Note Note
Posted on Thursday, February 26th, 2004 at 6:10 pm
4 Mistakes To Avoid When Managing Your Owner Financed Mortgage Note
With the crash of the real estate market and complete pendulum swing in requirements to qualify for a mortgage, many home sellers are resorting to owner financing in order to move their property. Once the sale is completed, the seller now has in their possession a valuable financial asset. But managing an owner financed note is hardly a skill most home sellers possess or is taught in school or anywhere else today. As a private note buyer I get calls daily from note sellers wanting to sell a note that haven’t managed their asset as well as they should. Some of the mistakes can make a note un-sellable, or at least for a discount they can accept. Below are the 4 biggest mistakes I see on a daily basis.
- Not monitoring whether the borrower is current on their property taxes – In a worse case scenario, this mistake could result in a total loss if the home were foreclosed on my the local municipality and sold off before the note holder even knew it.
- Not insuring that the buyer is current on their homeowner’s insurance as well as has sufficient coverage – If the borrower let their insurance coverage lapse and had a fire, the note holder could again end up with a worthless note. Note holders should not only monitor the borrowers insurance coverage but should be sure they are on the policy as the mortgagee.
- Not physically monitoring the property – Many property sellers no longer reside in the city the property they sold and owner financed or they live across town. As a result, they rarely if ever drive by the home which is the asset supporting the note they hold. What can and has happened on many occasions is that the borrower may have moved out and is renting the property out to a friend or family member who has a lot less incentive to maintain the property. This could also cause problems if a major insurance claim were made since the property is no longer owner occupied, requiring a different insurance policy.
- Allowing the borrower to pay their mortgage in cash each month – If the note holder never needs to sell their note, this may not be a big deal. However, if the note holder ever needs to sell their note, they will not have proof of the servicing of the note. This makes a note worth much less and giving the borrower a receipt will not suffice.
There you have it, four mistakes to avoid in order to a) protect the value of a private mortgage note and b) make the note worth more money if you ever need to sell it.
About the Author
Ron Stone owns a note buying business, buying private mortgage notes. Learn more about mortgage note buying and selling at his websites at Mortgage Buyer and Sell Private Mortgage.
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$5 NATIONAL GOLD BANK NOTE SACRAMENTO PCGS XF SERIAL #1 $1,000,000.00 |
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Championship Note! Sam Houston Note 1837/38 Govt of Texas $10 Bill Uncirculated $500,000.00 |
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same numbers on two notes of the same denomination $180,380.00 |
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HUGE COLLECTION ROSA PARKS MEMORABILIA PERSONAL ITEMS CHECKS BILLS RECORDS NOTES $150,000.00 |
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1966 Australia $1,$2,$5,$10 & $20 Specimen note .UNC $150,000.00 |
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VLADIMIR ILYICH LENIN – AUTOGRAPH NOTE SIGNED $110,000.00 |
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3 CONSECUTIVE FR 351 1891 $1 STANTON TREASURY NOTES $100,000.00 |
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$20 1869 RAINBOW CGA GEM 67 EYE POPPING FULLY BRIGHT DREAM NOTE $85,000.00 |
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GEORGE WASHINGTON – AUTOGRAPH NOTE SIGNED IN TEXT $80,000.00 |
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“MARSHALL” 1918 Federal Reserve Note $500.00 Large FINEST IN COLLECTOR HANDS $72,160.00 |
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1907 $1000 Gold Certificate Fr. 1219 and Fr. 1219d – 2 notes!! $70,000.00 |
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INDIA 1000 P12C 1928 GEORGE V RARE KEY TAYLOR SIGN NOTE $69,999.99 |
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$10 NATIONAL GOLD BANK NOTE SAN FRANCISCO PCGS VF25 WOW $65,000.00 |
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625 DIFFERENT WORLD BANK NOTE RARE COLLECTION 100 SETS $59,999.99 |
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HONG KONG CHINA $500 P179 1935 HSBC RARE SPECIMEN NOTE $59,999.99 |
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Audio Note Kondo Kegon KSL amplifier $56,000.00 |
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JEFFERSON DAVIS – AUTOGRAPH NOTE SIGNED $50,000.00 |
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TT 1869 $50 LT RAINBOW NOTE RARE FR # 151 PCGS 30 $46,500.00 |
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ARGENTINA 1000000 1,000,000 PESOS BILLION P310 1981 MARTIN NOTES 1,000 1000 PCS $39,999.99 |
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MOSES AUSTIN – PROMISSORY NOTE SIGNED 02/11/1802 $30,000.00 |
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HENRY DERINGER – AUTOGRAPH NOTE SIGNED CIRCA 1833 $30,000.00 |
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25 MILLION IRAQI DINARS IN 25K NOTES M/C & VISA OK $28,755.55 |
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JOHN HANCOCK – AUTOGRAPH NOTE SIGNED 06/07/1772 $28,000.00 |
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Set of 9 Republic of Texas Notes 1839 to 1841 * Graded * $27,500.00 |
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TT 1880 $50 LEGAL TENDER NOTE FR # 161 PMG 65 EPQ GEM 2 OF 2 SEQUENTIAL S/N $27,000.00 |
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INDIA 50 R.P9 1930 KING GEORGE V CALCUTTA RARE KEY NOTE $25,999.99 |
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INDIA BRITISH 500 RUPEES PA18F 1907 CAWNPORE UNIFACE RARE NOTE $25,999.99 |
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PCGS CERTIFIED 1896 #1 SILVER CERTIFICATES CONSECUTIVE EDUCATIONAL NOTES $25,000.00 |
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Dwight Eisenhower Handwritten Note as President. Rare $25,000.00 |
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WILLIAM J. “BILL” CLINTON – AUTOGRAPH NOTE SIGNED $25,000.00 |
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WILLIAM J. “BILL” CLINTON – AUTOGRAPH NOTE SIGNED $25,000.00 |
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RUGBY WORLD CUP – Original Coach Notes from 2007 RWC – South Africa vs England $24,745.00 |
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TT 1890 $20 TREASURY NOTE ORNATE BACK RARE FR # 374 PMG 55 RED SEAL $22,500.00 |
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1899 $5 FR-275 Chief Silver Certificate Note! TOP POP PCGS 67PPQ “The Only One” $22,500.00 |
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Raymond Pettibon “With His Notes at His Elbows…” Original Drawing 1989 $22,000.00 |
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TT 1880 $50 LEGAL TENDER NOTE FR # 161 PMG 64 1 OF 2 SEQUENTIAL SERIAL NUMBER $21,500.00 |
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ERNEST “PAPA” HEMINGWAY – AUTOGRAPH NOTE SIGNED $20,000.00 |
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SAMUEL L. “MARK TWAIN” CLEMENS – AUTOGRAPH NOTE SIGNED CIRCA 1892 $20,000.00 |
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UNITED STATE SENATE NOTE AND BOOK SIGNED BY J F KENNEDY $20,000.00 |
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INDIA 1 RUPEE P1 1917 KING GEORGE V RARE UNC BOOKLET 25 PCS BANK NOTE $19,999.99 |
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SAUDI ARABIA 10 RIALS P1 1953 ARAB UNC FIRST NOTE RARE $19,999.99 |
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CANADA $1 P84 1967 QUEEN COMEMORATIVE UNC NOTE 1000 PCS $19,999.99 |
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INDIA 50 RS.P9 1930 KING GEORGE V BOMBAY RARE KEY NOTE $19,999.99 |
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INDIA BRITISH 50 RUPEES PA15B 1916 UNI FACE UN-RCORDED RARE BANK NOTE $19,999.99 |
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CHINA HONGKONG MACAU 10 YUAN 2008 BEIJING OLYMPIC UNC NOTE 10 PCS $19,999.99 |
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US FR 289 $10 1880 SILVER CERTIFICATE CGC 53PQ “BLACK BACK” MORRIS Note $19,500.00 |
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$100 2006 FRN==STAR NOTES==original pack==100 consec==GEM CU —————– $18,995.00 |
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Marbled Border $20 Note,Continental Congress, 5/10/1775 $18,950.00 |
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AUSTRALIAN STAR NOTE COOMBS/WATT 1949 10 TEN SHILLING BANKNOTE AUSTRALIA $18,311.30 |
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KD 1914 $100 One Hundred Dollar Bill Fr 1104 PCGS 67PPQ FRN Federal Reserve Note $17,955.00 |
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INDIA 50 R.P9 1930 KING GEORGE V CALCUTTA RARE KEY NOTE $16,999.99 |
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TT 1890 $20 TREASURY NOTE ORNATE BACK RARE FR # 374 PCGS 45 PPQ $16,950.00 |
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$5 1891 TREASURY COIN NOTE PMG 64 EPQ SERIAL #5* $16,500.00 |
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36 note MIDI Rosewood Marimba automated – USB out from any PC or MAC $16,450.00 |
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RUTHERFORD B. HAYES – AUTOGRAPH NOTE SIGNED $16,000.00 |
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JOSHUA L. CHAMBERLAIN – AUTOGRAPH NOTE SIGNED $16,000.00 |
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INDIA BRITISH 500 RUPEES PA18F 1907 KING EDWARD CAWNPORE UNIFACE NOTE $15,999.99 |
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1928 $1000 Gold Certificate Note Bill PCGS VF 25 $15,500.00 |
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Federal Reserve Note $2 1918 Solid Number C55555A Fr.753 Philadelphia PCGS 65PPQ $15,000.00 |
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JOHN “DUKE” WAYNE – AUTOGRAPH NOTE SIGNED $15,000.00 |
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Uncut sheet of 16 $20 Bills 2004A Star Notes SUPERB GEM NEW 67PPQ GA00000136* $15,000.00 |
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AUGUSTE RODIN – AUTOGRAPH NOTE SIGNED $15,000.00 |
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EMPEROR NAPOLEON BONAPARTE – MANUSCRIPT NOTE SIGNED $15,000.00 |
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KD 1928 Boston District $1000 One Thousand PMG 30 Federal Reserve Note FRN MONEY $15,000.00 |
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Fr.122m $10 1901 “Bison” Legal Tender Mule Note PCGS GEM New 66 PPQ POP 1/0 $14,995.00 |
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1934 $1000 ONE THOUSAND DOLLAR BILL FEDERAL RESERVE NOTE FRN PMG GRADED MONEY $14,500.00 |
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c. 1900 Queen Anne Curio w. Handwritten Note of Origin $14,500.00 |
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30 note MIDI Rosewood Marimba automated $14,450.00 |
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86+6 CONSECUTIVE UNC $10 COA TEN DOLLAR PHILLIPS RANDAL AUSTRALIA NOTES CV$21160 $13,856.21 |
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AUSTRALIAN STAR NOTE COOMBS/WATT 1949 1 ONE POUND BANKNOTE AUSTRALIA $13,609.75 |
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AUSTRALIAN STAR NOTE COOMBS/WATT 1949 1 ONE POUND BANKNOTE AUSTRALIA $13,609.75 |
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TT 1869 $10 LEGAL TENDER RAINBOW NOTE FR# 96 PMG 65 EPQ $13,500.00 |
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New Hampshire a Poem With Notes and Grace Notes by Robert Frost (signed by Him) $13,500.00 |
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1954 Bank of Canada $1000 Devil’s Face Bank Note PCGS Graded AU-55 B104 $12,782.69 |
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BRUNEI $10000 2006 SINGAPORE HIGHEST DENOM.POLYMER NOTE $12,999.99 |
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SINGAPORE $10000 P44 1999 BRUNEI COMPUTER CHIP UNC NOTE $12,999.99 |
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Australia 1993 $5 Fraser Evans 100 NOTE BUNDLE UNC Retail $14,000 $12,866.41 |
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TT 1891 $20 TREASURY NOTE FR # 375 PCGS 58 PPQ GEM APPEARANCE!!! $12,950.00 |
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Rare 1934 $1000 One Thousand Dollar Star Note Bill, KC District, PMG EF 40 EPQ $12,750.00 |
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TT 1890 $2 TREASURY NOTE SCARCE FR # 354 PMG 30 LARGE BROWN SEAL $12,500.00 |
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Meeting notes from the Susquehanna Co from 1768-1773 forming Wyoming Valley, PA $12,500.00 |
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MARTIN VAN BUREN – THIRD PERSON AUTOGRAPH NOTE 02/21/1821 $12,500.00 |
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1934 $500 St. Louis Star Note PCGS VF 20 Rare 3 Known! $12,500.00 |
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American Bank Note Company Annual Reports $12,500.00 |
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1882 Boothbay Harbor Maine Date Back Bank Note, 2nd Chtr., 1 of1 Known $12,500.00 |
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JOHN S. “RIP” FORD – AUTOGRAPH PROMISSORY NOTE SIGNED $12,500.00 |
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TT 1890 $2 TREASURY NOTE SCARCE FR # 355 PMG 45 EPQ & PCGS 45 PPQ $12,500.00 |
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