Newbie Question....sorry
What exactly is selling a mortgage note? How does it work? I am probably mixed up, but when I read it I thought this is what I read about it being. Someone draws up their own mortgage terms, and posts it (somewhere) and different lenders, etc bid or contact you if they are willing to accept it and give you the financing on the terms you drew up? Ok you may be laughing or I may be right, lol. I don't know, if that is not note selling, what am I talking about? Does it even exist?
JB
Lets keep it simple to start.
1. For some reason a borrower has taken out a loan to buy a property. Given the subject lets narrow this down to private lenders (people who do this when selling their own property but other situations happen).
2. For some reason the holder of the note (the one receiving payments) want to be cashed out. They are willing to sell the note and the future stream of payments to someone else if they can get a price they like.
3. Assuming that the buyer and seller can find a price that works for both, there are other aspects that need to be checked. The loan is secured by both the property and the capability of the borrower to make the payments. So a buyer would want to check the title, the value of the property, the credit score of the borrower, the payment history, etc. Mostly the same set of things that a lender cares about when you apply for a traditional mortgage.
Does this help for a start? There are books on the subject so if you still have questions do not be surprised. Just post here and if I do not reply send me an email as I sometimes get busy and do not check.
John