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this is the no closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for pennies on the dollar get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same now here's your host ceo of we close notes scott carson good morning good afternoon good evening everybody welcome to this episode of the note closure show as always scott carson excited to be here with you today and today's topic i wanted to share something it's been a while since i've talked about the subject i said well why not bring it back up i've been getting questions and bombarded with emails and some comments from people asking like okay scott i i think there's going to be a big downturn in the market i'm like yeah duh and you have to look at um all the numbers are coming out and there's articles coming about wallet hub had an article on the top hundred cities are being hit the hardest and that includes five cities in austin or five cities in texas sorry and a variety of other the major metroplexes that have really been hit hard with people not only um filing more for bankruptcy but you have search ability people looking for loans people looking increased credit um percentages in their credit cards means they're using their credits cards more and then also credit scores dropping across the country so this is an interesting article we'll talk about on a later episode here in a couple days when we have meryl chandler on from get fundable but one of the biggest questions people are asking is like okay scott how do i find banks that have non-performing notes and i'll tell you this right now it is not difficult to find banks literally you could jump on the fdic.gov list and start looking at quarterly reports if you wanted to that's a pretty tedious process you could use distress pro to jump on there from brett palumbo and start looking at his uh software which we'll look at the quarterly reports and start to analyze and start tracking stuff you can buy the bauer financial list for roughly 300 to 400 bucks uh just to give you a breakdown on which banks have non-performing portfolios or non-performing assets percentage of portfolio how much they have that's not going to give you an email or it'll give you a number a customer service number but you're still going to have to do some old-fashioned four-letter word work w-o-r-k you gotta do some work to find that but there is an easier way to help you prime that proverbial pump for very little money and very little time and then we all love that if we can save time or money great and this is actually a free list that i'm going to show you whoa free that's another four-letter word better watch out now before i talk about where we have you and i where we found this list and where how we've used this list for coming on a decade now okay um i want to clear up some misconceptions out there banks will sell you non-performing notes they will sell you one-offs um and i'm not talking except the bigger banks i'm talking the top five or ten banks they're not going to sell you a one-off residential note okay but there are plenty of other landing institutions other areas out there to find portfolios or one-off notes that you can cherry-pick from or add to your portfolio now the list i'm going to talk about it's not everywhere but it does include resources from every state out there for the most part now for those of you guys that don't know i got my mortgage brokers license sorry my my loan officer's license not my mortgage broker's license but my loan officer's license back golly going back to 2005. is when i first became a licensed loan officer in the state of texas it used to be you had to basically pass your group one health insurer your insurance license and then you wrote the state of texas 125 to become a loan officer and then you boarded your loan officer's license with a mortgage broker of some sort and so i did that initially my first loan was actually with my parents we did a refinance on their house they were at like 12 percent of this race we were able to roll in all their credit card payments their bills other stuff into their mortgage and their payments went down by half than what they were paying out so the water was starting to come over the side of the boat in half and then we also set them up and buy weekly payments or buy monthly payments so that they paid off the house in seven years versus 20 years and my dad actually cried at the closing table and that's one of the things i got so passionate about financing especially loans and then later on became a uh a mortgage banker when i worked for bank one and jp morgan chase and then when i became a loan officer as we started aerial capital it's my buddy boyd pops and then of course we all know what happened in 2008 when i left that and got in the no business but along the way as i sit in here in 2008 as i was leaving um aerial capital to start inverse investments and start that route as a note investor i started looking how do i find people and i started thinking like well if i'm going to be chasing mortgage bankers most of the major banks they have a federal charter so they're excluded from filing at the state level the federal charter it's different and i'm like okay well then how do i find those well around this time 2008 910 we all know what happened and resulted in the in the national license mls national mortgage loan originator mlo's license okay and what used to happen is states would require mortgage companies and mortgage bankers and um to register with each state you'd register to do business in texas you'd register to business in oklahoma you know registered businesses in illinois california all those states if you want to do business then you either a had to pass a license for that state or if you were in one state that took enough continuing education paid fees a lot of times your license would roll over to that state at one point when we're we're doing loans in roughly 30 different states now part of that was licensing but also as part of that was we were uh partnering up with a a nationally charter bank called the world savings we were able to originate in a bunch of states through a subset of world savings i won't say anything's gone it became okovia and welcome got bought up by wells fargo back in the day but anyway going back to my mortgage brokers thing i was like wait a second mortgage brokers that are outside they have like a warehouse line that are independent of a big fairly charter bank still have to register with the state aha ding ding ding all right that idea is like uh huh i might have an idea here so i did that i jumped online and i said okay what department in texas handles mortgage broker licensing and it's the text is this texas department of savings it's