All Forum Posts by: Robert H.

@Steve Babiak 

I need to read this sentence in the context in order to comment, but I can not find anything like this on the site. 

@Robert H. 

can you provide the link to the page where you reading this language? 

Here are the details you are asking for-

By shame on me I mean with a little more digging I would have seen more red flags in the borrower rather than being more weighted in analyzing the value of the property and  LTV ratio.  

This is a new private loan set up through a broker that the borrower took out to pay off an existing tax lien and was supposedly going to use the rest of the funds to make improvements to the property.  As far as I know it was a house that was inherited.

Part of the instructions that the broker sent out asked that the borrower contact me by phone for further payment instructions as it was information I did not want to send through mail.   After the payment due date passed I never heard from him so I tried contacting him and found that his number had gone out of service.    I was aware of the 10 day grace period but also aware that he would not be able to make his first payment until I talked with him.


Originally posted by @Dion DePaoli:

Robert, 

The story here is a little confusing and missing some background details.  Mike is right, you really should board this loan with a servicer.  That said, since we are here, let's sort out some of this better for your understanding.  

There is a mention of shame on you for not doing due diligence, not sure what you are really meaning there.  It is difficult to tell how new or seasoned the loan is and how the loan was performing prior to your purchase.  You use the word "first" payment, which I am inclined to think you mean the first payment to you as opposed to his first scheduled loan payment (also meaning the loan was just made).

The Borrower's delinquency for the account, not just your ownership period is really what we should be talking about.  A Borrower's payment is usually given a grace period of 10 to 15 days past the payment due date each month.  A Borrower's payment is not "missed" unless a payment is not received and the period is over, the period must lapse to miss it.  Mortgage payments are not like rent.  If the Borrower is only 2 weeks delinquent on the account, I suggest you slow down a little bit.  As a Mortgagee you can't be hassling (yes hassling) him for payment at such a early time in his tardiness.  A loan is not considered in default until after 90 days past due.  That doesn't mean you can not actively manage, it just means from 0 to 90 days past due you should be mindful in the manner in which you treat the delinquency and borrower.  A Mortgagee can be too aggressive and step over the allowed collection activities which in turn can afford the Borrower some defenses to enforcement of the loan.

The context here to what the rest of the account looks like is missing.  A part of me reads what was posted and believes you are talking about a loan that at the time of your purchase was current and paid on time.  If that is the case, like I said, slow down a little bit.  Not sure what you put in your certified letter but you can not treat him like he is defaulted.  He has not. 

However, if this loan is defaulted, then the picture changes and you should be doing other steps above simply sending the letter and calling.  Defaulted borrowers tend to miss insurance and tax payments and the Mortgagee may need to advance for such things.  A defaulted loan changes the approach you should have and you have to be careful you are not dual tracking the Borrower.  If you purchased a defaulted loan, is/was the loan already in a foreclosure or forbearance?  

I have concerns about a guy living in Idaho buying investment property in California.  I notate the story may not have illustrated how that all came to be in real life but that is not a common way for that loan to be made.  Folks in California may have investment property in Idaho usually because it's less capital intense in Idaho opposed to California.  For some reason, the general details about the loan and the borrower whereabouts and contact information have me concerned about the Seller and origination of this loan. 

If you post some more details we can give you some more feedback.

I used to know of a turnkey company out of...somewhere near Ft. Myers? No idea if they are still in business but I could ask.

The hard part about FL is the property taxes and insurance are typically so high, it tends to knock out any profit potential. Hence why there aren't more turnkey providers down there.

Whatever you do, don't get duped by Lehigh Acres though, I know that.