Free Teleseminar This Wednesday

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Hi ,

 

    Sandor Lau's article Case Study of a Defaulted Note Purchase is below.

 

   Mark your calendar and join us this Wednesday, Nov. 12 for a free teleseminar with Kevin Cordell, president of Madison Management Services, LLC.  

 

   MMS is a private mortgage investment and servicing company that focuses on acquiring distressed mortgages nationwide.   It  was founded by Kevin Cordell, a veteran real estate and note investor. As an investor himself, Kevin created MMS to serve the needs of other investors.   MMS provides servicing, subservicing, asset management, loss mitigation and REO Management for investors of residential mortgages.

  

   It starts this Wednesday, Nov. 12 at: 

6 p.m. Pacific Time

7 p.m. Mountain

8 p.m. Central

9 p.m. Eastern 

 

   We'll take your questions live. When it starts in your time zone, call 605-562-3140 and when prompted enter the code 794728# 

 

   This will not work on Magic Jack or other VOIP systems. It will work on cell and land lines.  

 

Cheers, 

 

Bill 

 

W. J. Mencarow

President, The Paper Source, Inc.

www.PaperSourceOnline.com

www.PaperSourceSeminars.com

 

P.S.  This Friday, Nov. 14 is your last chance to get the final discount for The Paper Source training on non-performing notes Nov. 20-22 in Las Vegas.  Go to 

or call 800-542-2270 for information. 

 

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The House: 3 bed 2 bath, 1,750 sq. ft., built 1999, value $130k

 

1st Note: $83k, performing, $47k in equity, $500/month payment

 

2nd Note: $46k principal balance, unpaid since 2011, $10k late fees

and arrearages. Purchased June 2013 and received Oct. 2013.

 

Cost of 2nd: $7,000. This is about 15% of the value of the note,

not including arrearages. 

 

Borrower: The lady (we'll call her "The Georgia Peach") and her family 

had income but struggled with managing it and wanted to keep their home.

 

The Workout: $800 loan fee and about $500 a month, amortizing on a

15 year schedule at 8% interest with a five year balloon. We added

her fees and arrearages to her principal balance so the new note is

for $56k. Workout completed Oct. 2013. My company, Stewardship

Capital, which bought the note, should have our initial investment

back in one year. Stewardship can keep the note and collect

payments or establish a payment history and sell as a reperforming

note in six months to a year for 70-80% of face value. If we keep

and collect payments for the five year term of the note, we collect

$32k in payments and she still owes $44k as a balloon payment.

 

The Story: Stewardship Capital purchased this nonperforming second

note on a bread and butter 3 bed 2 bath house in the country

outside of Atlanta, Georgia. We sent a mailing by Fedex, left a few

messages and the Georgia Peach called us.

 

She acknowledged that she and her family had not managed their

money well. They got involved with a debt settlement company that

did not serve them well and she and her husband had their wages

garnished. They were paying about $500/month on their first

mortgage and $600/month on their new car.

 

They have lived in this home since building it in 1994 and wanted

to stay. They are raising two teenage daughters, one of whom starts

college in fall 2014. They had $47,000 of equity in the house and

Stewardship could have turned a solid profit by foreclosing and

selling or keeping as a rental. But foreclosure is not our goal,

only a last resort when borrowers refuse to communicate.

 

The Georgia Peach submitted her application materials, bank

statements, pay stubs and other financial information. Her husband

has a pension of over $3,000/month and she and her husband both

work only part time. The family has a gross monthly income of

$5,500.

 

Their problem was not lack of income, but poor money management and

she acknowledged that and took responsibility for paying her debt.

The family had virtually no savings and could not pay the nearly

$10,000 in late fees and arrearages all at once as most banks would

require to bring the loan current. Stewardship added those to the

principal balance for her to pay over time.

 

Initially, Stewardship negotiated an $800 monthly payment for the

first year of the loan and $500 thereafter to allow extra money

each month to go to her oldest daughter's college expenses in fall

2014. We later reduced the payment to $500 for the full term of the

loan in order to set the borrower up for success. We do not want to

revisit the contract or renegotiate later. We want to create an

agreement that the borrower can comfortably keep.

 

We also provided the Georgia Peach with a little help in money

management, giving her a book by Dave Ramsey, a well-known personal

finance expert who is also from the South. We helped her analyze

her monthly bank statements that showed she is spending an average

of $500/month on overdraft fees which she is working on addressing.

We also pointed her toward the US Treasury Department's Hardest Hit

Fund in Georgia who may provide assistance in paying her first

mortgage.

 

Now we have a win-win solution where Stewardship Capital gets an

excellent return in monthly payments and the borrower gets to keep

her home. It's a sweet deal for everyone.

 

   Sandor Lau of Stewardship Capital will teach you how he buys defaulted 

available to sit down with you for a complimentary consultation.  Visit

 

   Stewardship Capital will also sponsor a post-seminar hike, but you have to sign up in advance.  See www.StewardshipCapital.com for details.