it's basically um i'll share this exactly with you so you guys can understand this because this is an easy thing it's the department it's the texas department of savings and mortgage lending okay sml.texas.gov s savings mortgage line sml.texas.gov so i go there and the website's been pretty much the same for the most part obviously they change up dates but they handle the licensing of mortgage brokers servicers and mortgage companies doing business in texas and i started looking at other states and not many states have this availability on their state websites and it's not always the department of savings mortgage lending some states department insurance some states like california it's the department of real estate that handles that so each state's a little bit different out there now i actually paid california back and then i called them and said hey i'd like to get a list of all your mortgage bankers and servicers that are licensed in your state and yet i'd have to send a check in for 50 bucks with a self-addressed stamped envelope and they would send me back a three inch floppy i'm like a floppy what the hell am i gonna put this in a couple years later they sent back a cd rom now it's i think it's a download but i don't know if it's 50 bucks anymore but what i found is like okay when i started going to some different estates i found like i could download this information for free now why is this so valuable well because if you're looking for deals you're looking for no deals you obviously target banks but there's also a lot of mortgage bankers and servicing companies out there that have product that you can cherry pick from now mortgage bankers are often originating loans sometimes they'll keep it in-house in their own portfolio other times they'll have it on a you know warehouse line of credit that they're selling off to the bigger banks or provide that warehouse line of credit but sometimes they have to buy that stuff back and hold it on their lines for every you know for basically every thousand a hundred thousand dollar loan is costing them you know ten to twenty percent in fees off that loan that they can make in a year and rinse rinse and repeating and the velocity capital if you land out if you're making three points and a hundred grand your goal is to get that 100 grand out 12 times a year so that you're making 36 grand off that 100 grand loan by ranks and repeating originating loan funding alone boom warehouse line a mother ship wells fargo government comes back in pays you 103 for it boom now you've got that 100 grand to go lay down again that's how a lot of mortgage bankers make their money so getting back to this list if you go to like i said sml.sml.texas.gov it's a department of savings and mortgage lending in texas you can just google it literally on the front page it will show you on the right hand side says quick links apply or register ml uh national mortgage loan servicing register information ml n mls at the ting twister okay download list of licensees and pay penalties online well i'm not paying penalty i'm not looking for mls information i'm looking for the download list of licensees so if you click on that button it takes you over to another page and download list of licensings and it's self-reported to texas msl by licensed company you're going to inform individual uh it's usually pretty much current up to the previous business day so it's a list that shows you who's licensed to do business in texas so then basically it gives you three opportunity three things to download for free free company roster download a branch roster download and a sponsored individual roster download you don't need branch roster you don't need sponsor individual what you want is the comp the company roster download so you click on that button it takes a couple minutes but then it downloads a huge list to you okay downloads an excel spreadsheet or csv i'm not sure exactly i think it's a csv but anyway downloads an excel spreadsheet and on this spreadsheet some of you guys have been through our workshop before students talk about this it's like a ton of contacts i mean and you always know when lending is going good in the nation because i have downloaded this list for 10 years now it marked the 10th year i've downloaded looking back because i've saved the list every month every time i download it i do it on a monthly basis because there's always new people getting licensed to do business with texas now why is texas such a great place to get licensed to do loans in because of a our fast foreclosure list you know we do everything faster fast highways fast executions and fast foreclosures it's a great place to be a lending or a lender because you can foreclose quickly if somebody's not paying it's also not too difficult to license you now have to pass a test you have to go get fingerprinted go through pass an fbi background check make sure you're not the unabomber or something like that but it's not that difficult pay your fees pass a test it's pretty easy test to pass these days okay now now you're not just paying 125 fee and batching your insurance tests now you've got to take a different test but that's okay but it downloads 4 hundred and twenty one total contacts now those contacts for those four thousand plus contacts are spread over it's roughly about seven different classifications now you have the mortgage banker registration which yay okay the residential mortgage loan service registration yeah uh mortgage company license okay and then you have four other categories that you really don't need that are on there and it just kind of tells you whose license who's got scheduled get licensed here you have auxiliary mortgage loan activity company license that's like uh i don't know exactly credit union subsidiary organization license you don't need that because you're not going to see a lot of loans from credit unions on residential commercial loans well and here's another thing i forgot to say this if you're a commercial lender you don't have to go through the licensing side that you do on the residential side that's the no commercial lenders you can do start doing commercial loans right today if you want to if you find somebody to help you out with it okay but going back to that you have the auxiliary mortgage loan activity you have a credit union subsidiary you have an independent contractor a processor don't need that list and then you have a financial services company registration okay so out of those total seven you're gonna remove those last four okay now the most important thing i might even remove the mortgage company license because you may not need that because that's a lot of people they're just mortgage companies they're not originating they're literally just kind of brokering stuff