Mortgage Note Sellers #1 Question

Why Must I take a Discount? Why Can't I Sell for Full Face Value?

The burning question every note seller wants to know!!

The answer is simple--RISK

The person wanting to buy your note is actually buying your risk. The same risk you took on when you loaned--by carrying financing you are in essence making a loan--your buyer the money to purchase your property or business. The risk that they could at anytime--especially in today's economic climate--default on their payments.

Therefore when a potential buyer of your mortgage note does their evaluation of the note to determine a purchase price, what do think they are evaluating? That's right--the Risk Factor.

There are many variables that determine the risk factor of a note--payers credit score, payment history, seasoning, loan to value (LTV), just to name a few. The lower the risk factor of each and every variable, the more money your potential buyer might be willing to pay you for your note. Conversely the more risk factors that carry high risk your note has, the bigger the discount you are going to receive.

There was a day when a high quality note could bring you more than a 90% purchase offer, but with today's economy in turmoil that same note is lucky to see offers in the mid 80 percentile. That's just the way it is today and you can expect this to remain the norm until the economy as a whole begins to make a recovery.

As a mortgage note holder--no matter how long you have been one--you surely can understand the risk factor involved, and therefore must also understand the potential buyer of your notes' requirement for a built in security factor--in the form of cash discount. Should the payer of your note ever default on the new buyer they must have the built security of the discount you were given to prevent them from losing their shorts. They are still likely to take a loss but it may not hurt as much.

So rather than asking the broad brush question of why you must take a discount, try refining your question to, why must I take this much of discount? You'll find this question will bring you more clarity as to the valuation of your note and help you understand why such a discount is required.

Of course you can always shop around, but you will likely find all offers to be "very similar" as all note investors use the same basic criteria to evaluate a note.

Call today for a fast, Free Evaluation on today's current market value of Your mortgage note.

Quick note: Al Capone's Vault type of story

I know this is completely unrelated but it's an interesting story that has peaked my interest and if you have any interest in casinos, mobsters, or just a plain ole good mystery then I think you'll enjoy this story too. http://bit.ly/ndglY6
Maybe you'll find yourself following up later to see what they find, as I will.

I hope it's filled with old mortgage notes they call and sell to me!!

Seller Financing Sells More Property

Today's world can be a financial nightmare, especially if you are trying to get financing or your buyer is trying to get financing.

The lending standards have been tightened to the point where over 20% of all financing applicants are rejected. Many of whom are actually Good prospects but for some small reason cannot get approval from the traditional lending institutions. Many of these people have good credit scores, many can have large sums of cash for down payments, most every single one of them are Hungry to Buy--if they could get financed.

What if you could get this extra 20% of buyers to pick up the phone and call you about buying your property? By adding 3 simple words to your advertising you can once again start the phone ringing. "Seller Financing Available" or " Owner Will Carry".

You can have qualified buyers eager to buy coming back for a second look with the addition of theses words.

At PSR Note-Ability we can help you structure a deal and create the note in such manner that you can realize even greater benefits than a traditionally financed sale can provide. visit www.promero.noteoffers.com/fsbo to learn more about how seller financing can help you sell your property faster than any other on the block.

To Sell a Note Later, First You Need to Create a "Good Note" Now

Understanding what a note buyer looks for when making a note purchase can help you create a note that will not leave you feeling violated by a buyers offer.

There was a time when mortgage note buyers would purchase just about anything that came across their desk--Of course that was when my dog could qualify for a loan and buy a house.

In today's economic times this just like all things real estate has changed. If you intend on carrying paper on a property sale and are planning to later sell that note, you had better have at least some understanding of what a buyer will be looking for, and a general idea of how much discount you can expect to take. Otherwise you may end up like Many I've seen in the past few years, with a note you either cannot even sell, or one that is so heavily discounted you cannot achieve the goals you have set. Thus forcing you to hold the note for a period of time much longer than you've anticipated.
While this may not have a huge effect on some, for those counting on that cash whether it be to move onto their next deal or any other need you may have, this can be a killer.
Here at PSR Note-Ability I am more than willing to assist you with everything from deal structure and note creation, right through to the actual sale of your note. That is what a "Full Service" mortgage note company can do for you.

The following are just a few key factors you need to consider that will play a huge role in the sale of any mortgage note:
Interest Rate
Seasoning--How long you hold your note prior to selling
Reverse seasoning--How long you owned the property prior to the sale of it
Terms of the note--Length of payment, Balloons, etc
Your buyers credit score
Size of the down payment

All of these things done right can dramatically increase the value of your note.
Conversely just "One" done wrong could greatly effect the value of your note, possibly even rendering it unsellable.

Bring us your questions and I personally will be happy to assist you in every way I can.
Don't get caught holding a bad note, because you weren't prepared from the start.

Assistance for Professionals

Many professionals from Legal, Financial, and Real Estate, to Bondsmen, Contractors, and Advisers may from time to time create a note in lieu of payment for services. Or the clients who come to them for their professional assistance may have mortgage notes they can use/sell to pay for their services. Other clients may have other issues with which you are assisting them with and have a need to raise quick capital to make a new investment, start a new business, or grow their current one--among many other possibilities.

