Who, Me A Bank?
Question: You are being conned, or you are perpetrating a con, one or the other.
You should be able to figure out why this is so, and should be able to figure out how I know this positively with the limited amount of information you posted.
Answer: Ok, so I will buy that you are not going to con anyone. Let me then tell you, you are being set up for a con.
Al, myself, and I’m sure others will explain what should be obvious to you – if a bank does not want these clients, why in the would would you lend your life savings?
Sure, ok, your mortgage is secured by the real estate. They stop paying, you file forclosure. They file bankruptcy. How long are you willing to wait to get your money back? with no monthly payments? With legal fees to forclose, attend BK hearings, court hearings for forclosure, sheriff sales put off 10 times over 3-4 years?
Just trying to help you see the light – to lend $$ to someone who would not get a loan elsewhere, they will obviously have less than perfect credit. At what Loan-to-value will you lend? At what Rate? And remember, lending at 35% sounds great on paper. You just actually have to receive the $$$, they have to pay.
You are going to listen to a realtor advise you what is a good deal or a bad one? That would be very unwise, since the only party that IMMEDIATELY gains from this is the realtor, by getting thier commission from the sale. Who will do due diligence on the borrower or secured asset?
Finally, if you are going to do it anyway, I will pay 13% annualized, 5 points in, 5 points out for as much money as you care to invest, secured by real estate AND corporate assets AND a great balance sheet. Banks look at *credit* while many private investors look only at %-rate & LTV (LTV being the first issue to satisfy ~ 60% or less is good-to-go).
Banks expect to be paid while I never expect to receive payment one and have turned down offers to review the borrower’s credit. If my decision to fund a loan is based upon the guy’s credit, I have no business making the loan.
When I purchase an assignment of a secured note, the borrower is sent a letter with support documents showing that the loan was sold to me and info as to where they should remit payment. The correspondence also states that if they fall behind in making payments, no notice will be sent since they already know they failed to remit payment. As the beneficiary I merely substitute in my attorney as “trustee” so he can file default.
Borrowers seldom make payments (at least the ones I deal with) and when they don’t make payment I get the collateral property (sooner or later) and that was the bargin I was after in the first place.
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