Tag Archives: note buyer

Fake Recovery Means Little Reform — Mortgage Notes

Over the past several years, the U.S. has emerged from the depths of a recession to a full-fledged fake recovery.  On the housing side, real estate investors, buyers of mortgage notes, and Wall Street have seen the good ‘ol days return as home prices zoom once again.  In earlier articles in this space, I’ve discussed at length why this recovery is not real and has been orchestrated by huge amounts of government spending.  This spending and poor financial leadership at the highest levels seems to be leading to an entirely new bubble.

However, there is another big downside to this fake recovery, and that is the near total lack of reform of the institutions that were big players in the last collapse.  As a note buyer and business owner, if I have a lousy couple of quarters where I buy only a few mortgage notes, then I know that I need to try something different in my marketing, operations, or elsewhere.  Similarly, a family that has had the misfortune of experiencing a foreclosure or bankruptcy is most likely going to make some big changes to their budgeting and spending next time around.

mortgage notesThis has clearly not happened with our government and its Wall Street allies.  Big banks are bigger than ever and executives continue to rake in huge bonuses.  Real reform of the housing and banking industries has simply not occurred and does not look like it will happen.  A good example of this is what has happened with Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them into securities.  These nearly bankrupt entities were placed into conservatorship by regulators in 2008 and have together sucked nearly $200 billion out of taxpayer wallets (per Bloomberg).  These companies deserved to be shut down or at the very least heavily restructured a long time ago.  Instead, they continue to function in much the same way as before and still dominate the mortgage landscape.  The fact that each is now generating small profits nearly guarantees that minimal change will ever happen.  Quite likely is that they will be largely responsible, along with the FHA, for the next housing crisis.  Sigh … some things never change.

Take the Stress Out Of Selling a Mortgage Note

Life changes, often exciting and sometimes challenging, at times can be overwhelming. This is especially true when it comes to financing them. If you have made the decision to or are considering selling a mortgage note, it may feel like it falls under that umbrella of overwhelming, but it doesn’t have to.

The very first step for ensuring a stress free mortgage note sale experience is choosing a trusted and reputable note buyer.  A seasoned note buyer can answer your specific questions, assist you to determine the best course of action when selling all of a real estate note or a partial note sale, and then walk you through each step of the note buying process.

As a note buyer and note broker, one of our main goals at Seascape Capital is to make the mortgage note selling process as easy and stress free as possible.

The Process:

Although each situation is different, there are common steps involved in selling your mortgage or real estate note. Below is our typical process.

  1. Contact Seascape Capitalwith important information about your note and property, such as type of property, sale price, payment amounts, etc. We can assist you to determine the information required.
  2. We will usually respond within one business day with a quote for the full amount of the mortgage note or part of it , depending on your desire for the mortgage note sale.
  3. Upon approval of the quote there is just a small amount of paperwork to complete, and if there isn’t a recent appraisal or title policy we can take that off your to do list by making the arrangements. Most importantly, you pay no closing costs, fees, or commissions.
  4. Once we have the documents, the process generally only takes 2-3 weeks for you to receive the money. It’s that simple!

More significant than the process, is how a note buyer conducts business. Please see below for testimonials from some of our valued clients:

Your invaluable assistance helped me close out the estate administration of the residential note that was the last remaining asset in my father’s estate. I appreciate your persistence and ingenuity in overcoming problems and obstacles to bring a difficult transaction to a successful close. I’ll recommend you highly to anyone who faces a similar challenge.

Tom M.
California

I do consider you a friend now, and I would give you a Gold Star, A+ for your great work and communications.

Ilena R.
California

Doing business with Alan was a successful experience. He is diligent, responsive and does a nice job following up through the conclusion of the deal.

Thanks Again.

Rick H.
Idaho

Whether you are ready to request a mortgage note quote or would just like to seek advice on how to proceed with selling a note, please give us a call. As always, if you have additional information to offer or general questions you think others might have as well, please enter them in the comments below and we will be happy to respond.

 

Planning in the New Year – Is It The Right Time To Sell A Mortgage Note?

It wasn’t long ago that we celebrated the coming of new year –  we watched the ball fall, made some resolutions and some noise, and toasted to 2013.

Starting fresh is what the new year is all about. While we do reflect on the past, for example how we capped off 2012 with a tumultuous presidential election and concerns about the fiscal cliff, the new year is really more about planning for the future. As we look ahead and consider changes to come, it’s a good time to review finances and consider the best use for our investments.

The decision whether to sell all or part of a mortgage note (also often called a real estate note, deed of trust or promissory note) usually boils down to two main categories.

First: Simplifying Life

While holding a mortgage note can be a good investment and receiving monthly payments beneficial, managing the responsibilities and risks inherent to holding a mortgage note can feel burdensome at times. If you find any of the below to be stressors, it may be a good time to consider selling your mortgage note:

  1. Managing payments, insurance, and taxes for your mortgage note.
  2. Planning your estate for heirs.
  3. Settling finances in the event of a divorce.
  4. Assuming the risk of non-payment of a mortgage note or bankruptcy of the payer.
  5. Unexpected changes due to the divorce or death of the payer.
  6. Worrying about default and foreclosure.
  7. Concerns with the real estate property becoming devalued.

