All Forum Posts by: Account Closed

This is getting absolutely ridiculous. Here is a quote straight from a well known servicer. I assume you trust well known servicers right? Deleting the numbers in case they are part of NDA.

The italics below are mine.

"·Specialty Loan Servicing Full Collection program for non performing Loan workouts, and High Touch servicing for performing and modified Loans

·Specialty Loan Servicing No Collection program for non performing Loans , is an offsite program where X is the required compliant Servicer of Record, and the Lender pursues their own workouts. It is the Lender’s responsibility to be aware of related State/Federal regulations, and have their own Liability Insurance."

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Wait, am I reading correctly? Do they specifically say LENDER PURSUES THEIR OWN WORKOUT?

At this point I believe there is nothing left to say. I would double check the advice of people who tell you it is okay to contact the borrower before buying the note and funding it.

What I dislike is forum warriors who like to take a few sentences out of context and base their entire argument around it. And even go so far as to defame others based on it.

The argument was about foreclosing and managing the process yourself, as opposed to having the servicer do it. You might want to try it, it works fine.

Nice try construing that to mean don't use loan servicers. I did reread my first post and I can see where it might have been confusing, but I very clearly defined it over the next messages.

"What fund? Are you saying that some fund advocates NOT using a loan servicer?"

I can't speak for them but some have said they don't use the servicers' full collection tier of service while it's being foreclosed. Please feel free to pick apart this message and twist what I'm saying.

Most sellers make you sign an NDA that specifically mentions not to contact the borrower.

One of the issues we're having in this section of the forum is that notes are very broad and everyone is doing something different. If you're buying a seller financed note it's different than buying institutional notes. Hard to sort out who is talking about what.

Pick a niche and read about that. The processes are different and will vary based on what you're doing.

Dion there is no denying you know a lot. Same for Bill. But your answers always seem to put an entire industry in one single category. And in this case I'm not even sure we're talking about the same thing.

Are you saying there is an advantage for you to foreclose through a servicer, rather than calling the attorney and starting the process yourself? I've compared the rates and didn't feel like it made any sense monetarily to let the servicer do it. I'm not a representative for the industry, but that is what I have been told by others as well. That's the only point I was trying to make, and I genuinely believe it to be true.

My own experience, limited as it may be as you like to point out, has been to handle the process ourselves and it has gone well. In fact, up to this point, we haven't had a single foreclosure attorney ask us who the servicer was. Again, personal experience speaking.

I'll be sure to report here when a problem arises.

If that's the case, please explain why some of these Wall St funds specifically, openly contradict what you just said? I didn't pull this out of my ***, pardon the language.

Being a know-it-all, you should know how everyone operates so please enlighten us.

PS: I only "give advice" based on my own experience and well known facts. As with anything else, I do not claim to provide legal advice, business advice, tax advice, etc. Please use appropriate counsel when required and do not build your business around forum posts answers. Thank you. This disclaimer was brought to you by Patrick and common sense.

That's what we've been doing because when the loan is delinquent you're not getting payments. And it's what a lot of people were doing, but take it with a grain of salt because with the new regulations a lot is changing and it can be wise to send it straight to a licensed servicer.

What I was trying to say is that servicers have different levels of service (ie collection / no collection) and that collection is more expensive. You don't want to pay $85 a month for collection servicing while the house is in foreclosure and there is nothing to do but wait.

You could put it under $15/mo no collection servicing and be on the safe side.

That's just my opinion and should not be interpreted as legal advice, business advice etc.

I understand your position but I feel like you have more upside and less downside with 2nds. No wrong answer, just different business models.

Why do you feel that way?

Hey @Rick Lin,

You understand the general concept and that's great.

A few notes (no pun intended):

- If you want to start with 1sts, I would partner up with one of the newbie-friendly funds that show up at the various conventions. You get to see what they do and why, but you have skin in the game so it's a real learning experience and not just "one more course".

Since you mention being risk averse, that gives you a sense of security. Some companies even give you preferred position (meaning you get paid before they do).

Their goal is to "lure" you into 1sts so that once you've done one or two joint ventures you buy from them. They know most people have trouble getting started.

- You could also start with 2nds, which have a much lower entry point and thus less downside (while usually having more upside potential). That is what we've done and honestly, you can buy a 2nd with a ton of equity (and current on the 1st) for half of what you would pay a 1st.

- There aren't that many BIG secrets that I've seen. It's more a lot of state-specific technicalities. It's super important to rely on local attorneys that know that state's laws and procedures. You also have to have a basic understanding of what you need to invest in the different states but you really only need to know one.

- This is subject to a lot of debate but many argue that you shouldn't put 1sts with a servicer while it's delinquent, since you're going to send it all to an attorney to start the foreclosure process / do all the work. The servicer will collect while doing nothing. On the other hand if you do get a loan mod then definitively put it with a servicer.

I'm not an expert and don't play one on TV but if you want to talk more, add me as colleague.

It's not so much that they are negative about notes themselves, it's that they discourage newcomers from ever getting in the game. No need to name names. Some here try to convince you that the Feds are going to come kick your door down and drag you away screaming if you buy a NPN.

My message is get educated then take action. Don't let the naysayers convince you it's too risky or "dangerous".

Now don't get me wrong, I'm not saying you should buy a NPN without knowing the basics. But it's not any more complicated than doing rehabs, which you've done. The first few you did, you didn't know everything there is to know, yet you're still here thriving.