Here’s why I don’t do that. I received an email yesterday from a broker I’m working with. It was from a senior manager at Nat City Mortgage, saying they’re selling in $100-200M pools.

Up until yesterday, I didn’t think Nat City Mortgage sold notes, but I couldn’t be certain, only because the last time I’d contacted them was at least 8 months ago.

That’s why, when you mentioned you were chasing a note held by Nat City Mortgage, I didn’t tell you that they didn’t sell. I honestly wasn’t sure if their policies had changed.

Times change. Nat City was written up in the NYT the other day in an insightful article titled: “Regional Banks are Rocked”. And now they’re selling large pools.

You’re good at the direct sell – go ahead and call this senior manager up directly and maybe you’ll be able to buy that Nat City loan regardless of what your own rep told you. (See the Hector story below)

My list of banks that sell (which I’ve confirmed) might be only 20 banks long. Does that mean that I know that only 20 sell? Obviously not. It merely means that I’ve spent time developing only those 20. And I know of another … probably 20 … that don’t sell.

But here’s the catch that I want you to understand. They’ve said “No” to me.

As my mentor taught me. No means “No” today.

Other challenge I see: Someone like you reads a list I put together and thinks: “so I won’t try X or Y or Z because Dean doesn’t have it on his list.” And you miss a perfectly good opportunity right there in your backyard.

I’ll teach you and everyone else everything I know. Getting a relationship, however, is something I want you to do.

It’s when people like you take the initiative to break through to new banks that you actually progress. I know you’re frustrated and tired. I can’t help that.

I can only defend my actions as justified given the strategy I pursue with banks, and that I share with you and with everyone.

No means “No” today. Remember that. It’s like the highschool hotties you chased after. You didn’t turn around after getting turned down just once, did you?

Another example – I thought Chase didn’t sell to small guys. In fact, I worked at Chase and spoke with the SVP Legal Counsel in 2004 re: getting approved to buy from Chase. He told me there were 12 approved buyers. All of them big boys. I found out three weeks ago that there’s a small potato named Hector cherry-picking single loans from Chase out of Florida. A buddy of mine tells me that he sends gifts to this one collector he works with, and somehow gets all his single loan purchases approved.

The rule is simply that … there are no rules. That’s the simple explanation. Selling notes isn’t exactly a regulated activity – it’s not like originating, and it’s certainly not regulated the same way.

Probably not the answer you were looking for, but an explanation of the way I operate on this very specific point of giving out any kind of a “definitive list of banks that sell”.

There are many many more than you will know what to do with.

Dean

“If a had a list of banks that sold notes to individual investors I would just concentrate on them! “.

I totally agree. It is one thing to ask for someones private contacts but I don’t see any reason that you cannot say X Bank sells, Y Bank does not. I have invested a tremendous amount of time going up dead ends for the pleasure getting the “We are sick of your faxes and phone calls, We don’t sell notes, do a short sale and quite bothering us.” response.

Offering through a servicer, remember, is Option 1 of the 4 that I cover in the Finding Notes Course (minute 4:54 in Part 1 of Course#1 – which is free here http://www.notebuyingprofits.com/webinarfind.html).

Servicers are tricky – and you have 2 choices on how to get “through” them:
a) bushwhack your way to the appropriate manager in the Loss Mit dept who knows what a note is, first, and who has authority to submit an offer to the investor, second. Be prepared to fax your Auth to Release around, which is totally anathema to the note buying process but sometimes the only way you can bypass the lower ranks
b) figure out who the investor might be, and go direct to the investor. e.g. ASC is a captive servicer for Wells. SLS / Winter Group, Wilshire / Merrill. The last 2 obviously servicer for multiple investors, so even if you had a relationship with the Winter Group, the note might not be a Winter Group note. But that’s your 2nd option.

As to your 2nd question re: getting a note appraisal, there’s no way to “appraise” a note. Remember, here, what a note is – it’s a promise to pay back a large sum of money you get from a bank. The Note is then “secured” to a property by what’s called a Security Instrument (either a Deed of Trust or a Mortgage).

That Security Instrument is what says that IF the borrower doesn’t pay the Note back, then the Lender can come “claim” the collateral “secured” to that note.

So what do you want to appraise before buying a Note? The asset, or the object, that the Security Instrument secures to the Note you’re reviewing. In this case, it’s a property.

So replace the word “note” with the word “property” in your question above and you’re 100% correct.

The credit impacts on the homeowners credit if you are not linked into the major credit bureaus is huge because no “Settled for Less than Amount Owed” tag will show on the credit report.

Furthermore, there are options available once you own the note that are not available to a traditional short sale real estate investor. These include a) Working a short refi for the homeowner and b) restructuring the note and helping the homeowner bring it current.

I’m going to bring these points up in a future episode of The Short Sale Show at http://www.ShortSaleShow.com in the near future.