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Colorado Mortgage Buyer

The term of Colorado mortgage buyer is fairly obvious at a high level, as it refers to a company that will buy a mortgage note on a property in Colorado. But what is a mortgage note and what role does a Colorado mortgage buyer play? First, a mortgage note (sometimes called a deed of trust note or real estate note) is used when a property is sold using owner financing. So, Sam is selling his Ft. Collins house to Betty for $200,000, and Betty puts in a $20,000 down payment. The two of them agree on terms for the $180,000 that Betty still owes. They could decide that Betty can make payments over 30 years at a 6% interest rate, resulting in a monthly payment of $1079.19. The mortgage note is a legal document that puts everything that the two parties agreed to in writing, and it is signed by the buyer. The note is prepared by an attorney or title company and is accompanied by a deed of trust, which makes the property collateral for the note. If the buyer stops making payments or otherwise does not follow the terms of the note, then the seller can foreclose on the property to get it back.

In the example above, Sam may decide, after receiving a few payments that he would rather cash out of the note so that he can pay off some credit card debt and try some other investments. He would then contact a Colorado mortgage buyer like Seascape Capital. Sam would share the details about the transaction with the note buyer, who would in turn tell Sam how much he would pay for the mortgage note. The mortgage buyer would most likely bring back at least a couple of options such as one to buy out the full note and others to just buy some of the payments.Home for mortgage notes

Finding a Great Note Buyer
Within the industry of mortgage buyers, there are thousands of people and companies, with varying levels of expertise and integrity. You will want to work with someone that feels right to you, that has excellent experience, is accredited by the Better Business Bureau, and who has a real estate broker license from one of the fifty states. You can find a 2-minute video giving more detail on this at http://www.youtube.com/watch?v=VnHk01C5orM.

The Process
The steps involved in selling a mortgage note are about the same for a Colorado note buyer as for a buyer of mortgage notes in other parts of the country. As noted above, the first steps are for the mortgage buyer to gather the needed information and for that person and the note holder to agree upon a price for the mortgage note. After that, the mortgage buyer would check the payer’s credit, the note holder sends in copies of relevant documents, and the due diligence begins. This phase involves the note buyer reviewing the documents, conducting an appraisal, and doing a title search. Assignment documents are then sent to the note holder who signs and returns them along with the original note and deed of trust. The note buyer would then wire out the money to the note holder and the transaction would have been successfully completed. The entire process normally takes 3-5 weeks, though that can vary widely.


 

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