they don't usually have a lot of loans on their books okay because they're just originating and selling off they're just originating on behalf of somebody else's selling off okay so you don't really need that list but it is a pretty good size list i mean literally it is probably the biggest chunk on here and now i have had some luck marketing out to this list and i'll get to you why this list is so amazing now the more honor that 421 total contacts the mortgage company license makes up a big chunk of that 2833 okay so roughly what is that 75 we'll just say that it's actually about 67 percent um yet because 28 divided by 42 is 67. so you can actually get rid of the mortgage company license now the beautiful thing about this list when i talk about marketing to it is literally one of the easiest things it gives you the name of the company the mls id license type the status if it's approved expired voluntarily surrendered the status date for that when it was originally issued are they authorized to conduct business in that state yes it gives you the address this their mailing address their physical address so address city state zip so if you're looking for you know mortgage bankers or other servicers that are in your state if you're not in texas there are people in just about every state i don't think alaska is on here but anyway uh you get the zip code you have a phone number which is sometimes a customer service number or it is a direct line you get the fax number who uses fax and then you have an email address ladies and gentlemen you have a email address now the thing the caveat about the this email address you don't have a contact name now if you look at the email sometimes it's going to be like uh chris mason at packers mortgage company you got any you got a name there you have a phone number there sometimes you have an extension added to that with a phone number so you have something you can call to right but this email address is either usually the person in charge of the company or the person in charge of licensing you know whoever the person is making sure the loan officers or the mortgage brokers or they stay up to date with the licensing so i use this email list is a a phenomenal list to start mailing to now what you have to do is be careful we'll get to mailing out to them in a second here but the phone numbers are great because now you have a direct line of contact say hey i'm trying to track down the first in charge of you know your your secondary marketing or your bad loans on your portfolio or warehouse lines now the thing is it's going to be a different kind of call out kind of different message or even email address the email that you send out depending on the with how you segregate this list so give you a bit of an id we talked about you're going to get you got 2 800 uh mortgage companies on there if you remove that and just really keep the two hot lists the hot list scott's hot list baby yeah after hours with scott all right the mortgage banker registration list if you if you filter down to those that are approved still in the state of texas the mortgage banker that's the that's probably the number one list out it's mortgage bankers those are people that are originating that or they have warehouse lines okay there are 414 approved mortgage bankers doing business as texas as we speak right now now they're not just doing business in texas they're obviously doing in a variety of states now some may just be texas but i'm willing to bet any good mortgage uh banker is going to be looking to add licenses or affiliations with other companies across the country now these may be net branches uh these you know um different mortgage companies that are mortgage bankers that have branch offices across the country we've seen a lot of that so and it may just be one person entire the whole you know 25 branches or 10 branches whatever who's in charge of licensing that's okay still it's an effective to reach out to 414 mortgage banking companies is a good good starting point now the next most valuable list on this is the residential mortgage loan service registration now i was actually kind of surprised on this uh when we filtered the list down there was 331 licensed loan servicers and if you basically look at who is still approved it shows 271 are approved to do business in texas now what was funny that means there was basically 31 plus 29 60 that aren't approved to do business and i also know that some of these services when i looked at the names i won't drop any names but some of them are kind of bigger names out there that are servicing loans and i know they're servicing loans in texas but they're no longer licensed or approved in texas that's a big uh oh that's a no-no okay but they're still in business they're still doing business and active why is the uh loan servicing registration so important well those are really as we say if you got 331 or 271 it's anyone they're still approved to do business with texas they these represent hubs and i like to say loan hubs because they're dealing with investors like you me some bigger guys whatever it might be they might have a variety of clients anywhere from 100 to thousands of other loan originators or banks or lenders or note investors like you and me who have bought debt and are having its service now this is on the residential side of things so that becomes 271 potential sources for finding deals portfolios now what you do with this list is you don't call the servicing company say hey i want to speak to your secondary marketing department they're gonna be like we don't have one okay so what you do with this list is you call and say i need to speak to somebody in charge of business development now why business development well i learned this from my buddy joel markovitz who's been in charge of business development for several servicing companies you know new view land home uh and a couple others to bat around in his his years in the mortgage industry for the last 20 years but you want to speak to the person in charge of business development because this is the individual that's going out to conferences going out and approaching mortgage companies banks trying to get that bank or lender to give them the servicing they're literally trying to give them their business so that their staff can service the loans for a fee each month you know we had one of our students in the past has been bill coppage who was in charge of business development at face servicing big big lender of chicago and he taught me like yeah that the business development guys are getting paid a percentage of servicing fees each month from what they bring in if you've got a good business development guy or gal they're really making more of their money from those fees on a monthly basis