Note Pricing has gone up….BUT

[Martin Saenz]

The pricing for non-performing notes has increased the last few years, but I’ve still been steady buying because:

1) When you buy from sellers you have relationships with, there will always be inventory that makes sense.

2) I buy based on the borrower's ability to pay versus a focus on the property's FMV, so pricing has increased but so have the borrower's ability to pay in certain cases.

3) Pricing has gone up but so has FMV's around the country if you have to take back a property.

4) Last point is that there will always be sellers looking to liquidate their portfolio for whatever reason and folks, like myself, will be there to help this occur.

It feels like we are at a point when players are jumping out of the market due to lack of inventory. Good for the folks still in the mix, and I do encourage the newer folks to embrace the industry as it can change your life if you commit.

[Bob Malecki]

From what I've seen some of the new players are fix 'n flip refugees who are looking to buy the home at a large discount since they can't find decent yield in their traditional venues like REO purchases and FC auctions. Their exit is diametrically opposed to our desired exit to keep the borrower in the home and realize our profit from the P&I cash flow. Its a result from the acceleration of home appreciation and shrinking inventories of product for the traditional residential investors.