I’m looking for reputable full service mortgage note company..

8 Replies

Hi, As I’ve mentioned on a coupld of previous posts, I’m very interested in 1st position, performing mortgage notes....especially notes in Texas. I am trying to find a reputable note company that will walk me through the entire process and also service the note. Do you guys have any recommendations? I’m also considering purchasIng a partial but want to be sure I understand what would happen the borrower stopped makIng payments. I understand the process when I own the entire note but am not certain what would happen owning a partial. Thanks! Thanks, Shea

I do not think any note servicers have the time to teach. I know I wouldn't recommend any because I'd rather them focus on servicing my notes. If you want to learn about the process, you should ask here or find a mentor. Don't bother your vendors with education stuff.

@Shea Davidson In my experience, servicers range from mediocre to terrible. We currently are with FCI Lender Services and they are ok but we plan to use Madison Management on the next pool because we've heard a lot of good things about them.

@Shea Davidson A servicer will not teach you or provide any advice - because if they do and something takes a left turn they could be held liable. Services service the note based on your guidance on what to do. If you want to learn as Adam mentioned find mentors and take some training.
@Shea Davidson so are there companies that offer notes and servicIng as an investment vehicle? In other words, they are reputable for selling you solid notes and also servicing the note. I guess my goal is to be as passive as possible. Is this even an option? Basically I just want to be the investor, pay a small fee for it to be managed but in the event the borrower happens to foreclose then the property would still go to me because I’m the investor?

@Shea Davidson I think what people are suggesting is that you find a note investor to partner up with if you want to learn about the business. In that model, you provide the capital and the JV partner provides the know how and expertise.That's separate from a note servicer. A note servicer is kind of like a property management company for a rental. The property management company won't teach you how to be a rental investor just like a servicing company won't teach you to be a note investor. A JV partner who services his own notes, however, can teach you about the investing and the servicing side.

If you own performing notes, they can turn non-performing as you point out and they will no longer be a passive investment.

If you truly want to be passive, you might want to invest in a fund that invests in notes.

There are institutional note investors who accept referrals, even from new "note finders", and will then purchase the note by 'walking" you through the entire process. It's good to have a mentor or consultant,in your corner, too that can answer your questions on the fly. I found that when I first started (as with anything else) I didn't know what my questions were going to be until I got to that particular bridge and needed to cross it.

I know of some note investors who can teach youthe business as long as you can send them qualified referrals. If you want, just PM me and I can probably point you in the right direction.

We own 6 condominiums in PA, and are considering selling them to the existing tenants with seller financing. I saw Andy's post from a few months back where he was considering Madison Management as a possible alternative to FCI for servicing of  mortgage notes. I am curious if anyone has given them a try.  I'm wondering if a mortgage service company is the way to go, or if it would be more practical to handle it ourselves. Do local banks generally provide mortgage servicing for seller financing? Are mortgage service companies like FCI and Madison mostly used for non performing loans? I'm new to this.

@Shea Davidson -- if you're looking at being as passive an investor as possible, you might want to consider note hypothecation. I have purchased partial notes over the last few years as hypothecations. Essentially, the seller of the note maintains control of the security in case of default. You have no tenants, toilets, or taxes to bother with. If the note defaults, the seller pays you out and takes over with the borrower to work out a plan. You get regular monthly payments that you can roll over again and again. You can use your SD IRA funds or personal funds. You can still earn double digits. Each hypothecation is different according to the terms agreed upon between you and the seller. @Chris Seveney can tell you much more. He's an expert, very professional, and comes highly recommended.