All Forum Posts by: Mike Hartzog

Hi Jamie - The rules for deficiency judgments vary from state to state. I would not rely too heavily on that as a mechanism for capital recovery in the event of default and foreclosure. The best protection is to select notes with equity in the collateral which exceeds the value of your note plus senior liens (the first mortgage in the case of a 2nd) by some margin (which you define). For example, 80% max LTV is a typical criteria used by investors and lenders which leaves a 20% unencumbered equity margin. If the equity margin is small or negative, the note should trade at a greater discount (and thus provide a greater yield) to reflect the additional risk level of the investment.

Hi Gilbert,

The service provider is working on your behalf so you should be thinking in terms of what you would like to accomplish.  Deliver a message to the occupant, determine if the occupant is the borrower or a renter, report occupancy status, take pictures of the exterior and report any damage of other issues they see, etc.

@Todd Tracy 

Message me if you would like a contact email.

@Bill B. 

Hi Bill - I learned this about Ohio in the process of pursuing a foreclosure in the state.  The attorney informed me of the requirement.  In addition to registering, Ohio also requires that I have an Ohio based agent to "accept service of process" on behalf of my entity. 

I don't view this as a big deal.  It's fairly quick and relatively inexpensive to set up.  Just another hoop to jump through.

Mike

I use Abstrax.

Bob is correct here.  You should ensure your notes are boarded with a servicer licensed in the state where the property is.  Beyond that, you may need to register if you are pursuing a foreclosure.  Ohio is an example, and the only one I have run into so far with this requirement.  The cost for the registration in Ohio is $125, but no need to do it unless you need to foreclose there.

The terms of the loan don't change with a sale.  So should be no impact to you from that perspective.

Hi Paul - Is this note performing or non-performing?  I am assuming performing since a credit report was provided.

I would suggest boarding the loan to a servicer and letting them deal with the notifications, payment and late fee collections, etc.  It's important to stay compliant with RESPA and other regulations and that's part of the servicers job.  If the loan defaults, you can move to foreclose on it of course.

@Paul Murch 

Hi Paul - You should be able to see the complete chain of assignment from the originator of the mortgage on through to yourself or your entity.  Sometimes transfer is done with an endorsement stamp on an existing assignment document, so you may not have an original assignment document for each transfer.  The same thing holds with note allonges (which are not recorded).  You want to see the complete chain.

You should have reviewed and O&E report (limited title search) as part of your due diligence.  Generally you can get updates on these from the company which produced the O&E for a reasonable fee.  This will show you which assignments have been recorded and that can be compared to the chain you see in your hard copy collateral to show you what still needs to be recorded if it is unclear. 

Mike