This is the second in a series of posts about selling your mortgage note.
At this point, you’ve decided that selling the note is right for you. You’ve shopped your note to several prospective buyers and compared their offers. You’ve made sure that these buyers are legitimate and free of complaints.
Now the burden of the work is on you. You will have to assemble a comprehensive portfolio of documents and information to satisfy the seller that they’re doing the right thing. Get together:
The promissory note;
The mortgage agreement;
(Even though the terms are often used interchangeably, a promissory note and a mortgage are not the same. A promissory note spells out the actual terms of the loan, i.e., a certain amount of payments at $X at an interest rate of X%. The mortgage actually pledges ownership in the property as security for payment of the promissory note.)
The original amortization schedule on the note;
Evidence of the payor’s payment history to date, including documentation to support the payor’s employment and creditworthiness;
Information on any third party you have used to collect payments on the mortgage;
Proof of a current hazard insurance policy in force on the property;
Proof of clear title to the property, including title insurance, and;
Proof that real estate taxes on the property are up-to-date.
Expect that the prospective buyer will be doing due diligence of his own. He will check the title to the property and the creditworthiness of the payor. He will also likely do some sort of appraisal of the property. Some mortgage note buyers limit their purchases to property worth over a certain amount, or limit their purchases to certain types of property, such as modular homes.
Like any other major sale, you should consult with an attorney to make sure the sale agreement, and all of the underlying documents, are in order.
Once you and the buyer are satisfied with the condition of the property and have reached an agreement to sell, there will be a closing, much like a closing to buy a home. This might occur in person, but can also be done via express mail. The most important document in this arrangement, however, is the Assignment of Mortgage, which officially turns the payment stream over to the buyer. Again, check the terms of this document to make sure the seller has not changed the deal from the original offer.
If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.