As a professional in your specific field you may not have answers for your clients when they ask you about selling a mortgage or business note. Or you may not think to offer the possibility of selling one to a client in need of fast capital. Or you may have some of your own you wish to cash out. Either way you should not have to learn all about a completely unrelated field in order to fulfill your clients--or your own--special needs in that area--and you don't have to.

By incorporating the services of an experienced Note Service you can offer your clients all the additional assistance they need with a simple referral. Most note services will reciprocate these referrals both monetarily--if allowed--and with client referrals back to your business, creating a win/win...win--when considering the client as well--for all parties.

Visit our website at www.promero.noteoffers.com for more information on utilizing our note service to help you, help your clients by becoming a more valued resource.

Get to the good stuff

I seem to have gotten a bit off subject with this blog so I've made an executive decision.I'm going to devote this blog purely to information beneficial or entertaining for the Buyers and Sellers of privately held mortgage notes and trust deeds and for professionals such as CPA's Attorney's, Financial Planners, etc who have clients with buying and selling questions, concerns, needs, and desires.

I would like to direct all Real Estate Investors and Property Sellers--FSBO and Traditional--over to my Seller Financing blog at www.promero.noteoffers.com . I will keep the information on that blog specific to seller financing strategy and beneficial and entertaining information related to real estate in general.

I do encourage "Everyone" however to visit the promero.noteoffers.com website for in depth information specific to your situation and stature. I have fun here and there is interesting information but you can get a ton of area specific info at the website which will give you strong insight to whatever it is you are doing or thinking of doing in regards to Real Estate Notes.

As a special gift to all my visitors I would like to present you with the future of real estate buying, selling, and investing!

Would love to know what you think of this "Crazy" idea! or is it Crazy?

Villains and Victims—Roles Reversed for Economic Bullying

In a country full of bleeding hearts ready to rush to the aid of those who have been victimized in any way, shape, or form you wouldn’t think our government who also stands at the ready to aid victims would turn it’s back on it’s own people who have been victimized by greedy mega banks. Instead they rush to aid of the villains who have committed these atrocities against us handing them billions of dollars the victims—the American Public-- must now pay for.

The uber rich, the mega financial institutions devised a plan to fleece the American public with a brilliantly disguised, once in a lifetime opportunity for property ownership. They developed one new, more lenient mortgage package after another until your dog Fido could qualify for a mortgage loan with falsely stated income. They put people into properties they could never have afforded under traditional, financially responsible lending practices. They packaged these toxic loans and sold them of by the millions to unsuspecting investors under the guise of mega profits until they were using paper to pay for paper with nothing to actually secure the transactions but ink. Until it all finally blew up and the funds backing this paper had to be accounted for and it wasn’t there, because it never existed in the first place. Sounds very similar to a Ponzi scheme any villain would be investigated by the US Government Agencies and prosecuted for.

But no, our government instead makes these villains out to be the victims and runs to their aid handing out billions of dollars in bailout money so they won’t collapse. Supposedly to “save” the economy from a full scale melt down. Not to say this wasn’t one hundred percent incorrect but certainly over done by a large margin. Saving one or two of the most responsible and leaving the rest to suffer the consequences of their own design would probably have been enough to halt a full scale depression, while at the same time opening the doors for those whose creativity, conscious, and zeal this country was built upon, the American Entrepreneur.

Rather than letting the big dog bullies take their new place under the porch waiting for the scraps to fall between the cracks and allow the little guys with big ideas—and hopefully a conscious--to take the reins, our new government “Of the banks, By the Banks, and For the Banks”, runs out and buys them filet mignon to feed on. While at the same time sealing up all the cracks on the porch making the little guys struggle even further to make a meal.

Now as the Mega Banks cry about minimal profits due to the cost of doing “business as usual” in the mortgage/housing world and the American people—who have had their voice taken away—are struggling with the fallout of this debacle, the US Government is still worried the bullies will collapse. “Let them collapse” we shout upon deaf ears as even though the profits are minimal they are still coming in at our expense. The American public—the true victims in all this—are the ones who have suffered. Foreclosures, Bankruptcies, Debt Defaults, and Ruined Credit are the fate with we have been forced to figure out and overcome, all on our own.

