Launching into Note Buying
A Roadmap and Primer
1

Overview: Mortgages
• Wild market
• 50M Homeowners (assume 1 mtge/homeowner)
• $100K estimated avg mortgage size
• $5Trillion in mortgages
• Up to 10% non-performing (e.g. delinquent in some
way))
• $500B in non-performing mortgages
p g g g
2

Overview: Mortgage Derivatives
• Much larger markets
• Mortgage-backed securities
• CMO’s
• More $Trillions
• Credit Default Swaps (
p (unknown volume – AIG)
)
• Add in Credit Card, Auto … ALL potential targets
of a “government bailout”
government bailout
3

Conclusions on the Market
• Volume of default will far outweigh bailout $
available
• Key driver to default is home value depreciation +
employment
• Values still falling – Foreclosure volumes = leading
indicator 105K prime FC’s (July 08), 92K subprime
FC’s (July 08) – 10% gain from June 08
• Unemployment (up from 4 7% to 6 1% – Aug 07-
4.7% 6.1% 07
Aug 08 - 30% increase!)
• CA only (up from 5 5% to 7 7% - 40% increase!)
5.5% 7.7%
4

Opportunity
• Banks holding loans (“portfolio’ing” banks:
regionals, locals, FCU’s)
• “Non-targeted” institutions (To be determined)
• I tit ti
Institutions with lots of non-performing assets
ith l t f f i t
• Treasury – T A R P (Troubled Asset Resolution
T.A.R.P
Program)
• Possibly lots MORE activity (price discovery
discovery,
capitalization need)
• P
Possibly NEW sources (h d f d private
ibl (hedge funds, i t
equity funds, other “TARP Servicers”) 5

Opportunity (cont.)
(cont )
• The “last mile” always wins
• Baby Bells and POTS
The Last Mile in Non-Performing Notes
• You and your “local” area
• O You as the Workout Specialist
Or Y th W k t S i li t
6

How to Get Ready for the “Last Mile”
• It will take you no more than 8 weeks to get
“launched”
• Know how to Find Notes
• Know what Price to Offer in order to make a profit
• Know How to Close on a Deal
• Know What to Do Once You’ve Bought your first
Deal
7

The 8-Week Road To Launch
8 Week
• Week 1: Learn to use at least 3 desktop-based property
desktop based
valuation tools, and learn how to get the most out of
realtors.
• Week 2: Find out which vendors you can use to help
you research title work, and gain hands-on practice
“underwriting” (performing due diligence on) a note.
• Week 3: Learn the principles of negotiating bank notes.
Learn the steps in a bid process, how to maximize the
value of your bid, and how to beat out others bidding on
the same note
note.
• Week 4: Learn what it takes to actually “Close” on a
note – review the “closing” process, including the
principles of negotiating bank notes.
8

The 8-Week Road To Launch
8 Week
• Week 5: Learn the 5 Exit Strategies drill down through
Strategies,
examples of foreclosure from the point of view of the
bank (get the foreclosure process down pat).
• Week 6: Learn the basics of servicing a Note and of
taking a property back after a foreclosure (Real-Estate
Owned or REO).
• Week 7: Learn the 4 ways to find bank notes – and
start off by practicing using brokers, other investors, and
the shotgun approach.
• Week 8: Review Finding Notes, and tackle Source#4 –
Banks & Other Sellers. Sign up with an online note
broker to review complete data tapes; break through to
at least 1 bank that sells notes. Bid on at least 3 notes.
9

How to Get Going: Week 1
• Week 1 – Valuation Review & Assignments
• 1200 Hope St Denton TX
St, Denton,
• Realquest, Trulia, Zillow
• Plus – Realtors
• OBJECTIVE: Buying a Note and MAKING A PROFIT!
10

How to Get Going: Week 2
• Week 2 – Title Review
• Source Documents County Assessor (Taxes)
Documents,
• OBJECTIVE: Buying a Note and MAKING A PROFIT!
11

