All Forum Posts by: Paul Birkett

ok great work..... so here are some next steps:

1. Take the address and look up the taxes at the county to find out who the owner is

2. Go online and try to find the owner

See what other information you can find about the foreclosure and if you can do a short sale with the owner's help

good luck!

Paul

I'm with @Wayne Brooks on this one...

1. The Carolinas have particularly complicated laws regarding probate - which probably explains the 6 year delay.

2. The taxes will always be paid first. If nobody bids and it doesn't sell then the county will be stuck with a zombie property. You may be able to pick it up after the sale at a discount but dont bank on it. The FC sale usually wipes out all the other liens...but you should most certainly check that. 

3. Id call the county treasurer and ask them to walk you through the process (how the sale works, redeption rights, what happens if it doesn't sell etc etc). I have never heard of anyone getting in before the sale to get a property. That's simply not how the process works

good luck!

Paul

The challenge we find with buying direct is that many banks simply cannot sell to an unknown counterparty and not in sub $5m deals. They are worried about how the loan will be handled especially if its a low-value home housing a vulnerable borrower.

So most institutions prefer to package up the loans and sell them to another bank or non-bank mortgage specialist. Some regional banks may sell one-off deals but we have not had much luck with that. I think we have bought fewer than 10 loans that way. I agree with @Bob Malecki  - build relationships with asset mangers and grow over time. 

Out of 100 calls received as an asset manager, you may close 20 deals. The asset manger wants to see you succeed but he cant tell if you are real or not until you have actually bought something. it won't happen over night but it will happen if you persist.

Lastly, its better not to bid at all then to send in a low-ball - especially when you are trying to build deal-flow. That just wastes everybody's time and makes you look unprofessional.

I have sold assets to buyers we found on LoanMLS. It started as a one-off deal and now they are buying most of the notes we pick up in TX, Ohio and a couple of other states.

In summary - persistence in the relationship building process will pay dividends

good luck

Paul 

I only know the market through the note business. We don't buy the actual home, we buy the note and work with the homeowner to get them paying again or acquire the property through foreclosure.

if we end up with the property, its at 30% below market. .... so there is a margin built in at purchase. I would move very carefully if you plan on buying the actual RE. I would look at 100 properties before I bought one - really. Its just so easy to end up in Losstown when you rush into a truly difficult market without all the expertise you'll need

Fellow Note Investors,

I'm delighted to announce our 3rd sale of the year. A pool of 100 unworked, non-performing second liens with a total UPB of ~$5m. The tape will be available later today and we will accept bids up until next Monday 11th at 6pm Eastern. We will accept bids on an asset-by-asset basis. 

The collateral is in-house and will be shipped to you on closing.

Please head on over to www.automationfinance.com and register your interest on the sales desk tab. You will need to sign our NDA and we will supply the tape of assets.

Happy bidding!

Automation Finance Sales Desk

Claudia. You need to do your own research. There are some short cuts in this business...  and they all lead to the same place: Losstown 

...and Georgia is a quick foreclosure state so you should consider finding inventory through buying defaulted notes.

Claudia, Newark is a block-by-block city. Take a look on zillow and compare the sold prices on any block. You will see a range from $20,000 to $100,000.

Im not saying that Newark is a bad place to invest - we own a lot of notes in that area. You need to know exactly what you are doing. Its a very easy place to make a terrible mistake. Spend a few weeks looking at 100 properties before you buy anything.

When you are an expert - you are ready!

good luck

Paul

Hi Roland,

We are a regular buyer of notes. We buy first and second position notes nationwide. The value of a note is determined by three key metrics:

1. The cashflows the note will produce over its remaining term

2. The value of the underlying collateral

3. The pay history of the note.

In very round numbers: A $1m UPB with an interest rate of 6% secured on a $2m CA asset with a spotless pay history will sell for 90%+ of face value. On the other hand a $30k note with a 7% interest rate secured on a $25k MI asset with a rolling 90-day late pay-history will sell for 40% of asset value (or thereabouts).

Feel free to send me over whatever you have for sale

many thanks 

Paul

Hi Jason

The collateral review falls into two parts:

Must Have: 

The Note - signed by the borrower(s), dated the same as the mortgage - all pages no missing data (origination date, pay-off date, interest rate, monthly P&I)

The Mortgage (or DOT) - signed by the borrowers, dated same as note

Assignment chain - can you follow the chain of ownership from the origination to today (if not, what assignments are missing)?

Alonge - transferring the ownership of the mortgage alongside the note. 

Your custodian or document remediation service will fix and gaps (but absolutely must have the note and mortgage (or a copy note and lost note affidavit).

Nice to have: All the origination documents. Application form, back-up file etc This is often called the working file.

Some people shred them but they can be worth their weight in gold. We recently had a borrower claim that his identity was stolen back in 2008 when the loan was originated. Our team was able to dig through the working file and find the copy driving license and passport from the application. Case closed

You will also find original title policies, 1003 application and a lot of borrower disclosures that will help you build a comprehensive picture of the borrower, his career and his ability to pay.

Good luck with notes 2-10!