Mortgage Assignments: How you can make more money and contribute to the economic recovery by offering valuable solutions to your clients. Provided by Kaleb Coberly with Yes Investment Solutions, L.L.C

Yes Investment Solutions, L.L.C.  I’m no big shot.  I just create win-win solutions where none were evident.  My company is founded on the vision of greater financial freedom for those that seek it.  I specialize in real estate investment: wholesaling, lease options, mortgage wraps, and mortgage assignments.

What’s a Mortgage Assignment (MA)?  Simply put, it’s buying a property “subject to” the existing financing.  Ownership transfers to the buyer, who makes payments on the seller’s loan, which stays in the seller’s name.  As I work these deals to acquire rentals subject to existing financing, sometimes I might decide to assign my interest to another buyer instead of buying the property myself.

Before further detail, what’s this got to do with you?  Imagine monetizing all those dead leads of buyers who don’t qualify for traditional financing.  How about selling more properties faster?  Help your clients avoid foreclosure or short sale by giving them more options.  Help people own a home and rebuild their credit.  How about picking up some investment properties for yourself?

Selling “Unsellable Homes” to “Unloanable Buyers” Unsellable Homes  Homes with little to negative equity  Sellers often facing foreclosure or short sale  Seller (or 3 rd party) can not or will not price to market  An MA option will increase the chances of selling Unloanable Buyers  Buyers who can’t get traditional financing these days  Can make payments  Have money to put down (skin in)  Buying terms not price  Will be happy to take on an MA property

MA: The “Least Worst” Option  People facing foreclosure these days have limited options, especially since they probably have little or negative equity.  Foreclosure: lose house; ruin credit for 7-10 years; still liable for deficiency  Cash purchase: not for full value, so seller must bring a ton of money to table.  Loan Mod: go for it, and good luck with that!  Short Sale: still ruin credit for a few years; takes 3-6 months or more; 50% chance of foreclosure anyway

“Least Worst” Option cont’d  Mortgage Assignment:  Sell house in 1-3 months or less  Highly increased chance of selling (owner financed is a seller’s market)  Decreased risk of foreclosure  Payments being made build credit, for both buyer and seller  Little to no cost to seller  No deficiency, sell for what is owed  Note: there are variations on this transaction structure that I also specialize in, such as mortgage wraps and lease options. I offer these if the situation warrants their unique benefits, however MAs are simply more elegant.

There are risks…  Due on sale clause may be triggered, but it’s not likely. What bank is going to call a loan due if it’s performing? Seriously.  May affect debt to income ratio of seller, but they are avoiding the much more serious credit problems of default and foreclosure.  Worst case scenario: Buyer may default, in which case the seller may take the property back and is right back where she/he started. The seller has successfully avoided foreclosure for some time. We can do another MA, or the defaulting buyer can sell before the original seller has to even deal with it—which shouldn’t be too hard since by then there is likely to be more equity.  Buyer default isn’t as likely because they put a substantial amount down to get into the house. Plus, they provided the seller with their financial statements demonstrating that they are capable of making payments.  Bottom line: It’s still the “least worst” option.

Buyer Benefits  Lots of good people who can afford a home can’t get a loan right now (e.g. self- employed, those with new jobs, immigrants). Now they can own a home anyway.  Here is a chance to build credit by showing they can make payments. (This will help them refinance if that is a condition the seller demands.)  No longer throwing money away on rent, they are out of the rental trap!  They can participate in the American Dream and build their net worth with what is commonly a family’s best investment.

