Buying Notes.....screening a potential company

[Patrick Sherwood]

Has anyone ever done business with Azevo, Inc? Any information is appreciated. They help investors purchase notes. My friend is looking to invest some money with them and I might do the same if I can vet them properly. I've been searching online but I'm curious if any BP members have input. Thanks everyone!

Pat

Here is the link to their webiste...

http://azevoinc.com/

[Bill Gulley]

Well, Steve isn't as cynical as I am I'd bet. :)

First, I wouldn't begin to do business over the internet, I'd be on the phone doing due diligence and if they can't send me the requested information, they are probably a no go.

*Names and resumes of officers and directors, broker # and states authorized to do business in.

*Certified copy of last annual financial report, if incorporated or balance sheet of entities. 

*Number and total amount of loans serviced and held. This is for compliance assessments.

*Copy of note purchase agreement, assignment and transfer notices required. What is the due diligence period prior to settlement?

Do they originate loans? If so, what type and where? How many last year, year to date?

*What guarantees do they give, as to serving, notice given as required, their compliance to date?

*Do they have the original note and security agreement with all attachments?

Is there lender's title insurance assigned or available?

Is there an appraisal of collateral available for review?

What do the loan packages generally contain, especially closing and servicing records?

*Is there any release of liability during their holding period, if there is that's a no go.

*Do they guarantee that notes are in compliance with applicable laws, closed and security perfected?

Now, do they have the ability to repurchase a note, you might have to sue them, but can they even cover their portfolio. You can check on licensing and state reserve requirements.   

Those points with an * are critical and can be a no go, further investigation would be required.

I need to see a company in business for at least 10 years, no newbies, no investor based brokers having to fund purchases through a possible ponzi scheme, if they can't find a buyer you can be stuck.

Audit a file before you buy it!

Brokers don't want you contacting a borrower, or note holder, for good reason, but I'd forget their reason under a commitment as now you'll have the right to audit, communication will be a very delicate matter too. Be careful.

Then, you can look for judgments and legal actions against the company and officers and directors, just because they were sued, don't run, it depends on why and their size, large banks are in courts daily. You are not privy to financial examinations but you are to violations sanctioned, some can be minor, others indicate poor management and operations. 

Then make the call. Go through this and find exceptional companies to deal with, just buying something waved in your face isn't good business. 

Good luck :)