Sign New Jersey Banking Forbearance Agreement Computer

Industry sign banking new jersey forbearance agreement computer

there we go all right hey everybody this is z and i'm coming to you from nova notes meetup and i have my guest here uh sri gangla from fair work investments and um what we're gonna uh go over is a little bit about um mortgage note investing in the state of the mortgage note um industry as as it is uh with this covet 19 and um but before we do that let me tell you a little bit about myself so um again my name is annenzia wanna everybody calls me z because it's a whole lot easier to say that than my full name and um so i'm currently a dod contracting officer for the federal government and a retired navy veteran i did 20 years in the navy and holds a bachelor's at a master's in education and a master's in public administration more geared towards uh federal contracting which is what i do been a real estate investor for a little over 30 years not in the note space mortgage note space but just buy and hold rentals as i moved from duty station to duty station and started my business in 2018 and um got really interested in mortgage note investing so um with that enough about me let me go into a little bit about what a note actually is so excuse me do you want to do a full screen so that they can see the screen better [Music] on the bottom right hand where you see the zoom the button yeah all right so hopefully you guys can see that yes a little bit better um a lot better as noted and uh so if you ever to kind of make it simple for those of you who don't know what a mortgage note is if you ever had a uh took out a mortgage loan on your um home if you own a home and you took out a loan on that home you signed probably a promissory note and that promissory note is what secures the uh your home for the lender for your bank and uh they have they hold what is called your mortgage note and uh so that gives them the right to foreclose on your home should you stop paying on that loan and so as a mortgage loan investor what we do is um we also act as the bank when we buy mortgage notes for the balance owed on your mortgage loan sometimes typically it's at a discount it's going to depend on some other factors so but so like if you're in a buy and hold you have to realize that as a node investor you don't own the property you own the paper so just wanted to make that distinction as far as mortgage note investing goes so with that i'm going to go ahead and introduce my uh my guest mr shree khan gondola from fair worth investments and shri you go ahead and introduce yourself and tell us a little bit about you and um your expertise here in the mortgage note space sure uh hello everyone uh my name is srikan gandla i've been investing in mortgage notes since um in relations since 2008 so it's not all you know roses and chocolates i guess so back in 2010 i was basically doing uh i was a landlord and a lot of doing flips so back in 2010 um i was doing three flips when the federal government has announced eight thousand dollar credit and all three of them were with hard money one of them was a regular crew i see dan join so dan can definitely i think he already knows where i'm going so uh basically what happened is the first property i was using my regular crew since i wanted to get the eight thousand dollar credit uh i was doing two other properties with not my regular crew and it was fourteen percent interest and four points so by the time i since i was not using micro for the other two rehabs it did not finish by may 30th 2010 so i held that property with the hard money loans for more than 12 months because it felt like borrowers just disappeared from the market i was able to sell the one property other two properties i was not able to sell so i was in a deep hole this was back in 2010. so what do we entrepreneurs do when we um it doesn't go as planned we think we are better and we will go after it right right i was looking for more short sales and that led me to some one of the hedge funds that actually you know uh it was listed as the lender and i was trying to reach out to them and it didn't work out then i said yeah i have a few more um a few more of this which are not performing can you help me with this like that's not what we do we sell notes and you know that's already you didn't know what the notes were at that time exactly but it was really um how do i put it because i i had worked in uh secondary mortgage industry for uh two of the biggest players in the market for eight years right um so i know um all the calculations all the software i'm from iit background i guess i should have told you that i'm a masters in computer science masters in telecom bachelor's in computer science i have two masters uh in technical background so um so i was building systems for this uh two big secondary mortgage lenders where and how do they handle you know uh so i mean i don't want to go into good details of how fanny and freddie buy mortgages but when they buy mortgages there's something called a master seller servicer agreement which they signed with you know any of our regular lenders bank of america wells any of them right once they sign this agreement and bank of america delivers against that contract so 50 billion dollars of 720 credit um you know this much ltv and it is in one of the contiguous states and you package that and sell it deliver loans against each of this contract that they have with you know fannie or freddie whichever might be the case so i was building systems more towards performing loans so you know fannie freddie performing loans so there whoever knows any software their whole software applications to manage non-performing notes was an excel excel file or an access database right so then what happened is they started building this non-performing loan department so they started selling us bulk cardios to start with so i was involved when they were building systems to do bulk cardios so they divided the whole country into 18 different segments and um they wanted to see all that information but you didn't know what you were looking at yeah but i didn't know how to use that to actually monetize that info right so i was building all that input so um then what i did is some other rentals you know um i think uh i don't know when it was but i attended a seminar and um i i got to know about notes so they said you know you can actually sell a finance you want to be a lean lord instead of a landlord right i think you're trying to explain being a property owner versus a note owner so you wanted to jump on the lean lot okay let me look at this so i started looking that into it and at that point of time i had a portfolio over 20 rentals and i was managing myself and i had a two-year-old son and was crazy so i i started selling some of my rentals as uh with owner financing basically um i the properties were in maryland so um which can be a little time consuming to foreclose so i had to actually sell it on a cfd um contact for deed instead of actually selling it with a mortgage and a note um so you know that's that's how i got introduced to the node space with my own properties right i was set up financing and selling the properties so when z got stuck with the property i think she sold it now yes i could use that knowledge to help her out how