 Second: Cash Requirement

There is no question that life changes, planned or not, often come with expenses. Selling a mortgage note is a fairly simple way to raise a lump sum of cash quickly, and can be significant depending on the value of your mortgage note. Types of life events that may warrant selling a mortgage note are not limited to, but include the list below:

  1. Covering medical expenses
  2. Paying for college tuition.
  3. Planning a wedding and/or starting a family.
  4. Buying new real estate.
  5. Making a career change and/or investing in a new business.
  6. Transitioning into other investments or reinvesting at a higher interest rate.
  7. Purchasing a vehicle and other high cost items.
  8. Funding travel plans.
  9. Managing retirement expenses.

If you are in the process of deciding if selling a mortgage note makes sense for you, you may want to contact a  reputable mortgage note buyer for further advice and information.

 

How to Sell Mortgages — The Recessionary Gene

As our national and global economies continue to be battered by nasty headwinds, it is useful to step back and gauge the place in which our economy rests.  Is the economy showing real growth, are we in a full recession, or somewhere in between?  In my mind, we can clearly cross out the first option.  Payroll reports, unemployment, exports, manufacturing, etc. are weak, with very few bright lights to reassure us.  Yes, in real estate, rents, home prices, and home sales are up slightly nationwide but keep in mind that these are from depressed prior numbers.  If you use to make $10,000 per month in salary, then went to $5000 and recently bounced up to $5500, that would be a big 10% increase from the bottom in percentage terms, but probably would not particularly excite you.  The same is true in real estate, and I expect prices to stay mostly flat for at least the next couple of years.

The U.S. does not meet the technical description of being in a recession, which is defined as two consecutive quarters of economic contraction.  However, by other definitions such as that used by the International Monetary Fund, both our country and many others across the globe are definitely in a recession.  Even our politicians, who are not exactly known for their honesty and candor, aren’t claiming that we’re in good times.  Let’s look at a few examples of what is happening.

Last week, we learned that the city of Scranton, Pennsylvania had only $5000 left in the bank and slashed all public worker wages to $7.25 per hour, including that of the mayor.  San Bernardino (population $209,000) just filed to be the third California city in two weeks to file for bankruptcy.  You can bet that many other cities are close behind.  The consistent theme across most problem municipalities is deficit spending, high union wages, and ridiculous pension obligations.  Often, bankruptcy is the only way to reduce costs and have a hope of returning a city to prosperity.

As I have harped on before, the economy needs to find its natural bottom in order to fully recover.  Instead, federal and state governments continue to offer silly programs that have been proven failures in the past.  A favorite quote that I recently saw was “Government – If you think the problems we create are bad, just wait until you see our solutions.”  The governor of California is getting ready to sign a law that will make it harder for lenders to foreclose.  A few parts of this law make sense and I agree with, namely (1) not starting foreclosure in parallel while doing a loan modification, (2) requiring banks to assign one group of employees to handle individual mortgage situations, and (3) banning robo- signed documents.  The rest of the bill is a mess which will only drive up costs for lenders, who will in turn pass those costs along to consumers.

At the federal level, the Federal Housing Administration (FHA) is in trouble.  The FHA insures loans requiring only a 3.5% down payment, and accepts payers with credit scores as low as 580.  The FHA, along with fellow government-associated entities Fannie and Freddie are responsible for 90% of home loans in the U.S.  The number of delinquent loans with FHA soared in the first quarter of this year by 27% from the first quarter of 2011, while foreclosures jumped 17%.  Meanwhile, nearly half of all government-guaranteed mortgages that had been modified defaulted again within 12 months (source: 7/9/12 CNN Money).

The FHA model is clearly broken and the taxpayers will have to ride to the rescue to save it.  You do the math – if only a 3.5% down payment is needed but it later costs 5-6% in realtor commissions and 2% in other closing costs, then the property is upside down even if its value remains stable.

Over on the monetary side, the Federal Reserve keeps interest rates low (punishing savers), constantly throws money into the market, and snuggles up with the big banks.  Nothing that they have done so far has worked, and they are unlikely to succeed in the future.  As Simon Black stated, they have a “ … false premise which guides their decisions in that we can all grow wealthy by borrowing and consuming instead of by producing and saving.”  Our society has pushed this approach in recent decades and it is now time to pay the piper.  The command-control political elites have this “recessionary” gene that causes them to make decisions sounding good to the slow learners but that defy common sense in every way.  Until they get out of the way, we cannot experience a true recovery.

Alan Noblitt is a note buyer who also helps people who want to know how to sell mortgages.  For information on how to sell mortgages, go to the Articles section of the website or click on the red You Tube button found on most of the pages.
The U.S. does not meet the technical description of being in a recession, which is defined as two consecutive quarters of economic contraction.  However, by other definitions such as that used by the International Monetary Fund, both our country and many others across the globe are definitely in a recession.  Even our politicians, who are not exactly known for their honesty and candor, aren’t claiming that we’re in good times.  Let’s look at a few examples of what is happening.

