All banks, credit unions, and other mortgage lenders have loans in varying stages of delinquency or default. Banks are sitting on a mountain of bad mortgages they would love to get rid of. They're stuck with loans they can't service-and they want them off their books. "Buying defaulted mortgages is a growing business. In today's real estate market, it represents a significant acquisition opportunity," says Lance Falow Partner at The Heathcote Group.
Here are a few tips on buying distressed mortgages:
Hard cash or access to financing must be in place before you contact any lenders.
Decide on the types and sizes of loans for which to bid.
Contact lenders to indicate your interest in purchasing default mortgages.
Ask for a spreadsheet that includes a borrower identification or loan number, balance, inception date, interest rate, monthly payment, next payment date, last payment received, maturity date and payments due.
Calculate the potential for collection and the approximate amount of the loan(s) that may be received.
Perform due diligence.
Make an offer and be prepared to negotiate.
Interested buyers must approach lenders carefully and must have sufficient financing or funds to complete a purchase as agreed.
The Heathcote Group
The Heathcote Group is a real estate investment firm with a concentration in conveyancing, foreclosure and title issues.The Heathcote Group lends money on commercial property and non-owner occupied residential property and also buys defaulted mortgages and distressed property, both in New York and Florida.
Thursday, March 11, 2010
Monday, March 8, 2010
Lance Falow Partner of The Heathcote Group lends insight on distressed property investing
Distressed properties are homes with owners who are having trouble with their mortgage obligations and possibly facing foreclosure. There are various reasons why a homeowner might find himself in such a position including job loss, medical emergency or financial mismanagement. In any case, these unfortunate circumstances could open the doors for great investment opportunity for home buyers.
"Foreclosure is one of the least desirable alternatives to the loan holder-the loan holder becomes an owner of the property and is one of the most costly and most time-consuming to them," says Lance Falow Partner at The Heathcote Group.
The seller of a distress home is easier to talk to considering the urgency of the situation. In many cases, the bid or offer is immediately accepted especially if local competition among sellers is tough. For your offer to be considered and accepted, you should make a reasonable and fair one. You can do this by studying the local housing market and doing a bit of research. You and the seller can agree to a non-monetary compromise that will allow the both of you to walk away satisfied from the sale.
Keep in mind that a distress property may require some major repairs and you should have the property professionally inspected before closing the deal. In addition, you might want to include the cost of the repair in your overall budget in order for you to avoid going overboard. The search and purchase of a distress home is riddled with challenges but if you are able to overcome them, you will reap the full reward.
The Heathcote Group
The Heathcote Group lends money on commercial property and non-owner occupied residential property. It also buys defaulted mortgages and distressed property, both in New York and Florida.
"Foreclosure is one of the least desirable alternatives to the loan holder-the loan holder becomes an owner of the property and is one of the most costly and most time-consuming to them," says Lance Falow Partner at The Heathcote Group.
The seller of a distress home is easier to talk to considering the urgency of the situation. In many cases, the bid or offer is immediately accepted especially if local competition among sellers is tough. For your offer to be considered and accepted, you should make a reasonable and fair one. You can do this by studying the local housing market and doing a bit of research. You and the seller can agree to a non-monetary compromise that will allow the both of you to walk away satisfied from the sale.
Keep in mind that a distress property may require some major repairs and you should have the property professionally inspected before closing the deal. In addition, you might want to include the cost of the repair in your overall budget in order for you to avoid going overboard. The search and purchase of a distress home is riddled with challenges but if you are able to overcome them, you will reap the full reward.
The Heathcote Group
The Heathcote Group lends money on commercial property and non-owner occupied residential property. It also buys defaulted mortgages and distressed property, both in New York and Florida.
Lance Falow, Partner of The Heathcote Group lends insight to current commercial market lending.
Recent events with Wall Street may affect everyone's ability to get commercial property lending money to some degree or another, but a typical financial world can offer these options. Banks have stopped lending and offering credit to all borrowers, even those who have never missed payments on previous loans. "This is only exacerbating the credit and liquidity problem in the market," says Lance Falow Partner at The Heathcote Group.
While commercial banks and life companies continue to dominate the limited volume of commercial real estate lending currently taking place, other lending sources are beginning to emerge to replace a portion of the liquidity formerly supplied by the now dormant CMBS market-Private Money Lenders."If you are tired of hearing "No" from the banks, a hard money loan may fit your needs or investment strategy perfectly," adds Falow.
Unlike traditional lending, which is largely defined by credit scores and the borrower's ability to repay, hard money loans are based almost entirely on the value of the underlying asset and the project strength. A conventional mortgage from a traditional source may take between 60 and 90 days to fund. A private money mortgage lender can usually complete a transaction within 7-to-10 days. Terms and requirements for these types of loans will vary from lender to lender.Hard money loans are a valuable option for many types of real estate transactions.
The Heathcote Group
The Heathcote Group lends money on commercial property and nonowner occupied residential property. The Heathcote Group buys defaulted mortgages and distressed property, both in New York and Florida.
While commercial banks and life companies continue to dominate the limited volume of commercial real estate lending currently taking place, other lending sources are beginning to emerge to replace a portion of the liquidity formerly supplied by the now dormant CMBS market-Private Money Lenders."If you are tired of hearing "No" from the banks, a hard money loan may fit your needs or investment strategy perfectly," adds Falow.
Unlike traditional lending, which is largely defined by credit scores and the borrower's ability to repay, hard money loans are based almost entirely on the value of the underlying asset and the project strength. A conventional mortgage from a traditional source may take between 60 and 90 days to fund. A private money mortgage lender can usually complete a transaction within 7-to-10 days. Terms and requirements for these types of loans will vary from lender to lender.Hard money loans are a valuable option for many types of real estate transactions.
The Heathcote Group
The Heathcote Group lends money on commercial property and nonowner occupied residential property. The Heathcote Group buys defaulted mortgages and distressed property, both in New York and Florida.
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