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

The Latest from the Knowledge Center...

The ABL Collision Course

July 12, 2018

Commercial lenders that originate asset-based lending (“ABL”) credit facilities are finding themselves in an increasingly competitive market. Large national banks grab the bulk of the multi-million dollar ABL credit line business. Lightly regulated non-bank ABLs serve smaller markets with loan facilities ranging from $3 million to $30 million. Community and regional banks seek to hold…

Lender Compliance with New Customer Due Diligence Rules

July 12, 2018

Lenders should have completed implementation of procedures for compliance with new regulations that become effective on May 11, 2018, informally known as the “Know Your Customer” requirements. Those regulations focus primarily on identifying the beneficial ownership of financial institution accounts. Lenders should not let those beneficial ownership regulations overshadow the new customer due diligence (CDD)…

Seventh Circuit Affirms Dismissal of Student Athletes’ Suit Seeking Federal Minimum Wage, But Concurrence Leaves Room For a Different Result in Future Cases

July 11, 2018

On December 5, 2016, the federal Seventh Circuit Court of Appeals affirmed a trial court’s dismissal of a suit brought by two former members of the University of Pennsylvania’s (“Penn”) women’s track and field team.[1]  The student athletes sued Penn, the NCAA, and more than 120 other NCAA Division I colleges and universities.  The theory…

Oh What A Difference A Day Makes: Ninth Circuit Bankruptcy Appellate Panel Holds That Check Written Before Bankruptcy Filing, But Honored After Bankruptcy Is Post-Petition Transfer

April 19, 2018

“Transfers,” and when they occur, are important under the Bankruptcy Code for a number of reasons.  Trustees may recover as a “preference” any “transfer…to of for the benefit of a creditor…for or on account of an antecedent debt…made within 90 days before the date of the filing of the petition…that enables such creditor to receive…

Supreme Court Patent Case Could Affect Bankruptcy Court Authority

February 28, 2018

The bankruptcy system is facing a potential upheaval from an unlikely front: a patent dispute. The U.S. Supreme Court has heard oral arguments and is now considering the case Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, and its separation of powers issues could have a drastic effect on the operation of American…

Snapshot of the New Federal Bankruptcy Rules

February 28, 2018

In April 2017, the U.S. Supreme Court gave Congress a number of proposed amendments to the Federal Rules of Bankruptcy Procedure (FRBP). Congress approved those amendments, and they became effective on December 1, 2017. Some of the advantages in the new amendments go to consumers who declare bankruptcy in Federal Court. The lending and banking…

Merit Management Group, LP v. FTI Consulting, Inc.: A Unanimous Supreme Court Opinion Leaves Unanswered Questions

February 28, 2018

On February 27, 2018, the United States Supreme Court issued its opinion in Merit Management Group, LP v. FTI Consulting, Inc. to resolve conflicting Circuit Court interpretations of Bankruptcy Code Section 546(e).  Although the Merit opinion is unanimous and appears straightforward on first reading, fertile grounds for future litigation remain. Section 546(e) is commonly referred…

Live By The Choice of Law Provision, Die By The Choice of Law Provision

January 4, 2018

Many parties, particularly large companies operating in multiple states, include provisions in their standard contract forms specifying that the law of a particular state governs the transaction.  The choice of applicable law is generally law with which the company is familiar, such as the law of the state where its headquarters is located, or law…

Trends in Commercial and Residential Real Estate

January 4, 2018

An uncertain political and economic environment may increase the perceived risk that lenders take when they loan funds against real estate. Identifying developing trends in commercial real estate can help a lender manage its risk and underwrite loans that are secured by properties that will hold or increase in value. The lending and banking attorneys…

Senate Action Reverses CFPB Rule, Re-Opens Door to Arbitration Clauses

January 4, 2018

On October 23, 2017, the U.S. Senate voted by a narrow margin to repeal the Consumer Finance Protection Bureau’s (CFPB) July limit on arbitration clauses in consumer financial contracts. The repeal of the rule effectively limits the institution of class action lawsuits in consumer financial disputes and allows banks and other financial institutions to elect…