Last week, we learned that the city of Scranton, Pennsylvania had only $5000 left in the bank and slashed all public worker wages to $7.25 per hour, including that of the mayor.  San Bernardino (population $209,000) just filed to be the third California city in two weeks to file for bankruptcy.  You can bet that many other cities are close behind.  The consistent theme across most problem municipalities is deficit spending, high union wages, and ridiculous pension obligations.  Often, bankruptcy is the only way to reduce costs and have a hope of returning a city to prosperity.

As I have harped on before, the economy needs to find its natural bottom in order to fully recover.  Instead, federal and state governments continue to offer silly programs that have been proven failures in the past.  A favorite quote that I recently saw was “Government – If you think the problems we create are bad, just wait until you see our solutions.”  The governor of California is getting ready to sign a law that will make it harder for lenders to foreclose.  A few parts of this law make sense and I agree with, namely (1) not starting foreclosure in parallel while doing a loan modification, (2) requiring banks to assign one group of employees to handle individual mortgage situations, and (3) banning robo- signed documents.  The rest of the bill is a mess which will only drive up costs for lenders, who will in turn pass those costs along to consumers.

At the federal level, the Federal Housing Administration (FHA) is in trouble.  The FHA insures loans requiring only a 3.5% down payment, and accepts payers with credit scores as low as 580.  The FHA, along with fellow government-associated entities Fannie and Freddie are responsible for 90% of home loans in the U.S.  The number of delinquent loans with FHA soared in the first quarter of this year by 27% from the first quarter of 2011, while foreclosures jumped 17%.  Meanwhile, nearly half of all government-guaranteed mortgages that had been modified defaulted again within 12 months (source: 7/9/12 CNN Money).

The FHA model is clearly broken and the taxpayers will have to ride to the rescue to save it.  You do the math – if only a 3.5% down payment is needed but it later costs 5-6% in realtor commissions and 2% in other closing costs, then the property is upside down even if its value remains stable.

Over on the monetary side, the Federal Reserve keeps interest rates low (punishing savers), constantly throws money into the market, and snuggles up with the big banks.  Nothing that they have done so far has worked, and they are unlikely to succeed in the future.  As Simon Black stated, they have a “ … false premise which guides their decisions in that we can all grow wealthy by borrowing and consuming instead of by producing and saving.”  Our society has pushed this approach in recent decades and it is now time to pay the piper.  The command-control political elites have this “recessionary” gene that causes them to make decisions sounding good to the slow learners but that defy common sense in every way.  Until they get out of the way, we cannot experience a true recovery.

Alan Noblitt is a note buyer who also helps people who want to know how to sell mortgages.  For information on how to sell mortgages, go to the Articles section of the website or click on the red You Tube button found on most of the pages.

Going broke … slowly — Note buyer

On the surface, the U.S. economy seems to be turning around.  Many of the TV talking heads say so!  Heck, the U.S. added 120,000 jobs in November, bringing the unemployment rate down to 8.6%.  On top of that, retail sales from the Thanksgiving weekend were stronger than expected and manufacturing in the U.S. has been picking up.  These figures have given the economy a sugar high that suggests all is well.

Sorry to be the naysayer, but just a little bit of drilling down exposes the soft underbelly of our fragile economy.  On the jobs side, which is the most critical variable in the whole economic equation, jobless claims are still sky-high (402,000 in the last week of November) and most of the job gains lately have been in the lower-paying service sector.  Higher retail sales are not sustainable because average incomes are flat or worse.

It amazes me that certain commentators can say with a straight face that Americans are diligently working to reduce their debt levels.  Yes, it is true that household debt dropped by 0.6% in the third quarter, but a big cause of that fall was more people defaulting on their mortgages.  The average foreclosure now takes 631 days from initial delinquency until foreclosure, so those homeowners are getting to live mortgage-free and rent-free for nearly two years.  Some piece of that saved money no doubt contributed to the higher retail sales.  With about six million houses in some stage of foreclosure, we are nowhere near the end of the real estate meltdown.

The economy is built on soft sand, with increased debt masquerading as growth.  Although our government is bankrupt, it continues to spend massive amount of money that it does not have.  The press recently reported that the Fed made $7.7 trillion (not billion) in loans and guarantees to banks during the early stages of the financial crisis.  This week, the Fed agreed to essentially backstop bank loans for the entire world, again with money that it doesn’t have.

During this month of December, Congress has to vote on several major budget items, including extending the payroll-tax break, whether to extend unemployment benefits, adjusting payments to doctors under Medicare, and whether to raise the debt ceiling.  Can anyone doubt that it will pass most of these but resort to accounting fiction to pay for them!  Adult supervision is clearly lacking in Washington D.C., as it is in most state capitals.

As a note buyer of mortgages, it continues to amaze me that nobody seems to be calling out the facts on this.  A note buyer or any other business person in the real world could never operate a legitimate business like this.

At some point, the crisis will reach such a level that the politicians will be forced to actually cut expenses (not just reduce growth), though they’ll go down kicking and screaming.  In the meantime, I think that the economic shocks to this country are only just getting started.