Although false hope was given in the form of home saving “Loan Modification Programs” and the HUD backed Housing Council to assist those having difficulty the mega banks were not ‘forced’ to take part, and thusly were reluctant to the point of sabotage of these programs. The Loan Modification Programs could actually have worked if they were thought out better and not just implemented with the suggestion banks utilize this strategy, but mandated they MUST incorporate this strategy. However, even if mandated the loan modification programs were destined for failure under the limited guidelines incorporated into them. One major key factor was left out—Principal Reduction—and the only reason it was left out is because the Mega’s cried it would cost them too much and could lead to their demise (and we couldn’t let that happen now could we, they might not be able to drive their $100,000 cars to their multi million dollar jets and fly to an extraordinarily expensive dinner and lavishly extravagant night on the town in the most expensive city in the world, and then “we” would have feel bad for them)

Including Principal Reductions into every Loan Modification given would have caused the Mega’s to experience a smaller overall bottom line but, it would also have caused millions of American’s to not only be able to afford to, but actually want to keep their homes. An article in Real Estate Journal Online talks about B of A crying about only a 2 billion dollar profit because of their mortgage/housing department and how many Loan Modifications are back in default. Their answer, cut out thousands of jobs in this area. Another talks about the government cutting 88million from HUD forcing the closing of the Housing Council. Is this an admittance of failure for the vaunted Loan Modification Programs that were to be our saving grace? It’s more like another bonus for the bullies to be able to pull out completely, without ANY monitoring agency to not only watch what they do, but to assist those embattled with them. Once again giving them free rein over how the American public is treated, ignored, fleeced, and otherwise raped and pillaged.

Why is Principal Reduction the Missing Link to Success?

Most Loan Mods given out early on during the Mega’s reluctance phase were only designed as “Temporary” solutions with the back end—scheduled for the near, not far away future--only just slightly better then the front problems putting this mortgage in jeopardy in the first place. In other words the Mega’s were handing out nothing more than a delay of the inevitable, setting up the unsuspecting borrower for future failure, and postponing and drawing out for as long a possible any potential resolution or actual recovery for both the individual and the economy as a whole. Then later when reprimanded for their incompetence they began putting forth a more serious—“looking”—effort but still refused principle reductions. This has now lead to further price declines following massive foreclosures creating a massive inventory, thus attaching all those modified loans—effective or not—to a property so far overvalued the owners realize they will not have any equity in these properties for decades. Why pay ten’s or even hundreds of thousands of dollars in interest into a property for the next ten or maybe more years when they can simply walk away and start over twice as fast.

It’s time to identify the TRUE Villains and give the true victims—The American Public—some justice by mandating Principal Reduction Loan Modifications--to 110% of “Current” market value at 5.5% interest fixed for 30 years--on every loan issued prior to Jan 1, 2007—both current and in any level of default (current loans must receive equal treatment otherwise these borrowers will feel slighted for their good efforts and choose to default as well thus negating any positive effect). Let’s take it a step further and mandate the credit card companies to wipe clean all passed due debt (including fees and penalties), restructure payment plans for 10% less than the original principle balance owed at the time of default, and under a predetermined interest rate table that varies from 4% up to a cap limit of 11.9%, based on the borrowers current credit score. The extra money people now have from the Principal Reduction Loan Modifications will allow them to make these new, lower credit card payments. Let’s take another step to help speed the recovery of all those who have missed out on the “Real Help” and are suffering the consequences of not their own actions but the actions of those who have destroyed their lives, and have all Bankruptcies and Foreclosures dating back to Jan 1, 2006 wiped clean off their credit reports, thus giving them the opportunity to immediately begin rebuilding their credit and their lives opposed to being forced to ride out the next 5–10 years before they can begin to do so.

Does this force the closure of some Banks and Credit Institutions?

Who Cares!! It’s their own fault and no one is more deserving of whatever fate they succumb to. Time to let the Little Dogs Eat!

What positives could possibly come from all this non-sense?

1)      Most all potential future foreclosures will never reach that point. Excessive supply will stabilize and immediately begin to decline as demand begins to grow.

2)      This will cause property values to do the same

3)      We will immediately create millions of productive consumers who will use this opportunity to buy, thus building consumer confidence and strengthening the economy.

4)      Increased spending creates more business, more business creates more jobs, more jobs create more productive consumers, more employed and productive consumers buy more properties decreasing supply and increasing demand--and values, while at the same time they create more tax income for the governments to reduce their deficits.

5)      The banks will actually stop hemoreging money and have a new positive influx of capital—Albeit much less than their originally projected bottom line, positive non the less, and much more so than from the current “business as usual” practice of foreclosure--allowing them to loosen the currently highly restrictive lending requirements in place and be able to make more loans for those who can buy down the inventory. Plus they will have extremely limited worry about all those modified loans as the people are not likely to default or even refinance as their new 5.5% interest will be tough to beat.

6)      What is this—within one year the economy as a whole is moving in a positive direction. Little dogs are growing into common sense driven, conscientious big dogs. Unemployment levels are declining as fast as they climbed. All the current governmental budget cuts are now actually making a difference in the national debt—not that it will ever completely go away unless government as whole adopts all new spending policies and guidelines, And Sticks to Them.

7)      America is once again viewed as financial super power and praised for its              innovative, ingenious methods of exposing the villains and making them pay, flipping a bad economy virtually “on a Dime”, strengthening the position of its citizens, and revitalizing the American Dream.

It’s time to start screaming America “We Want this Fixed!”

and the answer is so simple if our government will just stand up to the bullies and make “THEM”, not us, pay for their actions

For a more in depth look at the numbers associated with a Principal Reduction Loan Modification pop over to www.promero.noteoffers.com/blog  and read a different version containing a breakdown of a typical--simple--mortgage loan in default.