“Golf is the closest game to the game we call Life. You get bad breaks from good shots; you get good breaks from bad shots – but you have to play the ball where it lies.”
__ Bobby Jones
“Golf is the closest game to the game we call Life. You get bad breaks from good shots; you get good breaks from bad shots – but you have to play the ball where it lies.”
__ Bobby Jones
A recent article from American Financial Network included this quote: “According to a new Survey from Freddie Mac, 34% of renters spend more than 1/3 of their income on rent, while only 25% of homeowners spend that much on their mortgage.”
Remember this data when you are negotiating with a borrower in a seller financed situation. If you can get the safest terms possible for yourself and keep the monthly payment at or below his current rent payment, you have a win-win for both parties.
A new report from CoreLogic.com shares these key findings:
According to new data from Black Knight, late mortgage payments have fallen to a nearly 20 year low. Just in the past year, they’re down 7.5%, and combined with foreclosure starts falling to a more than 18-year low, the improvement represents a major turnaround from where things were since the financial crisis and housing crash.
Source: America’s Financial Network, Inc. Newsletter, July 12, 2019, Diane Mohr, Loan Officer.
At a recent Note Industry Conference, an experienced note buyer stood in front of 500 attendees and asked: “Who extends credit to someone for 10-30 years without knowing much about them?”
The answer : “lots of people.”
Too many folks sell a property, agree to carry a note and don’t make the effort to strengthen their decision by getting to know who they will be dealing with for years to come. Carrying a note is a business decision and should be treated as such. How long has my buyer lived in the area? Does he have extended family in the area? What does he do for a living and how long has he been at his present job? What is his monthly income? Debt burden? What is his credit score and credit history? Who will be living in the property with him? Does his history indicate he is a responsible and trustworthy person? Does he exhibit pride in his personal appearance, condition of his car, etc?
Know your buyer before you tie yourself to him for the next 30 years!
The Inland Empire has experienced the fastest job growth among all of Southern California’s regional economies for several years running, and has outpaced the overall state in job growth for seven consecutive years, according to U.C. Riverside’s Center for Economic Forecasting & Development. This has led to a dramatic improvement in the local unemployment rate, now approaching 4%, a record low and tracking closely with California as a whole, the Center reported. While the Transportation and Warehousing/Logistics industry have been frequently touted for their job growth in recent years, Health Care, Food and Hotel Services, Construction and even Retail Trade have also made significant contributions.
News from Supervisor Robert A. Lovingood, June 13, 2019.
I recently had breakfast with a friend who is a very experienced Escrow Officer. While talking about some of her transactions and the issues she had to deal with, she quickly switched to seller financing and blurted out “Some people should not carry paper.”
What did she mean? The same thing we in the note business keep harping about. Poor due diligence. Poor terms. Poor documentation. Selling to buyers that should not be sold to. Essentially, jeopardizing the future security of the transaction.
When a note buyer buys a note, we inherently understand the potential risks in acquiring a note where other parties have agreed to terms that we will not change. As a result, we rely heavily on 3rd parties to confirm the original transaction and our pricing. We use credit bureaus, property appraisers, title companies, county property records, etc. This protects us, the note holder and the borrower by insuring the documentation is legal and secure. Unfortunately, some note holders do not apply the same degree of thoroughness and diligence when they agree to seller finance.
They may pay the price down the road!
After 11 years in the note business, I have learned that the simple answer to this question is: better use of the cash.
For business people, they will usually examine their options when looking for cash to make another investment or take advantage of a business opportunity. If the price for the note meets their expectation, they will sell. Otherwise, they will choose another option.
For non business people, the process may be the same, but the reason for selling will usually be different. Maybe the need is a big medical bill, buy a new car, buy a new home, etc. Usually, more personal.
My job is to provide an option and for you to decide if it fills your needs.
Lending for condo purchases has held relatively steady over the last few years at about 8% of total mortgage originations. Hotspots with a particularly high share of condo sales include Washington D.C. at 37% and Hawaii at 42%. With the delinquency rate of condo loans sitting about 2% lower than that of single-family homes, there could be room to loosen condo lending guidelines.
CoreLogic Insights Blog, May 6, 2019
CoreLogic is predicting 4.8% home appreciation nationwide in 2019. There are 10 Metro areas expected to have 10%+ appreciation, all in California. They are: #1 Chico – #2 Salinas- #3 Santa Maria-Santa Barbara – #4 Modesto- #5- Bakersfield – #6 Oxnard-Thousand Oaks- Ventura – #7 Sacramento-Roseville- Arden Arcade- #8 Vallejo-Fairfield – #9 San Francisco-Redwood City-South San Francisco- #10 San Luis Obispo-Paso Robles-Arroyo Grande.
CoreLogic Insights Blog, April 26, 2019