We Get Note Sales.

We can assist in the purchase or sale of a single or a pool of loans.

 

 

 

Note Sales

Currently there is a thriving secondary market for note sales, offering benefits to both the seller and the buyer. These transactions offer a high potential rate of return if the parties enter the transaction with eyes open - watching for a good investment, and avoiding any potential pitfalls.

At Rosenberg Martin Greenberg, we have extensive experience in representing both sellers and purchasers of individual loans, groups of loans or large pools of loans to various third parties such as other banks, private funds or guarantors. In addition to representing note purchasers, we can quickly and cost-effectively put together a team of attorneys to perform due diligence regarding a pool of loans in order to assist the purchaser with its decision to purchase the pool, as well as its pricing.

The value added by Rosenberg Martin Greenberg is that we have the expertise to draft sophisticated and effective purchase agreements from either the seller or purchaser’s perspective, and especially important for purchasers, highlight documentation and collateral deficiencies which prove useful in negotiating a purchase price.

Complexities of note sales

Offering notes for sale gives lenders a chance to turn funds around and create more loans before earlier loans are paid off. Selling debt offers lenders flexibility that they would not have if locked into long-term investments; it brings immediate liquidity. A note holder may also want to sell loans on the secondary market due to changes in financial circumstances or deteriorating collateral.

Selling loans also relieves the lender from acting as a loan servicer. Some lenders sell the loan but retain the right to perform the servicing, thereby minimizing the effect on the consumer, who can keep making payments to the lender as before the note sale. Other lenders relinquish the servicing rights in order to avoid continuing that step, which means the customers must deal directly with the note purchaser.

In all note sales, the seller must comply with various federal and state statutes, the failure to do which may entitle the purchaser to rescind the purchase if, subsequent to closing, the purchaser regrets its decision. RMG attorneys help clients stay in compliance with all statutory requirements pertaining to such transactions.

Buying real estate notes in a mortgage pool

After the housing market crash in the early 2000’s, there have been an unprecedented number of mortgage notes for sale. For some investors, this secondary mortgage market offers an opportunity to buy notes at a discounted price and potentially higher yields.

A buyer can purchase individual mortgage loans or they can buy a pool of loans. The bigger the mortgage pool, the greater the due diligence required. Some important considerations include the quality of the loan documentation, the quality of the underlying collateral, and the nature of the guarantees. Real estate legal counsel can help note purchasers make these critical determinations.

Experienced real estate attorneys are an asset to loan sales

An attorney should be involved at each phase of a loan sale, performing the necessary due diligence to determine the strength of the underlying loan documentation, prepare documents, memorialize agreements, and spot all complex compliance issues. Attorneys at RMG regularly assist sellers and buyers of notes throughout the United States, including Maryland, Virginia, Delaware, West Virginia, Washington DC and Pennsylvania.

Our team is a true industry leader in all matters relating to note sales. We are eager to apply our expertise to your corporate endeavors and help your interests thrive.

Note Sales Team

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