All Forum Posts by: Mazen Al Ashkar

@Jordan P. i'm not sure i can give an exact number or %. I can tell you as of today, on our re-performing loans, we have zero default rate. I could probably wake up tomorrow and this would change :), so don't quote me on this, but i think the one thing i can mention in this area is this: 

When you're trying to do a loan mod, don't be blinded with the money coming in (i.e. don't get greedy), you might get a good deal on the front end, go celebrate for a couple of months, until you wake up and realize that this deal did not match the home owner's situation and he/she is in default again.

I always try to make the homeowner put a price they are comfortable with and i try my best to knock-off 10-20% of that monthly PMT to show goodwill and show that i'm trying to keep their homes by allowing them to make their payments on time. 

Hope this helps

Hi Steve,

You are absolutely right RE: necessity of termination, i was just highlighting what the homeowner was willing to do. It really does not make a difference for me because of forfeiture timeline in AL which is what i mentioned to him. At the moment, the bigger problem is him convincing his spouse than it is the paperwork and terms (in homeowner's words :)). 

Great job on your Portfolio!

RE: Interest, per AL code, I don't think i can charge more than 6 or 8%; while others said there could be exceptions, i decided to just go with 6%. 

What I also did is called First National Bank to get a Hypothetical estimate of how much they would buy the performing note from me which i've posted below:

HYPOTHETICAL QUOTES: xxxxxxxxxxxxx, Gadsden, AL

Full Buyout w/ 6 mos. Seasoning: $22,544.00

• Based on pd. thru 6 mo. UPB: $27,855.76

Full Buyout w/ 12 mos. Seasoning: $22,472.00

• Based on pd. thru 12 mo. UPB: $25,602.05

Full Buyout w/ 24 mos. Seasoning: $17,070.00

• Based on pd. thru 6 mo. UPB: $20,743.57

Thanks for all the feedback so far, hope this is helpful!

Hi Linda,

Good point; I know a bunch of note investors that do this and i'm trying it for the first time. Especially in a CFD environment where the title is in your name as the lender. Definitely don't do this before you consult a lawyer but in my case, the homeowner was actually open and offering to pre-sign the termination letter as a guarantee since I helped him stay in the house at a very discounted price and adjusted his PP. Though we haven't finalized yet but i found it interesting to see how cooperative homeowners can be when you're offering them a win-win situation.

Will keep you posted.

 PP: Purchase Price

@Juan McLemore, Great stuff! Let me know if i can help in any way! Cheers!

Definitely not my first one :). I've been trying to keep my network up to date with each workout i do on my notes. I have 800k worth of them so far. 

Will keep you guys posted.

Hello All,

I bought a note (CFD) about 3 weeks ago and it boarded to my servicer as a REO; What seems to have happened is the hedge fund started forfeiture and by the time the collateral was sent to me, the homeowner had already received the notice of eviction from the court.

I thought i'd write about this situation and share with you for your input/throughts because the homeowner contacted me and is interested in keeping the house. Here are some numbers. 

BPO: 40k

Location: Gadsden, AL

PP: 18k

Here's what i proposed to the homeowner:

- I'll write a new land contract

- Homeowner will sign on termination letter and not date it (as a guarantee for him making payments, since he has very bad credit and i already have the history of him not making any payments on previous note)

- Sale price: 32,100

- Downpayment: 2100

- Loan amount: 30k

- Interest: 6%

- PMT: 400/month

Homeowner is currently discussing with his spouse, let me know your thoughts on this deal and will keep you posted on what ends up happening with this.

Cheers,

Daria, you are right, that was a typo. I meant to say ITV instead of LTV. ITV (Investment to value) is 27%. 13500/50000 = 27%

Hope this helps.

@Jay Jasunas I echo everyone's comments so far; very valuable. 

There are a lot of details and sub-point to the points below but i'll try to summarize based on my experince: 

1) I'm trying not to duplicate the same content in terms of due diligence that everyone mentioned so far, so the only other thing i would add is make sure you know and you trust where you're buying your notes. Just like any industry, there's alot of good people but also you'll be amazed by the number of people in the market who claim to be direct to the seller and can find you notes, but god forbid, might cost you alot of money to try to chase the actual source when it comes to recordings, assignment chain, etc...

2) Make sure there are no tax liens on the property, this can wipe out the 1st.

3) Buy in a low foreclosure timeline state (Mostly non-judicial states)

4) Of course it will be good if you find high equity notes (BPO is higher than UPB) and you buy 50% off of UPB, however, at the end of the day, even if you don't find equity notes, that doesn't make it a bad deal.

5) Also, there are many reasons why banks would sell the notes but mainly:

- They won't have to keep reserve funds for every penny that's non-performing (They have to approx. leave 10x the amount of non-performing assets in reserves).

- They can write-off the assets instead and get that 50% from investors.

- They are also not in the business of real estate, so at foreclosure, they wouldn't want to take care of the property, insurance, etc...

Hope this helps. 

Feel free to reach out if you have any questions. Will be happy to help where i can.

Cheers,

Mazin

Great stuff @Mathew Lambright