The term 'mortgage buyers' refers to investors who purchase monetary notes such as mortgages, promissory notes, land contracts and trust deeds. Individuals who own monetary notes can sell them in whole or part in exchange for a lump sum of cash.
When mortgage buyers purchase real estate notes and land contracts, the note holder assigns ownership rights by executing an assignment of mortgage. Typically, a real estate lawyer is required to execute the document and ensure both parties are legally protected in the event of default.
Mortgage notes and land contracts can be a smart way to obtain money. The banking crisis has left many lenders with little money to loan; particularly to borrowers with less-than-perfect credit. Note holders who need a lump sum of money might not qualify for financing through traditional sources.
It is relatively easy to locate mortgage buyers. Just type in "mortgage buyers" at your favorite search engine and you're certain to find millions of results. I cannot stress enough how important it is to engage in due diligence before selling all or part of your real estate notes and land contracts.
These days, anyone can slap up a website and claim to be a knowledgeable mortgage buyer. Truth is you could be dealing with an 18-year old entrepreneur who purchased a note buying course from a late-night infomercial.
Legitimate mortgage buyers will be licensed to conduct business. Public records can be checked online to determine if the investor or business is established as a legal entity. Type in "business license" plus your states' name to obtain verification.
Check with the Better Business Bureau at www.BBB.org. Google™ the mortgage buyer's name. Read reviews and see what people are saying. The Internet can provide a wealth of information, so use it to your advantage.
Ask the mortgage buyer for a list of references and contact each one of them. You cannot be too careful when it comes to selling real estate notes. If you make the wrong choice you could lose your property. Financial experts recommend interviewing a minimum of three mortgage buyers.
Properties and raw land must be appraised prior to selling the note. Assignment of Mortgage or Partial Purchase Agreements must be recorded through the court to document the transfer of future payments to the mortgage buyer. The process normally takes 30 to 45 days.
If you hold a mortgage note and need to sell it for cash, feel free to contact me. I'll be happy to discuss the process involved and available options.
Published on July 21, 2009 at 02:55 AM | Comments: 1
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