If you're considering investing in mortgage notes, it's important to do your due diligence and evaluate each note carefully. This video will give you a comprehensive overview of the mortgage note due diligence process, including:
Property value: You can use a BPO (broker price opinion) or a Realtor CMA (comparative market analysis) to get an estimate of the property value. This will help you to determine if the property is worth more than the outstanding balance of the loan.
Title search: A title search will identify any liens or encumbrances on the property. This will help you to ensure that you are getting a clear title to the property if you need to foreclose on the loan.
Property taxes: You can use a property tax search to verify that the property taxes are current. If the taxes are not current, you may need to pay them out of pocket when you purchase the note.
Borrower payment history: You can obtain a copy of the borrower's credit report to see their payment history. This will give you an idea of how likely the borrower is to make their monthly payments on time.
Servicing notes and borrower communication records: Servicing notes and borrower communication records can provide you with insights into the borrower's financial situation and their relationship with the servicer. You can request these records from the current servicing company.
Foreclosure status and bankruptcy status: If the borrower is in foreclosure or bankruptcy, you will want to check the status of these cases. This will help you to understand the borrower's rights and options, and the impact that the foreclosure or bankruptcy will have on the note.
Drive-by inspection: A drive-by inspection can give you a general idea of the condition of the property. You can also use a satellite image of the property to check for any obvious signs of damage or neglect.
By following this checklist, you can gather the information you need to make an informed decision about whether or not to invest in a particular mortgage note.
If you have any questions about the mortgage note due diligence process, please leave a comment below. I'm always happy to help!
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By: Cal Ewing Title: Mortgage Note Investing: What Info Do I Need To Evaluate A Note Deal? Sourced From: www.youtube.com/watch?v=PaDG1UBSLpU
