All Forum Posts by: Micah A.

 Bob, what I'm afraid of is running into compliance issues. I've only started note investing since August of 2017 and haven't encountered this situation yet. This admittedly is the steepest part of my learning curve to date. When you say the "servicer didn't care about compliance" do you mean they would service the note even though escrow was not established at origination? If so, does that violate any laws or regulation currently in place?

Thank you for answering my question. I’ll definitely give Madison management a call. Interesting that you mention FCI as an alternative because that’s who is currently servicing this note. It’s technically in the pre-boarding stage but their “specialty servicing team” contacted me regarding being unable to continue. Is there’s something I should be telling FCI that they may not be aware of?

I recently purchased a performing senior lien. While the audit was being performed by my servicing company they found that the loan was not escrowed for taxes and insurance at origination. They went on to inform me that because the loan is considered an "HPML" (high priced mortgage loan) and was not escrowed for at least 5 years it violated the terms of service agreement and they could no longer service it. They've given me a short amount of time to either transfer the servicing to my LLC or find another servicing company that can assist me.

I’d be lying if I said “I’m not worried”.

I've spent a lot of time trying to research my options but all I could find were mortgage servicing companies that deal with hedge funds and REIT's.

I am not sure what my options are or where to go from here any help or insight would be greatly appreciated. 

 FCI has assigned a lawyer for the note that I have started foreclosure on. I read a disclaimer on FCI's website stating that there are a lot of laws and regulations surrounding this industry and that it should be left to licensed, registered and qualified people. At this time I'm in complete agreement with that. 

Currently I use FCI Lender Services and have been pleased with the service they provide. I do however see that they are a "loan servicer" first and "loss mitigation" second. 

The overall goal of contacting the borrower was to implement the strategies put forth by @Dave Van Horn in podcast episode #28 to get the note performing again.

I am a new investor in the note space and until I get more experience I'll leave collections up to licensed proffesionals as I am not experienced in navigating the lawful landscape. I'm sure as time goes on I'll find ways to streamline my process. 

What are FDCPA and CFPB and how do they apply to collections?

Is it legal for me to contact borrowers directly to discuss modifying loans?

Currently own two non-performing junior liens in Connecticut. I have an LLC which I used to buy notes and currently have both notes boarded with a servicing company.

Hghly recommend Lehua Prasser https://www.lehuasrentals.com/welcome-1.html

She took care of a nightmare situation in my rental condo in Makakilo. New tenants moving in within a week then washing machine flooded. She helped me with water mitigation, found tenant a temporary rental while repairs were being done and assisted with organizing contractors. 

Her monthly and end of year statements are clear and organized. Payments were always on time. 

She has a cheerful disposition but can get stern when tenants aren't behaving. 

I have a 2/1.5 condo with a den as a long term rental in Hawaii. An investor buddie mentioned that I could convert the den to a bedroom and add value.

He estimates the conversion would cost $1,000 and the appraisal could bump $10,000 - $15,000. 

If this does happen can I use the new higher appraised value and cash out refinance $9,000-$14,000?

I feel like I'm missing a major part of this equation but I don't know what. Any help would be appreciated. 

Floor Plan: