A note is a signed paper that says a borrower owes money to a lender. The paper also has the rules for the loan that both sides must follow. These notes can be either: 

• Secured: if the borrower fails to repay a debt, then the lender has the right to seize a collateral (such as a house).

• Unsecured: no collateral is attached to the loan.

• Performing note: the borrower is making payments on-time as outlined in their loan agreement.

• Non-performing note: the borrower is at least 90 days behind on their regular payments.

• Re-performing note: the borrower resumes regular payment after a 90-day delinquency. After 12 months of timely payments, the note is once again classified as Performing.

A mortgage is a loan agreement between two people: the one who borrows and the one who lends. 

A trust deed is similar, but it has a third person: the trustee who keeps the property’s legal ownership. 

Both a mortgage and a trust deed are used to make sure a real estate deal is safe. Some States prefer a mortgage and some prefer a trust deed.

A bank can sell a mortgage for different reasons, but the main one is that the borrower is not paying on time (this is called a non-performing note). 

Banks usually group these debts together and sell them for much less than they are worth. 

Sometimes, banks also sell notes that are performing well. This is when the bank has made a lot of money from interest payments and they need their money for something else. These notes are often sold to other banks, lenders or investors for a little less than they are worth.

In practice, mortgages are very similar. 1st Mortgage and 2nd Mortgage are just names that show the order of recording the mortgage paper in the County Recorder’s office.

A 1st Mortgage is a mortgage paper that is recorded in the county records first, before any other mortgages that are not paid off yet.

Mortgages that come after this are named 2nd and 3rd mortgages, and so on.

When a property is taken back by the lender, the 1st mortgage is the first to be paid. Any extra money goes to the other mortgage(s) that are recorded, like a 2nd mortgage.

Based on my experience notes are safer than putting money in stocks or real estate. My notes have strong backing from valuable assets. 

You can buy these notes for less than what they are worth—less than the remaining amount of the notes—which makes them less risky. 

When you buy a note, I suggest you pay no more than the value of the property that supports the note.

When you invest in notes that are safe and doing well, you get money from interest every month.

Note investors usually get funds from credit lines on assets, cash reserves or retirement plans (like IRAs). 

Some people also decide to partner up with relatives or friends, so they can combine their money to buy notes.

Notes and real estate have similar returns on investment. 

But notes are better than real estate because they have less costs and hassle. With notes, you don’t have to deal with renters, bugs, fixes and other duties of a property owner.

You can do different things depending on the situation. First, you need to look at your financial goals and talk to the borrower about their choices.

Then, I will help you plan how to achieve those goals. For example, you can contact the borrower and change the note’s rules (this will let them keep the property). 

Or, you can start a foreclosure and sell the property with a realtor’s help. I’ll keep you informed along the way.

Every State, and sometimes every county in a State, has different laws that say what a note holder can do, and how to do a foreclosure. 

We have a team of foreclosure lawyers across the country who know these laws well. So, if your borrower does not pay and you want to do a foreclosure, we and our team of lawyers will take care of everything for you. 

Remember that the foreclosure time can be from 60 days to 2 years, depending on where the property is. Also, foreclosure fees are usually between $1,500 and $5,000. This depends on the laws of each place too. 

NOTE: foreclosure is not the only thing you can do when a borrower does not pay. We will tell you all your choices so you can pick the best one for you.

To start working with me, please book a first meeting with me through the 30-Minute Meeting with a representative of Etazh Organization LLC. This will be a personal, half-hour minutes call where our specialist can learn more about your goals and you can get answers to any questions you have.