Archive for October, 2013


Monday, October 21st, 2013

Having a busy office is always an indication you are doing the right thing. Often we are too busy to make blog entries, it has been overdue for us so here we go.
Recently we have had a flurry of loans come through from non-private party sources. Our bank loan portfolio purchases are when the opportunity arises and it arose in late summer / early fall so we bought up about a half-dozen loans that we worked on over the last 6 weeks.
Bank loans have an advantage of having very accurate payment histories. Too often private party loans we buy do not have accurate histories. We recommend to private parties to copy the incoming check from your borrower, also keep the envelope that the check came in showing the post mark that it was mailed. If you receive your payments electronically, you should have those electronic records / e-mails or bank statements showing the payment arriving timely. Getting top dollar for your loan is a process that includes having accurate records for collections.
Another issue is eliminated when we buy loans from a bank and that is any disputed balance. Often when a seller carries back a loan and something is wrong with the property, or the borrower complains about the payment or rate, a verbal agreement between the seller and borrower is made to just ‘skip’ a month’s payment to make up for some repair or unexpected expense that the buyer has incurred during the 1st year of the loan. Often the gross income from an apartment building Note is affected by a seasonal rental moving out or a roof problem the first time it rains after the buyer signed up for that seller-carry loan. To avoid problems like these a seller needs to have the buyer sign a clause in their seller-carried Note that the borrower has no claims or offsets now or in the future regarding the Note. This can also be accomplished at the time we buy your note from you by us sending the Payor the form. When we buy your loan, we ‘stand in your shoes’ so to speak and if there is an offset or other agreement, we also may be subject to that agreement after we buy the Note from you.
Our concern is that you as a note seller have your Note protected as best as possible before you bring it to us to sell. Those protections cover both you and us when we take over the Beneficiaries position of the loan.
If you would like to know more or if you would like to get a price quote on your Note, feel free to call, click or fax over your information and we’ll get right back to you.