All Forum Posts by: Peter Walther

There are a few variables that will impact where a note trades, seasoning being one of them. Some general guidelines:

- yield for the note-buyer at purchase will likely be 8%+; most are looking for 9-15%

- min 10% borrower downpayment if owner-occupied, 15%+ for non-owner occupied

- very few will buy the loan above 75% ITV (note purchase price/fmv); ITV plays a big role in general

- the more seasoning, the better; 6-12 months minimum is ideal (some will accept less in light of a strong overall profile) 

- if owner-occupied, then make sure the note is compliant; use an RMLO if possible

- other variables, like the borrower credit risk, collateral profile, and quality of the paper/structure will be more important with low/no seasoning

- use a licensed servicer for servicing

In my experience with PMM, a general seasoning (or prepayment penalty period) will vary based on the interest rate (ROI) you charge for financing as a seller.
If you want a long prepayment penalty period, like 3-5 years, then the interest rate you charge them has to be lower to match or compete with other financing methods on the market. Based on my experience, that interest rate will be somewhere 7-9% depending on the borrowers' profile. 

If you want a short prepayment penalty period, like 1-3 years, then the interest rate going to be more (10-12%) so you can get the ROI you want. 

Now, if there's a balloon in place (let's say in 5 or 10 years), then your interest rate has to be lower since that's a benefit for you as a lender and a risk factor for the borrowers.

Just wanted to share the final outcome. I ended up having to retain legal counsel, and my attorney spoke directly with the seller’s attorney, making it clear that the seller had no legal way out and that I was prepared to sue for specific performance. Fortunately, the seller came to his senses and accepted that he was obligated to close. We officially closed on Friday.

It was a nerve-wracking transaction, but I made it to the finish line. Thank you to everyone who offered advice and support along the way—much appreciated!

If you have title insurance, once you move the title to the LLC your policy won't follow. If this is important, have the title company re-issue a policy.

 just messaged you the case

 I have been told by every attorney worth their weight that getting a deed in lieu prior to a default to be put in escrow will never hold up in court - and in this instance - this proves it.

I see people doing this all the time - many times when the borrower defaults they just walk away anyways, but with home appreciation the last few years and borrowers now fighting for that equity - they are not going to be going away easily and if you think having this in your back pocket is the answer - you are wrong.

Hi Peter,

Actually, there was a mortgage with a $60k balance on the property, but I was aware of it and factored it into my bid. Between paying off the mortgage, the auction bid, and some other costs, my total outlay was around $200k for a property valued at about $260k, which I now have rented at $2,400/month.

As for the Clerk’s explanation, there really wasn’t one. When I didn’t get any response from them, I went down to the courthouse myself. Out of about 25 desks, not a single clerk was there; apparently, everyone was working from “home office.” The only person on site, the receptionist, simply acknowledged it was a clear mistake by the attorney, judge, and clerk. To resolve it, I had to file a court claim, which cost me another $2,000 in attorney fees. Just another example of the real costs of government inefficiency.

Hi Peter,

Absolutely, I can share a real-world example. Take a look at Miami-Dade Case 2015-011157-CA-01: in this case, the Certificate of Sale was issued two days after the auction, and the Certificate of Title wasn’t filed until 13 working days after the sale (April 13, 2023). This delay actually caused a major issue, the auction plaintiff tried to amend the final judgment amount, and by mistake, a new Final Judgment was entered for a future auction date after the 10-day window, but before the Certificate of Title was issued. Unfortunately, nobody, from the plaintiff’s attorney to the judge and the clerk, caught the error in time, resulting in significant costs and a lot of back-and-forth to resolve the problem. You’ll find all the details in the case docket.

Also, if you review random Certificates of Title in Miami-Dade for 2023 and 2024, you’ll notice similar delays cropping up, especially since the shift to more remote (“home office”) operations. These procedural inconsistencies have become quite frequent.

Hope this helps!