All Forum Posts by: Andy Mirza

@Christina Colon Most of the posts regarding sub2 are from buyers wanting to do this. Usually not sellers. It's one thing if it's 100% seller financing but this would be a combination of seller financing and a loan in your name.

For me personally, I don't like the idea of giving away that much control to someone else. Your tenants are great now but what happens if they come upon hard times and can't pay the mortgage? Then, you're stuck making the payments while they live in your ex-house.

In my opinion: if they want to be homeowners, they need to take care of their credit so they can get a new loan in their own name.

In this situation, I'm the borrower. My partner and I have a blanket loan on 14 condos with a payoff of less than $1 Million. So, this is a commercial loan.

About a year ago, the servicer wanted $150 just to provide a payoff statement whether we paid the loan off or not. We didn't feel like spending the money at the time but considered it reasonable if we actually went through with it.

Same loan is coming due now so we are refinancing. This same servicer has raised their fees as of 1/1/22. They are asking us to approve $1500 (fifteen hundred) to provide a payoff statement. We think that's way too much and are refusing to pay it.

Is that a normal price in the commercial loan servicing world? Seems ridiculous to me. It's an interest only loan with a couple of escrow accounts. Simple and easy to do.

Not sure what kind of workarounds we can do since our loan was securitized into CMBS and they seem to be pretty strict and not able to work "outside of the box."

We had an unexpected reinstatement come in from one of our delinquent borrowers. Good news is that we got a decent chunk of money that really puts us in a good position on this loan going forward. Bad news is our loan servicer included our 2021 attorney invoices but didn't have the ones from 2019 or 2020. The reinstatement quote should have been higher. This was not the loan servicer's fault as they sent the reinstatement quote to me for approval.

Lesson learned: have systems in place to make sure that your recoverable invoices are regularly forwarded to your loan servicer. This loan was underwater and the borrower had a poor pay history. I never thought this person would reinstate but it happened. Don't miss out on your recoverable costs!

We use CSC. 

I think if you're recording more than 5 docs a year, it's cost effective.

If you send docs by FedEx, you're saving $20 each time in shipping fees, which just about covers the yearly fee. If you send by regular mail, you run the risk of your document getting lost. Then, you lose more time getting the problem fixed, which might include going back to your seller to get your document re-done.

Using an e-recording services save you money (no shipping charges) and time (shipping time plus so much quicker & easier to fix mistakes). Worth way more to me than what it costs.

On the NPNs that we've bought, some had PMI (Private Mortgage Insurance) at one time but these policies lapsed because the borrowers went delinquent and previous lenders failed to keep paying the premiums.

We purchased one recently, however, where the lender was advancing the premiums. I want to make sure that the policy stays in effect so I can put in a claim, if necessary. The property might be worth more than the insured amount but I want to be able to recover the full amount.

I got off the phone with MI company and it seems that I need wait for this loan to fully board & talk to my servicer about making the payments from the escrow account. Once we foreclose, I can then put in a claim for the insured amount.

Anybody have experiences with this that they can share?

@Jasmine Willois Are you referring to a previous lender who goes out of business and there's no one left to execute documents for you, as the end buyer of a loan that they once owned?

If so, I'd be interested in the same answer.

In one of our cases, the lender went out of business but was bought by someone else and that entity was able to execute docs on their behalf.

In another situation, we ran into a dead end because we could never find someone who was authorized to execute docs and the defunct entity's behalf.

@Joe Daigle Sending the original note by US Mail? Scary! Also, unprofessional, either ignorance or trying to save a few bucks when you really shouldn't. The chances of losing something in the US Mail are low on average but the consequences can be quite expensive.

The seller would be on the hook for refunding the purchase price if that package didn't make it.

We always use FedEx or UPS to deliver originals. I've had quite a few things lost in the mail that it's not worth the risk. We have our own account with FedEx so we can print out our shipping labels. I mostly use 2 day save shipping to save on costs. It's reasonable for docs that don't have urgency but I still get the tracking and security that my package will get there.

@James Park I don't like the part of the scenario where you have to educate your lender. That's lazy to me (or a clear indicator that he isn't motivated enough to do your deal) and leaves you open in case something goes wrong. If something goes wrong, is he going to blame you for not informing him about something specific to Indiana that you may have missed?

Why not let this guy be your CA lender and you find someone else for Indiana? At a minimum, this gives you some more flexibility. Vendors come and go and it's nice to have ready options in case one drops out and you need to find another one in a pinch.

We're doing a refinance of some rentals with Corevest. They lend on rental portfolios.

I've also borrowed from Groundfloor but it's been a a year or two. If you're not pressed for time and are patient, you can get some pretty low rates from them.

There are tons of other lenders out there that would be happy to lend in Indiana, know that market, and won't require you to educate them.

Yes, you are correct. We will always try to work something out with a borrower when they meet us halfway, however, that doesn't happen very often. When it does, we're happy to sell it as a re-performer when the numbers make sense.

One of the risks though is when a loan goes sub-performing and you can't get pricing from either performing or NPN buyers because the note is neither one. If you buy for more than UPB you're stuck holding it until the numbers come your way.