All Forum Posts by: Maureen Hannan

@Dion DePaoli Thank you very much! As you can tell, I was not well educated about all of the finer points when I entered into this loan. I do plan to keep on top of the borrower--as you say, it's in his best interests also to pay fully and on time each month.

Marc Faulkner Thanks for explaining the market for the note I hold. And the options available to me. All of that makes a lot of sense. Looks like the best thing really is to hold on to it until maturity.
Maureen

Bill Gulley Thanks--I was not aware of that rule about amortization. Since the loan was handled by a real estate settlement firm and I consulted an outside attorney as well, I thought all had been done properly.

Dion DePaoli Wow--thank you very much for explaining that so thoroughly to me.

You hit the nail on the head with this statement:

I never expected to be denied. I was feeling mostly okay about the note until I got that reaction...I'm just in a place where I'm examining everything in my portfolio and asking questions about whether I'm getting the best return that I could.

I have had two late payments (i.e., more than a week past due) during the 3.5 years. Repeatedly, I have had 10 payments arrive 5 to 7 days late--which is annoying, but not of major consequence. Two payments arrived $1K short. Each time the borrower explained that work was slow and each time we worked out a plan to catch him back up. He is up to date on his payments at this time.

Again, thank you for your time and your help. I truly appreciate it.
Maureen

Bill Gulley In answer to your questions...

1. The loan was properly originated. I hold the deed of trust.
2. It is not amorized at all, since it's interest-only. At the end of 10 years, it's due and payable. The borrower is required to refinance.
3. The borrower is a freelance photographer so self-employed, but yes there was verification of income at the time the loan was made. Credit was not great, but since the house appraised for $500K at the time and the title search was clean, I figured the house, (great location, large lot, right by a metro station) was sufficient as collateral.

So, yes, I get what your saying about how all of these variables matter. And I knew it was not a perfect situation (bc of the unpredictable nature of the borrower's income), but the loan WAS done properly....and I wanted to know exactly where I stood by running the credit check. I knew these were the questions a prospective buyer would ask, and I wanted to be prepared.

Thanks for the good questions. If you have any further insights, I'd love to hear them.
Maureen

Thank you all for the advice. I realize now my subject line probably did look a bit like I was shilling for a buyer. That certainly is not my intention. I truly don't know this market and I was exploring selling because I wanted to understand more fully what my options are. If I had to take that kind of a financial loss to sell, I certainly would not. It's a 10-year interest-only loan at 5 percent, and there are 6.5 years remaining on it. I'll wait it out and just think of it the same as a CD getting decent interest.

I had heard that it's best to ask permission before running a credit check--and I always like to do things out in the open. I didn't think it was a big deal, so I was very surprised when the borrower said he would not give permission. I'm guessing it's because his credit has gotten worse since the loan was made.

Thank you for explaining how the credit check thing works. It's good to know for future dealings.

Best,
Maureen

Hello All,

I would really welcome advice from anyone experienced in mortgage brokering. I hold the note on a home in Arlington, VA. The amount of the note is $420K, and the home is currently valued at roughly $450K. (That is a best guess, from comps and Zillow--I have not yet sent an appraiser out to get a precise, current valuation.) I asked the borrower to give me permission to have a credit check done on him for the purposes of exploring selling the note. He refused.

What does one do when the borrower will not acquiesce to the credit check??? How should I move forward on exploring selling this note?

Thanks,
Maureen

Thanks, Justin Fraser. Let's keep each other posted, okay?

Hi Justin,
Well, I have to say the best nuts-and-bolts how-to I've read so far has been the free book offered as the promo on this site (which is why I joined). I liked how it linked to so many of the articles and resources on the site. At a higher level, I got a lot out of a book entitled [i]The Pledge, by Michael Masterson. All about charting a plan including several different wealth-building elements--along with goals and timelines. He is a successful real estate investor and entrepreneur in south Florida, so there was some good stuff on real estate as a wonderful complement to other income streams.

Mostly, though, since I've often made the mistake of relying too much on books and too little on wise individuals, I've been focusing on simply asking questions of people who've been successful in RE in my area. I've been pleasantly surprised by how willing they are to share and offer guidance.

Good luck--and please pass along the titles of the books that you are finding most worthwhile!
Maureen

Thank you so much, Jay Sebastian and Mike Nelson. I am really rather amazed by how much info--and how much community--is here. So cool! Look forward to following along with your exploits too,
Maureen