WHAT IS YOUR EXISTING NOTE WORTH IF YOU DECIDE TO SELL YOUR NOTE

by Nationwide Secured Capital

If you have followed the guidelines presented in this Series to structure, create and maintain your note, your note is likely to be a sound investment for yourself, or others – you can then choose to hold the note and enjoy the interest income from the loan you made OR you can choose to sell some or all of the loan to an investor or investment company that makes these investments.
Whether you are keeping the note as an investment for yourself, or for possible future sale, it is VERY important to manage the note according to guidelines in “The Note holders Handbook” available from Nationwide Secured Capital while you are collecting the payments: This assures, that if you ever do decide to sell your note – you will receive maximum value for sale of your note.

You can obtain your complimentary copy of “The Note Holder’s Handbook” on-line, order at:
www.NationwideSecuredCapital.com/notevalue.cfm

If you do want to know the market offers available to you for sale of your note, make sure you work with a reputable investment company that has expert underwriters on staff who can and will give you an accurate and reliable appraisal of current market value of your note and can provide cash offers if you decide on selling.

Trust your instincts when you talk to “note buyers.” If you feel like you just walked onto a “used car” lot, and/or are experience pressure sales tactics – you probably did – walk away – these are not real investors. If think that your “buyer” doesn’t know much and/or doesn’t ask enough information about the note you are selling -walk away – these are not real investors – would you buy a house sight unseen? Or an investment that you know nothing about? Most of these “buyers” are brokers have never used their own money to buy a note, and they often have no idea what real investors are looking for.

There are countless thousands of novice and even a few unethical brokers and buyers, who advertise to “buy your note” and will give you fast offers at an ideally high price that is more likely to drop, than not. They give you the high price out of lack of knowledge or to “get you under contract”, so they can do their homework later. And they always give you plausible explanations as they lower their price along the way to closing.

Real investors and seasoned brokers never offer quick and firm pricing – and there is no pressure to sell your Note. They do their homework before they make an offer – they look at your documents, the property and the borrower(s). And all of your questions about the process and the pricing will be answered.

Credit of your borrowers is one of the most important factors affecting the value of your note – any value or offers you are given without checking credit of the borrower(s) – are not firm and accurate.

If you want a professional “no cost, and no obligation” appraisal of the value of your note, and to find out more about the options to pull cash from your note, simply enter the details regarding the loan you gave at

www.NationwideSecuredCapital.com/SellYourNote.html

 

Related Articles

 

HOW TO MAINTAIN YOUR NOTE AND YOUR LOAN FOR MAXIMUM VALUE

by Nationwide Secured Capital

Once you have sold the property, and created your note and are collecting loan payments – there are some very important ways that you will keep your loan at maximum value.

A partial list is –

  1. Keep the original loan documents – particularly the original promissory note – in a safe and secure location like a bank deposit box
  2. Monitor tax payments
  3. Monitor insurance coverage on the property
  4. Keep careful records of payments and deposit to bank account.

You can obtain a complete list of ways to maintain your Note at maximum value in a complimentary copy of “The Note Holder’s Handbook” available from Nationwide Secured Capital – order at: www.NationwideSecuredCapital.com/notevalue.cfm
and you will receive a comprehensive guide – AT NO COST- with the most important steps you can take to protect the value of your note – steps that will maintain your loan at peak value for yourself, and in case you ever decide to sell your note.

Related Articles

 

HOW TO DOCUMENT YOUR NOTE AND LOAN FOR MAXIMUM VALUE

by Nationwide Secured Capital

Once you and your buyer have agreed on terms for the loan, it needs to be documented properly and legally as part of the sale of your property.
New federal loan regulations known as Dodd-Frank began in 2014 and requires that you make a good-faith effort to confirm that the borrower can afford to pay back the loan you are giving them. The best way to do this is by requiring your borrower to fill completely out a 1003 Loan Application – just like a bank would do. They must list ALL of their debts and income, and assets – in general, the total of their monthly payments for all debts (including this new mortgage) should be less than 40% of their monthly income.

If you have specified a balloon in your loan terms, it is also very important to review their assets and their credit, to assure that borrower has sufficient assets to pay the balloon when it comes due (e.g. they have another house they are selling which has sufficient equity to pay off your loan) OR their credit history is strong enough to expect that they can refinance the balloon balance by the time it comes due.

The easiest way to make sure you have complied with these new federal loan regulations is to use a Licensed Mortgage Originator in the area of the property. Failure to comply with the regulations and to obtain income, asset and debt information from your borrower creates risk and reduces the value of your loan.

If you are transferring the Deed for property – you MUST insist on a promissory note AND a proper security document (Deed of Trust is preferable, or Mortgage is required in some states) – with a lender’s title insurance policy that insures that title has been completely and properly transferred to the new owner. The security document must be recorded during the sale and transfer of the property.

If your are keeping the Deed for the property until the borrower has paid off the loan, this is known as a Contract for Deed, Real Estate Contract or Land Contract. There are some advantages to this structure for you as a seller in case the loan is not paid – but these are considerably harder to sell and value is less than a conventional property loan – and are now illegal or cannot receive title insurance in some states. A title company in the area of the property can advise you.

It is generally advisable to have a promissory note signed along with the contract (And the contract should be recorded) and to also complete the title search, and obtain lender’s title insurance- this assures that you can properly and legally transfer the property to the buyer when their loan is paid off.