so the last thing you want to do is call and asks to speak to this person in charge of business development and say hey i want to do you know anybody any of your clients that have any non-performing stuff or loans so they're looking to move or sell because if you say that i mean that's what you want to ask but you have to realize that that sounds and me like oh you want me to see about moving loans off my portfolio so you're taking money out of my pocket that's a big no-no okay don't want to do that what you want to do is add the magical statement and this is like it's like a magical statement it makes them all warm and fuzzy because now they're like i might be willing to help you out i want you to retain servicing provide that it's enough loans to keep on your portfolio because some servicers have loan minimums you know some of them want at least 100 loans somewhat 10 somewhat 20. it all varies on the servicing company some want bigger portfolios they don't want to deal with the one-off guys the small one because it's just not worth their their time uh so that's the thing look i would love to talk with any of your clients that maybe have loans they're looking to move if they're performing or not like loan servicing center they're a lender a servicing company out of california that just wants performing loans they don't want to deal with non-performing because they don't want to jump through all those extra things they've got to do so that might be a logical source hey do you have any of your clients have non-performing on your books that they might be looking to get rid of it are they looking to move them this quarter so that's a really thing think about that 271 or 330 because some of them are still worth down for dollars the ones that are the license are expired in the last year you know potentially 330 hubs of sources for notes for you and if you made 50 phone calls a day promise that would take you roughly a week to two weeks to make those phone calls but you would know all the business development guys or gals or be making relations with them and go from there now i always like to send an email to the license department on that list alone and do a smaller list 331 it's an email saying hey who's in charge of your business development at blank servicing you know you might do individual emails you i would still recommend you do a blast out to them through mailchimp now the biggest most important thing we're seeing happening with email service providers is the fact that they don't like these big list blasters so you gotta be very careful especially on this type of list you need to basically uh when you download the list and you cut and clean it cut and splice it so you've got your mortgage banker of 400 plus you've got your loan servicers or 300 plus is that you got to then chop that list up into bunches of 100 roughly okay and then upload that list of 100 send an email out upload a second list of 100 send the same email out and start seeing what happened now you should see a pretty good open right initially some you'll see some emails bounce back as maybe things have changed but keep track of who opens your emails and that kind of becomes your hotlist dial for dollars that following day but also reaching out to the same companies jumping on linkedin and seeing who's in charge of business development or evps of business development at the specific servicing companies or just jumping on their website a lot of times they'll tell you and show you who's in charge of business development on their websites as far as their staff and things like that and that's a great place to start with all right so literally you could jump start your note business by just dialing for dollars on these if you don't have a bank contact you don't have any money uh this would be the best thing to start off with and it's free when i got started calling banks it was a rough time 2008 2009 ladies and gentlemen all right and so i tried to pull as many free lists to find stuff i had to get creative and this one list i found still works to this day okay still works this day and you're going to see more lenders especially popping up here on that list mortgage brokers are expired or voluntarily surrendered as maybe their subprime lenders pulling out of the market for alt a lenders pulling out of the market because of everything that's going on with kovitt so highly encourage you to use this list it's sml.texas.gov that's t-e-x-a-s all spelled out we'll put the link in the uh the chat in the comments on the podcast as well so if you go to our homepage weclosednotes.com you can click on the link but literally guys and gals if you're really interested about this these are two hot lists that you just got to put some work in with either email blasts and phone calls and then jumping on linkedin but doing this on a regular basis yeah well we don't have anything now we don't have anything now okay next next next you are going to find something out of these lists i guarantee it if you put it to work and you follow the right things to do now you don't want to start calling the last week of the month you don't want to call the last last week of the year okay the best thing to do is implement this specifically the first two weeks of the month in reaching out following up the fall the third week and then taking the last week off because most of these mortgage bankers they're looking at in the month numbers from their sales staff the servicing company same thing they're pulling in the month reports with payments and things like that to get out to their clients so maybe even avoid the last week and the first week of the month for the servicing companies because that's when they're doing a lot of reporting so highly encourage you guys to take a look at this list download it put it to work very few people are doing this i know some people are calling and they're having success i know a lot of people that talk a game that oh i want to do this but they never use this free list of their tips to market to and that's one of the most important things just get in the habit don't send one email and nobody responded pick up the phone dial for dollars drop an email jump on linkedin and leverage those three things together to really make things happen for you so happy hunting ladies and gentlemen but you can find literally if you add those two together can i say literally one more time uh you'll have as i like to say roughly 700 plus contacts yeah six to seven hundred contracts uh contacts free to reception that's a great starting point you don't need a lot of sources that have proctor on a regular basis you just got to be good about following up with them on a regular basis so go out take some action everybody and we will see you all at the top [Music] you