Welcome to BP! :)
You are kidding, right?
Just any note? A mortgage? How was the note initially funded, cash or equity? Are working with a broker?
I could ask a hundred questions before giving you an answer......so, throw us a bone here, what is going on? :)
I am talking about a 1st lien mortgage note.. a paying one that was issued 2-3 months ago.. I aware of the fact that a due diligence should be made both to the borrower and to the sale process it self..
You really need a mortgage broker!
Don't want to sound rude, just they quickest way to say it; It appears you don't know enough about notes to provide the information required to point out, at least major areas for due diligence. A few months ago, Dodd-Frank was alive and kicking, so there is that compliance matter, the note could be worthless if not made properly.
Perspective, you're asking for over a thousand pages of information in a forum. Due diligence is an audit function and what you find may lead you to other research or investigation.
If you want to see the loan underwriting side, look up Fannie Mae underwriting guidelines on their site, is there an appraisal of the property?
You need to check out the borrower, the note holder, the property pledged as security, and the validity of the note, how it was funded, cash or equity (equity is seller financing). You also need to know foreclosure laws and how to obtain the property in the event of default and the costs involved.
If you're just looking for an investment, you need to get professional assistance.
@Dion DePaoli might help you, I don't know if he works AZ, I didn't service there.
The settlement of a note sale is pretty simple, an assignment, funding, an accounting, tax reporting and filing. You may want to replace the Trustee on the deed of trust to your attorney. Look at the contract for the purchase, representations and warranties and can the seller back up those aspects?
You can buy a performing loan and everything can go just fine, then again, you could lose all your money.
Start reading the note thread here, don't read compliance matters over a year or two old, Ken Rishel is a good compliance guy too.
If you have a specific question, fire away. :)
Thank you very much !
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