The Promissory Note is a critical document. It should state all of the following:

  • Payee – who is making the loan and will receive the payments
  • Maker(s) – persons responsible for making the payments
  • Interest Rate
  • Date on which interest begins
  • Frequency of Payments
  • Amount of each payment
  • Date when first payment is due
  • Maturity date (or Balloon Date)
  • Grace period – when is payment late, and late fee due – amount of fee
  • Default Rate – if payments are not made, and a default is declared, what Interest Rate will be charged (if not the original rate)
  • Reference to the type of security document that secures repayment of the loan

The Security document (Deed of Trust, Mortgage, or Contract) is the second critical document for your loan that pledges the property as collateral that can be foreclosed in case of non-payment of the loan. This is a lengthier document that spells out the other obligations of the loan, and what happens in case of non-payment. Some states also commonly use a “short form” deed of trust that references the long document with all the general provisions that was recorded previously and can be used in all loans and incorporated by reference. It is very important that the Security document is thorough and complete. Some frequent areas of mistake that should be checked are:

  • Reference to the Promissory note and date
  • Correct and complete identification of the property securing the Note
  • Correct identification of the Mortgagor (the buyer paying the loan)
  • Correct identification of the Mortgagee (the seller giving the loan)
  • Requirement for Buyer to make payments prescribed under the note, and pay taxes and insurance, and to name you as lien holder on the insurance for the property
  • Requirement for Buyer to pay all amounts due that are necessary to protect the property against other liens that can come ahead of the loan (e.g. assessments, condo fees, association dues in some locations)
  • Property Insurance Naming you as the Lien holder/Mortgagee – this is a VERY important part of the loan package that is often overlooked – and protects you and assures you will receive full value for the loan you gave borrower to buy your property. If the buildings burn down — and your are not named as Lien holder, on their insurance coverage — the borrower can receive the insurance payment directly and can walk away from the property and your loan — all you receive is the empty land/ compromised building.

You must also be named on the policy with your CURRENT notification address in order to receive notice of any non-renewal of the policy. If the borrower drops his insurance, and the property burns down, you have even less possibility to be paid off for your loan. If he borrower changes insurance companies, you also need to be notified of the lapse of old policy so you can require them to provide you a copy of the new insurance – and again you make sure that you are named as Lien holder.
While you can save a few dollars and “do it yourself” for these necessary documents, there is usually a considerable sum of money you are owed, and having the loan documents done right by a title company or attorney with all the provisions above, and more, protects you and is highly recommended. Having experts assist with the loan documents can avoid a number of pitfalls — some may be impossible to fix later — if you or your buyer are the ones who draft the documentation for the loan.

 

Related Articles

 

NSC BUYS MORE! SELL YOUR NOTE CASE STUDY #1

by Nationwide Secured Capital

NSC Buys Note Others Would Not — Saves Dad’s Home!

A.C.  came to Nationwide Secured Capital (NSC)  with a note that he had created on sale of  a commercial property in Houston for property that  he had previously  owned with his father.   His father had now fallen badly behind on payments on his home, and A.C.  wanted to  sell their mortgage note in order to keep his father in his home.

The note had several challenges,  that only an experienced company like Nationwide with the right experts can handle and address.

  1.  3 other companies made higher offers, then canceled their purchases with A.C . because the loan balance was higher than the current low value of the property – the loan was badly “underwater”. Where other companies canceled – NSC buys more, based on a careful look at the property and borrower.
  2. additionally, there were serious title issues – the property had been subdivided from an adjacent property many years ago, necessitating  an easement to the adjacent property for encroachment on to this property of a building —   upon insistence of the title company doing a closing statement for sale of the property the settlement included the address of the adjacent property that was not part of the sale.   As a result, conflicting parcel ids and legal descriptions surfaced during title search (which had caused another company to cancel their offer. ) NSC buys more with title experts were able to understand, research and resolve these issues.
  3. finally ,  the  buyer/borrower spoke only Spanish, was a cash payer who had absolutely NO credit and no  scores with the credit bureaus,  and he  had outstanding delinquent taxes due on the property. While most note investors require satisfactory credit history and  all taxes paid at time of purchase, NSC buys more – based on a careful look at the property and borrower, with fewer requirements like these.

NSC did its homework front, as it always does, and advised A.C. on these issues with his note and made offers that they knew could close –  he and his father pursued other higher offers which were “quick quote”  offers to buy the whole note that NSC advised could not pass underwriting and would not close for this note.  Once those other offers lowered, lowered again, and then  failed and canceled – there was very little time left to save his father’s home – Fortunately,  NSC was able to address the all issues of the note and delivered the cash he needed in time to save his father’s home.

NSC expertise an end investor with in-house underwriters was key to providing a reliable offer and then clearing the issues to close this purchase with cash to A.C.

NSC BUYS MORE than other investors – and  routinely provides cash out solutions for “underwater” and “low credit”  loans that other investors will not buy, to noteholders who need to sell the mortgage note to pull cash for another investment or important personal need like A.C.

NSC underwriting researched and resolved the title issues and past errors.  NSC has spanish speakers on staff,  and worked with the buyer and seller to get the tax issues cleared and transfer of the loan with minimum confusion for the buyer –  and urgently needed cash to the seller, A.C.  – resulting yet another 5 Star Review for NSC from this seller.

“Thanks to Nationwide Secured Capital, they helped me keep my father in his home.  They were very helpful, worked with me, explained everything that I didn’t understand, and as quickly as possible, when I didn’t have any other way to get some money.  They were there to help – I am VERY GRATEFUL to the people of Nationwide!”

“Gene was there for me through thick and thin…I could not have asked for anyone better…he’s a really good guy. Great job.” [NSC was] honest, straightforward, gave me great advice, straight up, didn’t lie like the other person I was working with prior.  …. Thank you…I appreciate everything you did, and mostly your patience – I know it wasn’t easy. You pulled through [for me].

THANK YOU FROM

A.C.,  HOUSTON TX”

Get a Note Quote Here