price quote!

     The Associated Press posted an article today concerning economic data coming out for the month of March that shows housing starts in the West are up 27.6%, you would think that is good news and to an extent it is.  But the bigger picture is that just the month before in February, housing starts were at a 5 decade low!  Even if housing starts were up an amount double the statistic, it is still woefully lacking to have any meaningful effect on the economy.  Housing starts are still at a lower point right now than during any recession in the 80′s and 90′s.

     Housing starts are an indicator of the economy that effects the Note business the most in my opinion.  If housing starts are up, that means in 6-9 months those houses will be hitting the market for sale.  Builders are looking to make their profits by selling homes and have forecasted that the market will be favorable for them.  Single Family Homes (SFR’s) are comprising about 80% of the new home construction, then condominiums and apartments comprise the rest, which were also up, but again still at a very, very slow pace.  Notes secured by Trust Deeds are carried back on real estate, most notes carried by private parties are on SFR’s.  The more housing starts, the more housing sales, the more potential for Notes from sales in general.

     Real estate construction can support jobs, for each new home built, it supports 3 new jobs for a year.  California has a big part of its economy based in the real estate industry.  Housing traditionally has accounted for 15-20% of overall economic growth, however in this post-recession period since 2009 on into 2010, housing only accounted for 4%.  This is saying much about the true nature of the slow recovery we are experiencing.   No true recovery can take place unless housing and real estate picks up.

     Millions of foreclosures have kept the real estate market down and continue to do so.  Most economists still predict that 2011 will be another year of slow housing sales, also prices to remain down, even slipping a bit more before a modest recovery takes hold.  

     Housing starts being up for the month of March can be a good sign, but only if the trend continues.  The banks are still in the midsts of filing so many foreclosures that the market for those new homes which will be completed in 6-9 months from now is likely to be not be as favorable as the builders are predicting, which may cause some builders to go bust and prices to remain depressed.

     If you are thinking of selling your seller-carryback Note in this environment, all the more important to have the note well secured by having the most cash down payment that your buyer/borrower can afford, at least 20-25% cash down and have your note be fully amortized, where the balance reduces each month as the payments are made, making the note safer as time goes on.  You might consider having the real estate tax payments impounded with the note payment as well, another safeguard to have.

     We can help you structure your note for the most protection in this market.  We can let you know how much your note is worth by just a simple call, or fill out our quote form and submit it, we will e-mail you back within a short period of time.

Today the Associated Press released statistics that Americans net worth rose by 3.8% during the last 3 months of the year last year.  The numbers are showing how we are continuing to rebuild net worth lost from the recession.   This is welcome news for us in the mortgage business because rising net worth means that the recovery is continuing.  Higher net worth means more available cash and other assets to draw from in order to make mortgage payments.

The AP article also stated that cash accounts for 13% of corporate assets, the highest percentage since 1984.  The 1/6 trillion dollars in cash being held by corporations could be used for job growth, much needed hirings which would bring the unemployment rate down faster. 

In the recession we lost nearly 8 million jobs in this country.  There are only just over 1 million replaced since.  The recession technically ended in the last quarter of 2009, but jobs are lagging sorely.  We still have a long, long way to go to recover the remaining 7 million.

Prices of oil, food, metals and just about everything are rising as the dollar is weakened by both federal government policy and the events that are unfolding in the world.  The federal reserve announced that their policy of quantitative easing of interest rates will be phased slowly out, meaning that rates will be going up in the future at a planned slow pace. 

If you are holding a seller-carryback note, I would say that now is most likely the best time to sell it.  When interest rates rise and as the economy gets a little better and better, your fixed low rate on your note will become less and less attractive.  The main factor affecting the discount on a note is the face rate or “coupon rate” it bears.  If your note is only written at say 5%, when interest rates rise, it will have to take a higher discount to make up for the then market rate.  A higher discount means less money paid to you.

Call or click for a top dollar quote on what your note is worth now.  We have been buying notes for decades and have a great reputation to pay the highest possible market price.