Buying and Selling Non-Performing Notes

Despite all the benefits of mortgage  lending, any experienced private investor knows that not every deal will be a success. Fortunately, there’s still a way to get out of bad loans without losing your entire investment: putting your nonperforming notes for sale on the secondary market. Buying nonperforming notes may yield fantastic returns for investors who are willing to take on more risk and do a little more work.

Whether you have assets to sell or you’re looking for assets to buy, AryMing Asset Funding will guide you toward the most favorable possible outcome. Read on to learn more about nonperforming notes and how we can help you take advantage.

What Is a Nonperforming Loan?

A nonperforming note is a mortgage loan in which the borrower doesn’t pay according to the agreed-upon terms. Generally, mortgages are considered delinquent when their borrowers are at least 90 days behind with payments.

Nonperforming notes are liabilities for the lenders who are losing money on the deals. Instead of working with the borrower to return a loan to good standing, which may be too expensive or time-consuming to be worth it, lenders can just get rid of the loan and recoup some of their losses by selling it to another private investor or putting it on the secondary market.

Why Buy Nonperforming Notes?

If a loan is performing so poorly that the original investor is selling it, why would anyone else want to buy it? There are several good reasons. For one, distressed loans are available at a steep discount, so buyers have more potential to earn big profits. The new investor also has more flexibility to help the borrower return the mortgage to good standing or let them out of their obligation in a mutually advantageous way—they could modify the loan terms, create a forbearance plan, or agree to accept a deed in lieu of foreclosure, among other solutions.

If the new investor can’t reach an agreement with the borrower after buying the nonperforming note, they’ll take ownership of the property instead. At this point, they can choose to sell the property, fix and flip it, rent it out, etc. Regardless of how the deal ends, private investors who are willing to accept a higher risk and endure a more complex process can receive very high returns.

Buy or Sell Nonperforming Notes Through AryMing

If you aren’t sure how to buy or sell assets on the secondary market, AryMing can help. We benefit sellers by purchasing notes in either the first or second lien position for reasonable rates, and we close deals quickly to relieve sellers of their nonperforming note obligation as fast as possible. If you’re looking for assets to buy, on the other hand, we give new investors a head start by working with borrowers to return their mortgages to good standing before they’re sold.

Contact AryMing About Nonperforming Notes

Private lenders hoping to either get out of a disappointing loan or explore a high-risk/high-return opportunity have the greatest chance of success when they work with AryMing. To inquire about selling or buying nonperforming notes, contact us.