Seller Held Mortgage Notes Let You See the Truth

2010 continues to be an interesting year for mortgage note buyers. This April, economic and real estate news focused on the role of deception in the economic meltdown. The best known instance is the federal government's investigation of Goldman-Sachs – specifically, the accusation that the firm knowingly sold real estate based investment products that were doomed to failure in order to short sell and profit.

This isn't the only case of deception, however. Credit rating agencies such as Standard and Poor's and Moody's are coming under fire for giving AAA ratings – the most secure – to sub-prime and other inferior mortgage securities despite significant evidence that they has problems. Former Fed chairman Alan Greenspan called the ratings “grossly inflated,” and suggested that the agencies may have simply been flabbergasted by the complexity of these investments – a statement that clearly questions whether the self-appointed investment watchdogs are competent to do the job entrusted to them.

On the street, typical investors relied on the experts to act ethically and know what they were talking about. They had no access to highest levels of the business, where executives packaged, planned and approved mortgage backed securities. Even if the economy has recovered and regulations have changed, that situation hasn't changes for typical investors. Fortunately, alternatives like seller held mortgage notes exist to get rid of the distance between investors and their investments.

A private mortgage note is an investment that's accessible and under your complete control. You not only have the ability to assess your property's value first hand, but you must do so in order to make it a truly effective investment. You decide the payment scheme, and you determine the level of risk by screening borrowers. No piece of paper goes over your desk without being examined and figured into the deal. You have total knowledge and control within the boundaries of the law.

Naturally, close management requires responsibility. You'll need a real estate lawyer, thorough knowledge of the property and the ability to screen borrowers for reliability. You'll also need to stay on top of the note to ensure that both you and the borrower meet your obligations – typically, borrower payments, services the lender agreed to perform to bring the property to contracted standards, and the due diligence needed to keep all arrangements legal. None of this should be too difficult if you have the legal expertise in place. Nevertheless, you always have the option to cash out a well-organized seller-held mortgage note. All you have to do is sell your note to a qualified buyer. Contact us for a mortgage note quote.