Many times the seller of the note will provide collateral files that may have some borrower info, and we also research social media, PACER for bankruptcy, and any sources for criminal records to develop as much info that we can to underwrite a NPL. 

The borrower is on the verge of bankruptcy and has missed payments. 

The borrower is on the verge of bankruptcy and has missed payments.

Some people make it start to finish in three months while others with recent bankruptcies or foreclosures can take two years. 

I wouldn't do it again but I didn't loose the house or file bankruptcy either. 

This is what we look for regarding credit history.FINANCIAL/CREDIT HISTORY1.No outstanding debt to previous rental property owners.2.No outstanding debt to utility companies.3.No outstanding debt in excess of $1000 that is not in a payment plan.4.No excessive monthly financial obligations - more than 20% of income.5.Lack of credit history or marginal credit history may result in additional security deposit. 6.Derogatory credit (past due accounts, collections, charge off accounts, tax liens, judgements in excess of $1000 and/or bankruptcy) may result in additional security deposit or denial.

(True story, google “CNBC Harrisburg City Bankruptcy” for the footage).In reality, South Central PA, not to be confused with plain ole South Central, is not a bad place to live.

Of course if they don't it's a new ball game.In my recent issue, I had a wonderful home, and good people that simply had problems in the past (some judgements and a bankruptcy)...  

Every state has some built-in bankruptcy protections for some of your assets so that you're not out on the street.

Dan, I have a great relationship with the seller and may be able to avoid bankruptcy financing with an owner financing options and more favorable terms.