Скачать или смотреть Nonperforming Firsts and Seconds: What You Need To Know

Episode 289
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Bill: I’m with Patty Ped here from Aider Financials in Harrisburg, Pennsylvania. Hi, Patty.

Patty: Bill, how are you?

Bill: I am doing fantastic. I’m really excited to be talking here with everyone. Patty and I we’re working really hard and we thought we came up with some really good content for you. Patty and I were talking and we’ve met a couple times in person. We’ve talked before on social media. We’ve both learned a tremendous amount from Scott Carson. We also do things at least a little bit different. We both are focusing on nonperforming firsts right now. Patty, one thing that you might do a little bit different, it’s my understanding that not too long ago, you were investing in second mortgages and you’ve been changing your focus now to invest partially or at least mostly for the time being in first mortgages. You want to tell us a little bit about that and why you chose to do that.

Patty: Everyone who is joining us for the first time, I’m Patty Ped. I am with Aider Financials. We are a private mortgage investment forum based out of Central Pennsylvania. We do invest in notes nationwide. We do have some favorite States. As Bill mentioned, we started off investing in performing seconds. Once we got to hang of it, once we learned what the note business was about, we liked seeing those checks in our account every month, but we learned about nonperforming seconds. We learned about the ROI being more, which also means the risk is more so we wanted to venture into that and see how that would work out for us and it worked well. Then we started learning about first nonperforming mortgages and the differences between the two. The second space and the first space, they’re both entirely different. The way you deal with things, your due diligence, your focus, the amount of time and work you would spend on the borrower itself and the note itself, servicing the entire thing, managing it. They’re completely different in both of them.

For our personality, the first space was better suited. I think we ran into a couple of scenarios in our seconds where we wanted to help out the borrower, but because they were already I’m delinquent on their first and the first was getting ready to foreclose on them. We weren’t able to help the borrower as much as we liked to. We were trying to negotiate with the first on behalf of the borrower and we were trying to get them some great a deal going on. Luckily, we did do that this time but we realized that it was more challenging to provide the help that we want to in a second mortgage rather than an our first. When you’re a first mortgage note holder, you are first in line, you have a lot of flexibility going there and you have a lot of options that you could provide to the borrower and ensure that they can keep their home, which is our primary intent. We want the borrowers to keep their home. We want them to be happy about their choices. I think one of the main reasons we switched for us was it allowed us to do that in the first. For our personality, I felt like the first was a better option for us.

Bill: On my account one thing that I do, or at least I have done in the past a little bit different, I initially started off thinking I was going to buy and use performing notes and at the time similar to what Patty’s saying, I thought I did an inventory on my goals and situation and what I was trying to do. I thought performing notes was going to be the ticket, it’s going to be the bomb. It worked out okay. Some were better than others obviously if you’ve seen some of my other presentation, you’ve seen me talk about at least one of them that became a problem child. The thing that I came to conclude with performing notes it’s like buying a stock way up at the top of its value. Performing notes are expensive. If everything continues to go well and that borrower continues to pay, then you’re doing good. If something goes wrong, if that borrower loses a job, gets divorced, has health problems, has medical bills, whatever, and then they stopped paying you instantly overpaid for a nonperforming note.