Your Guide to Investing in Mortgage Notes and Trust Deeds

As long as you have an account with a valid bank or financial company, you can make money by investing in mortgage notes and trust deeds. Best of all, the process is a lot simpler than most people think. Your first step is to get some kind of documentation, usually a title to the property you are purchasing. This can be done with the county clerk or recorder in your area. This is also where you will go to document the buying or selling of mortgage portions. Your account will maintain interest on the mortgage note and will receive money as the terms dictate. You can also buy discounted notes and real estate purchase options as well. To do so, you just need to write a Buy or Sell Direction Letter for Real Estate Notes. Constructing this letter is very easy, but you should make sure to read through the guidelines on the form carefully. One small mistake can cost you a lot of time and money.
Some people prefer to use title or escrow companies to help the process along. If you choose to go this route, you will need to pay careful attention to the instructions as they pertain to each account document. Just be aware that each company is different, and you’ll need to be sure you know how yours works and that you’re following directions correctly. Make sure that you go with a company that accepts emailed or faxed copies of documents up front. You’ll have to provide the hard copies later, but companies that function in this way save a lot of time and hassle.
The bank or financial institution you are working with will need to have a copy of any and all loan documents before the loan will be funded. Most will not provide any money until a loan package with a trust deed, trust note, title insurance, and vesting are in hand. You may choose to use a third party servicer, who will also require full loan documentation. A servicing agreement that fully describes the note will be necessary as well.
Once everything is order and funding has occurred, your payments will be automatically deposited into a FDIC insured account. Pay downs, when applicable, will show on bank account statements. If note payments are not received on time, you and the servicer will be responsible for collections. In the event of a foreclosure, this is also up to you. So make sure that you keep on top of payments and stay informed during the entire process. Also be aware that the servicer is responsible for necessary regulatory reporting.
That’s really all there is to it. If you follow these steps carefully, you can make a lot of money from your investments. If you require help at any time, seek the advice of a lawyer or a financial advisor whom you can trust. Keep yourself informed and involved at all times during the process, and there should be no unwanted surprises. Instead, you can just enjoy your sure-to-be-successful financial venture.

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