What is a Real Estate mortgage note?

Question

If I have discount property, a forclosure or can I sell the note to a bank or other lender? Thanks!

Answer 1

A mortgage note is a lot like a IOU secured against property.  Terms of payment and interest rate are the most notable items you will find on a real estate mortgage note.

Its possible to sell them.  It depends on the performance of the note and what you are willing to give as a discount.  If the note is on a property you've foreclosed on, you might be better off just selling the property although there are investors out there that will buy non-performing notes  but at a drastic discount.

Good luck.

Answer 2

It's a promissory note, which is a written promise to pay back the loan. You can't sell the note, because you don't own it ... the bank does.

Most mortgages are initiated by one company and then sold on the secondary market. This is when XYZ Mortgage company approves your loan and then lends you the money. They start receiving your payments for a few months. After awhile, they may sell your note to ABC mortgage company or a private investor to free up capital for other investments (like loaning money out for another home buyer).

The buyers of notes do so, because they might not have the infrastructure to initiate the loans and investigate prospective borrowers. But, they have the cash to finance a mortgage once it's all been approved by the initial lender. So, the buyer of a mortgage note would pay a premium (more than the mortgage is actually for, so the initial lender makes a profit) and then start collecting the mortgage payments from the borrower.

Answer 3

I dont think you can sell the note. There might be some way around it .

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