MAs: What the market needs.  MAs require motivated sellers with little to negative equity and buyers with few financing options. There is a market for them:  I don’t need to tell you about the glut of foreclosures still coming down the pipeline, the slump in home values, and the tight lending environment for you to see how many leads there are out there right now.  This is the perfect window for MAs, not only because there is a market for them, but also because they will help move the market forward out of this slump:  MA sale prices are for what is owed, which is higher than short sales, auction sales, and REOs. So, MAs support and raise market values.  MAs make bank assets perform again, cutting down on foreclosures.  Combine that fact with the fact that more homes sold as MAs would mean less relative homes sold with traditional financing, and you might see lenders loosen their purse strings a little, stimulating the economy.  So, MAs = more sales + higher home values + less foreclosures + less bail outs + “natural” economic stimulus = more wealth for everyone

Here’s what I want you to do  If you’re seeing this, you’re probably in the real estate or finance industry somehow (e.g. realtor, mortgage broker, landlord, other investor, credit repair specialist).  Consider making referrals to me, both buyers and sellers, and get paid on the leads I close.  Or, you might want to consider getting in on the action by doing what I’m doing. That’s great! It’s a team sport, and there is plenty to go around! The more people doing this the more success we’ll all find. I’d be happy to show you how I do it. I have an amazing automated system that you can make your own!  Call or ;  If you’re a realtor, I want to talk more with you right now, because you can really take advantage of what I’m doing, and you know how I feel about win-win situations.

Realtors: The Combo  MAs, mortgage wraps, and lease options are great options for listings that have been on the market for a while, and/or for sellers (and 3 rd parties) who can’t or won’t price to market.  Along with any of your listings that you want to move faster, consider offering an MA with Yes Investment Solutions to your short sale clients.  Now you have 2 ways to avoid foreclosure. When you open the property to an MA alongside a short sale, you drastically increase your chance of getting paid. Whichever goes through first is what will get you paid.  You have a whole new market to tap into—a seller’s market!  You have a faster way to move properties, which means more sales.  You have a unique offering, a solution that most other realtors are not offering because they don’t even know about it!

Realtors: plug in your listings!  As I add more and more professionals and investors like yourself to my network that means more and more buyers and sellers, which means more and more sales for everyone!  I have a growing network in our community and beyond, and I have an online platform that automates the match-making process with other investors also doing MA.  My buyer website draws in new buyers everyday, buyers that you’re missing out on if you’re not doing MAs with me.  Heck, do your own MAs, and we’ll match our buyers and sellers together! I can set you up with the system.  Here’s how you’ll make more money doing MAs…

Here’s how you’ll make more $ doing an SS/MA combo plan Short Sale alone  50% failure rate  3-6 month average  Negotiation w/ lenders is work!  Only one successful outcome to a coin toss MAs  95% success*  1-3 month average*  I do most of the work, which is just sales, contracts and disclosure  Another successful outcome is brought to the table—increased odds! *According to Phil Groves, Love America Homes. Groves has been doing MAs for several years.

More $ cont’d  Because the buyer generally covers all the closing costs, including realtor commissions, and because my fee comes from the buyer, and because I want to bring more buyers and sellers to the table, I ask realtors to take a 2% commission on my MA deals with their listings.  Here’s why that still means more money for you:  Taking into consideration the benefits to your clientele, the higher success rate of MAs, the faster turn around, the lighter work, and the better odds of having another paying alternative to foreclosure, the benefits to your bottom line should be obvious. But, let’s do a hypothetical analysis anyway…

More $ cont’d  Yearly income = average home price x commission x success rate x number of deals you could do in a year if you only worked one at a time (i.e. turn around time) x the number of deals you can handle at one time  Let’s compare short sales to MAs. I’ll be generous with short sales and conservative with MAs concerning their estimated success rates and turn around times. I’ll leave the number of concurrent deals the same, even though I think you could handle more MAs at a time than short sales. Also, I’ll leave the average sales price the same, even though your MAs are going to sell for higher than your short sales because MAs are selling for what is owed.  Short sales: $225,000*.03*.6*3*5 = $60,750  MAs: $225,000*.02*.8*4*5 = $72,000  You could justifiably raise the price, success rate, and turn around time of MAs in the example, doubling the estimate.

Let’s do this!  You’re probably already thinking of all the houses and buyers that you could turn into MA deals.  And, you probably have a lot of questions and comments about MAs.  Call or me so we can work out how best to work together. Kaleb Coberly