How to Get Going: Week 3
• Week 3 – How To Bid
• Lender is in bankruptcy
• Final assets being “disposed of”
• Lack of oversight / good asset management
• No active foreclosure, but loan is in default
,
• Good opportunity – solid market – 55 – 65%
• OBJECTIVE: Buying a Note and MAKING A PROFIT!
y g
12

How to Get Going: Week 4
• Week 4 – “Closing”, loan docs / purchase docs
• S th D
See the Document T lkit
t Toolkit
www.NoteBuyingProfits.com/toolkits.html
• OBJECTIVE: Buying a Note and MAKING A PROFIT!
13

How to Get Going: Week 5
• Week 5 – Exit Strategies & Foreclosure
• B f “E ti ”
Beware of “Exceptions” … review H
i Home E it
Equity
Foreclosure Texas
www.ExpertLaw.com
• Talk to the Seller – death in family, probate,
dispute between wife and brother
• OBJECTIVE: Buying a Note and MAKING A PROFIT!
14

How to Get Going: Week 6
• Week 6 – Servicing your Note
• T lk to a Servicer – PLM FCI, Note Servicing
Talk t S i PLM, FCI N t S i i
Center, Trust Accounting Center, SPS, SLS – how
do you service what does a contract look like?
service,
• OBJECTIVE: Buying a Note and MAKING A PROFIT!
15

How to Get Going: Week 7
• Week 7 – Finding Notes
Direct
Di t
• LaneGuide.com
• Y ll
Yellow PPages
• Network, network, network
Indirect
I di
• Brokers
• Title, Trustees
• OBJECTIVE: Buying a Note and MAKING A PROFIT!
16

How to Get Going: Week 8
• Week 8 – Find, Bid, Buy
• Y are READY!
You
• If you don’t have $ - refer to another Note Buyer,
y y ,
use the PAC Forum – post a note for sale, contact
us
• 1% Referral Fee, Trailing Revenues (6 months)
• If you DO have $ - then BUY
o ha e
• OBJECTIVE: Buying a Note and MAKING A PROFIT!
17

How to Get Going: Denton TX – the Plan?
• Buy, Re-Write or Foreclose
• $75 85K purchase
$75-85K h
• Reinstate – 18 months @ $1,088 plus monthly
, p y
• OR – foreclose (possible upside in equity)
• OR – refinance with borrower who qualifies for
new loan
• OBJECTIVE: Buying a Note and MAKING A PROFIT!
18

Call To Action - Your Opportunity TONIGHT
Call-To-Action
A-Z Profiting from Discounted Mortgages Business-
in-a-Box
in a Box’ – 16 hours+ of Video Training plus LOTS of
Training,
bonuses
www.NoteBuyingProfits.com/preorder.html
N B i P fi / d h l
19

Call To Action - Your Opportunity TONIGHT
Call-To-Action
SPECIAL FOR TONIGHT ONLY:
• Promo Code ‘700’ (to be filled in at the TOP
(
RIGHT of the order page where you put in your
CC info):
• 5% off of our package deal
• G d through 12
Good th h 12pm EST t i ht ONLY
tonight
www.NoteBuyingProfits.com/preorder.html
20

Call To Action - Your Opportunity TONIGHT
Call-To-Action
Fast Action BONUS:
• First three sign-ups g 60 days PAC for free
g p get y
(rather than 30)
• NOTE: This includes the ‘8-Week Roadmap , the
8-Week Roadmap’
23 pages of check lists, the Resources Section,
the DOCUMENT TOOLKIT, the basic ‘how to raise
money’ toolkit, and more bonuses…
www.NoteBuyingProfits.com/preorder.html
www NoteBuyingProfits com/preorder html
21

Next Week
How to Talk to a Banker
• Practice Conversations
• How to – Opportunity to Practice Yourself (3 lucky
participants)
• How to – I will give a few example conversations
(easy i t ’ and h d i t ’ )
( intro’s d harder intro’s)
• With our Banker … Saprina
22