1st Deed Analysis (FCI Exchange)
I'm starting to dig into marketplaces for notes, and I wanted to try to analyze a deal here.
Note Position: 1st Mortgage/Deed of Trust
Loan Status:Performing
Paid To:03/08/2014
Loan Maturity:10/08/2039
Loan Type:Residential
LTV Ratio:80.821%
Original Loan Amount: $95,000.00
Principal Balance: $88,903.36
Est. Market Value: $110,000.00
Valuation Type:Other
Valuation Date:03/28/2014
Note Rate:5.750%
The starting bid is 25% of the UPB.
The seller would earn $22,225 on the transaction.
The buyer would pay $22,225 (plus expenses) in exchange for $554 monthly payments (interest and principal payments) for 25 years .
The new effective interest rate for the buyer is 23%.
Main issues to uncover:
True market value of property (the seller set his own ARV, and this deal makes less sense if the property is worth only $60,000)
If there are unpaid taxes, or other liens, and if the property is foreclosed, does the 1st mortgage get his UPB before all other liens on the property?
This listing fits in the "too good to be true" category for me, and I would assume it won't actually sell for $22,225.