All Forum Posts by: Mike Hartzog

@Jay Hinrichs  Yeah I have seen some crazy stuff too.  People living in properties when the utilities are turned off with drug usage evident.  Interiors in unbelievable condition.  Any time the borrowers reject all attempts to contact and make no attempt to stall or prevent a foreclosure action is a clear sign to me that the property has real issues.

@Jay Hinrichs I fully agree.  Lots of folks overpaying for notes right now, not appreciating the collateral value risk.  It's a sellers market for notes, and we are at or near the top of the real estate market as well.  In addition, I have never been favorably surprised by the interior condition of a property I have taken back.  I'm sure it happens, but so far it has not happened for me.

My bar is 60K, with the caveat that I am looking at the overall market population and not just the city population.  Many cities are actually submarkets for other larger cities and their populations are thereby connected.  As an example, take a look on Google Earth at all of the smaller cities which are included in the Chicago metro area.  The same is true for any major city in the US.

@Roman M.  It's great that you are able to find and purchase notes in your area.  Florida has been a great market over the past few years with significant note inventory.  @Bob Malecki and I are out of luck for the most part finding notes in our area.  The strategy in that case is to develop strong teams in a handful of markets and purchase notes in those markets.  That's not as good as being there yourself, but it's workable.

I have purchased a lot of good assets in OH, however, I am in the process of taking it on the chin on one of them. I don't think one can play this game without an occasional loss as we are dealing with some unknowns, primarily collateral condition, and that is the reason we can buy them at a significant discount to value/UPB. As long as the wins greatly outnumber the losses, it's just a cost of doing business.

I am with Adam on this one.  We store our hard copy loan documents at our offices in our own fireproof safe.  This approach is very convenient for obvious reasons.  When the goal is to protect and preserve the original documents, shipping them back and forth carries risk of loss as well, as does putting them in the hands of a 3rd party.  In my view, these risks exceed the risk of damage or loss via fire, flood, or theft at our offices.

Scott nailed it.  As Andreas mentioned, it's good policy to outsource your debt collection activities to licensed 3rd parties to reduce risk and stay compliant with rules and regs.

@Linda Hastings  Good questions.  When a loan is transferred to a new lender, even if between two entities owned by the same individual or group, a TILA letter is required to inform the borrower of the change.  The servicer can prepare and send for a fee or the lender can handle it themselves. 

There is no change of servicer in the scenario described by the OP but if there was, a Goodbye letter from the old servicer must be sent and a Hello letter from the new servicer must be sent.  When transferring loan servicing, I let the servicers do their thing but request scans of the letters so I have them in the file.

An attorney is not required but one can be used if you don't mind the additional cost.  There is no magic involved here. As Andreas indicated, you can use the assignment and allonge documents used for the transfer from seller to your entity as a template.  Replace the specifics as appropriate.

Most title companies can deal with doc prep on the note and security instrument.  I agree with Adam on the professional servicing and escrow for T&I.  If you want to get cashed out prior to 30 years, you can put in a balloon payment, forcing a refinance at say 5 or 10 years.