Mortgage Buyers for Real Estate Notes
Mortgage buyers are companies or private real estate investors who purchase mortgage notes, promissory notes, trust deeds and land contracts. These types of real estate notes can be sold in whole or part for a lump sum cash distribution.
Mortgage buyers assume the rights of real estate notes and land contracts through Assignment of Mortgage. This legal document outlines terms regarding future payments which have been sold to the note buyer. If a portion of the mortgage note is sold, a Partial Purchase Agreement must be executed. In order for these documents to be legally binding, they must be filed through the seller's local real estate court.
When partial mortgage notes are sold, security documents remain in the original note holder's name. Once Partial Purchase Agreement terms are met, the real estate note reverts back to the original note holder.
For instance, if you hold a promissory note valued at $100,000 and need $50,000 in cash, you could sell half the note to a mortgage buyer. Let's say the mortgage note is repaid over 100 payments. Once 50 payments are made to the note buyer, the remaining 50 will be paid to you.
This figure is for demonstration purposes only. Amounts will vary depending on the fee charged by the mortgage buyer. Some deed buyers charge a flat rate, while others engage in transactions at no cost.
It's important to consult with three or more mortgage note buyers. Conduct thorough research to ensure they are reputable professionals in good standing. Ask for references and contact each individual on the list. Check with the Better Business Bureau to see if any complaints have been lodged. Use the Internet to locate positive and negative reviews.
Be prepared to provide specific information regarding the mortgage note. Generally, mortgage note buyers require proof of the note's face value, balance, rate of interest, status of the note (current or past due), and asking price.
Prior to selling mortgage notes, the real estate will need to be professionally appraised. The Assignment of Mortgage and Partial Purchase Agreement documents must be filed in court. Once legal documents are recorded, all, or part of, future payments are transferred to the mortgage buyer. Transferring real estate notes to mortgage buyers generally takes 30 to 45 days.
Selling all or part of your deed of trust can provide you with cash to get out of debt, fund your child's college education, or provide funds for another investment opportunity. If you hold a mortgage note and interested in selling it, contact Simon Volkov to learn more about the process and options available.
We also invite you to discover a wealth of information on real estate investing, debt elimination, personal money management and more in our mortgage and real estate notes article library.