Performing Note Analysis

[Robert Harpster]

Curious about what factors investors consider first when buying a performing note?

Price of note to Unpaid Balance and Value of property?

Interest rate?

Origination date (seasoned or not)?

Location / Age of property? Are there states that you will not invest in?

I'm currently looking at some notes now and am not sure which factors to consider first.

Thank-you.

[Chris Seveney]

@Robert Harpster

When bidding I look at:

1. Pay history on tape

2. UPB vs. Property Value

3. State (judicial vs non judicial)

4. Area - appreciating, crime, most expensive or least expensive house in block.

5. In a flood plain

once I bid and accepted 

A.I will ask for servicing notes and pay history. I review these

B. Order a title report to review clean title, make sure title is clean and all non recorded items like note and allonge chain are intact. Also make sure name on title is the borrower.

C. Do a BPO on the property to confirm value

D. Call county to make sure no open liens/complaints on property.

E. Any other info in collateral package such as loan application, misc files/notes.

F. Check if borrower has history of filing BK

This is off top of my head, It is best to setup a due diligence checklist and just follow it through the process.