📈 How Are You Vetting Borrower Risk on Performing Notes Bought From Other Investors?

[Richard Dickson]

Curious how others here are assessing borrower risk when buying performing notes from other investors — especially when the note wasn’t originated through an RMLO or when the borrower's pay history includes occasional late payments (30–45 days).

What red flags do you watch for?
Do you require updated financials, credit, or just rely on the pay history and property value?
How much "lateness" is still acceptable for you to consider it truly performing?

Looking forward to hearing how others approach this. Always trying to refine our own criteria.

[Alecia Bolton]

I tend to pay more attention to pay history and property than the actual person, regardless of how the note was originated.  Life happens in ways that no RMLO will be able to predict so to me, the past payment behavior is the best indicator.

I own loans that are performing, but the borrower is always 5-10 days late.  I have other loans where they are 30 days late once a year but always catch up.  I just expect a bigger discount on those types of loans when I'm buying.