by James C. Levie, President, Levie Mortgage Co.
During the past several years it seems that a bizillion well-intentioned individuals have attended seminars dealing with the buying, selling and referring of seller-held mortgages. Armed with 1-day, 2-day, 3-day or more courses in the subtleties of buying and selling these mortgages, these good people enter the minefield.
Because of vast increases in the numbers of these hard-working folks (sometimes it seems there are more “bird dogs” than mortgages to buy), one would be well-served to rapidly assume a mantle of greater professionalism.
Simply put: since you may not be the only individual vying for the same mortgage or deed of trust, you must get better and BE better than the other person. You must learn fast and continue to amass knowledge.
The following is a list of general hints that ought to give you a small head start:
1) In fact, there are only a few true end investors…true buyers. Know who they are. Learn what their appetites are. There’s no better resource than THE PAPER SOURCE REGISTRY OF NOTE INVESTORS
When a mortgage or note comes your way (finally), by dissecting the note and the deal you must know which investor is best-suited for this type of purchase. By providing some intelligent pre-screening you greatly increase your chance of an earlier sale…at a better price.
2) Try not to speculate. Don’t send deals to your chosen investor if you have not received at least some verbal willingness on the note holder’s part to sell the obligation. Just because public records may indicate a privately held note and mortgage does not necessarily mean that it would be for sale. Dig. Dig again!
3) Learn rapidly what documentation is critical for your end-investor. The following initial documentation (copies) are most helpful:
a) copy of mortgage or deed of trust…all pages
b) copy of promissory note…all pages
c) copy of the original closing statement
d) copies of hazard and flood insurance
e) determine that the original promissory note exists
f) determine property type and occupancy
g) can you get an estimate of current value (verbal)
h) try and obtain credit information…report, Social Security numbers on payors, payors’ mailing address, etc.
i) try and determine whether or not seller has a realistic attitude toward potential discounting
j) determine the pay history over, say, the past 12 months
Granted, you may not always be able to get all the above at first. However, you must try. Remember — you are asking an end investor to part with a chunk of cash. I(we) are delighted to do just that…but, first give me some value for my money… induce me into wanting to spend this money…convince me of the sanity of this proposed purchase. I don’t like spending money without good reason. In essence — turn me on with rock-solid facts!
4) Be prepared for the other things that may and will happen. Assuming that you have provided sufficient information (see item #3) and you receive a conditional go-ahead, here is a potential listing of what you may be called upon to do next:
a) order drive-by appraisal from investor-approved firm
b) assist in coordinating the ordering of title work in your area from investor-approved source
c) help obtain estoppel letter from payors
d) keep note seller on line with accurate information
e) you may have to determine payors’ home and work phone numbers
Never lose sight of the fact that your role is that of the glue. Don’t hesitate to roll up your sleeves and go to work. Hopefully, my document request, as well as other end investors’, is never flippant or frivolous.
Don’t fight the system; don’t resent the system; join the system and reach success. The more you learn to probe and assemble the better you will become. You will leave the vast majority of “bird dogs” in the dust and elevate yourself into a true professional.