she could actually structure owner financing and still make a good buck at the end yeah that was good so um as i told you so this hedge fund got me um they said can i buy notes and i'm like you know do you have you ever worked on it do you know how to do it you know i was all over the place i guess 2014 come 2014. i did buy some notes before there were 2014 i've actually got in touch with fukuon bilal so he used to do um this three month it was crazy i was living in virginia and pokemon is in new jersey north jersey so i used to drive from here tuesday stay in a hotel on tuesday wednesday thursday so the classes were on tuesday night and thursday night for three months straight shot so every for three months i was driving from tuesday to thursday to go there and i tried to learn how to do notes yes yes so it was a three month process i would say that is the best training i ever received like is i mean three months you're seeing everything basically right everything from what a node is what the document is how you record assignments how do you see if the node actually makes profit what are the different exit strategies how do you make money from each electric strategy how do you pick your node so basically i think um even dan might have mentioned this he would buy an asset based on the uh if you if you're happy with the least amount of return out of all the exit strategies that you have so if you're not if i have six exit strategies the worst return that i'm gonna get is 25 out of all six then i would go in and pick that note right yeah i mean that's what i use basically and then you can jump in there i think i've unmuted you so if you wanted to jump in at all hey dan how are you good how are you it's good to see you yeah i'm happy to jump in but series doing an awesome job man his history his historic i didn't get the airport so after that um you know fuquan basically deals with non-performing seconds i did mostly seconds um and uh eventually some other that product got lesser and lesser in the market so i jumped in buying non-performing first so by first uh seconds um there's one other aspect of my business where i buy properties which are about 750k um basically that qualify for jumbo and super jumbo loans i buy on a contract for deed from the owner and actually i wrap the notes and sell it to a different buyer because the generally the buyer pool in that particular segment of the market is much lesser because it's harder to qualify so i'll i'll show some of the slides what's happening right now in the market if i can take the control mm-hmm let me see if i can get that to you i think if you stop sharing then i can share my screen i guess all right let me do that i don't know okay let's see if you can share yours will it allow you yeah yeah okay one second hi how are you good oh somebody's trying to get in what the man so i project i presented this um in one of my uh recent meetups i do two meetups uh once a month uh one in virginia one in maryland uh specific to node investing [Music] so i was talking about you know what's happening with kuvit 19 um i'm not an expert i'm just these are my thoughts based on what i've seen in the past so unemployment claims right so if you see this uh starting march 9th it jumped up by you can see the percentage right so this has actually gone up to 20 million now so when i did the slides 6.4 million um unemployment claims were filed by the first week of uh probably you know first week of april or first of april 22 million now yeah yeah yeah so um so i was basically talking about how it actually impacts the mortgage industry i'm not going to go into the gory details yeah but what this essentially means is um there's going to be more product coming up in the market um so there are two waves of product that is coming in so all the node holders um this i'm talking about hedge funds higher up the food chain um i guess i need to go into that so when you talk about a mortgage industry right so what happens is the bank of america wells fargo fannie freddie all of this sell it to you know bigger size hedge funds and those h1 sell it to a midsize hedge funds and then you buy from them right you in the sense in individual note buyers buy nodes from them so this is the food chain so higher up you go the food chain you get at a better pricing right but what happens is most of the time you're picking up the whole pool instead of just you know picking and choosing united you don't have cherry picking allowed cheney picking is if you have 20 mortgage notes let's suppose 20 mortgage notes i'm just using it for example there'll be a lot more in it so 20 mortgage notes you can't choose i want the third one fourth one fifth one you buying the whole thing higher up the chain you go you buy the whole thing hopeful right um so uh what happened is this medium level hedge funds were holding a lot of the seconds uh and first basically they were releasing and drips but not you know you know whole it was not like this in a lot of product available in the market so what i've seen right now is as uh this code 19 hit so i don't know if it's a because of panic selling or they're getting prepared for the upcoming uh note sales that are going to be available they started selling those assets so i have bid since um beginning of march till now i've bid done five tapes i didn't win all of them but i bid on five tapes right so i'm seeing a lot of product coming in but the actual product which has got all product in the sense notes where the borrowers are getting impacted that product will will probably see about 18 months 18 months 24 months because there's an incubation period where you know they have to go through this they miss the payments and you know the banks have to go through the process before they decide what to sell but i'm expecting some product to come in you know so so even with that don't you think that with all of the the stays on foreclosures and the stays on evictions and and and filings and all that stuff that's going to have even more of an impact on um when some of these assets show up on the market yeah absolutely absolutely i mean what we don't know at this point of time is you know um i don't know the exact number right now but how many people are actually delinquent right now because the forbearance is you know temporary what what they're getting is temporary relief of not having to borrowers are getting a temporary relief if they have a financial difficulty during code 19 they don't have to pay the mortgage payments for a 180 days if it's a federal loan and each of the bank has a different regulations right uh bank of america suggested 90 days where they don't have to pay right if it's a fanny freddie va or hud loan they don't have to pay for 180 days and they can request our 180 days additional days but what we don't know is after this 180 days ends if they're a small business owner will they be in a position to actually um you know jump in and you know pay right away right it also depends on how the forebrains were structured so if anyone on the call is a borrower one of the things that you want to do is when you talk to your bank about a forbearance plan you want to ask them to put this payments of three to four months at the back end of the loan not the fourth month so you don't make payments for three months and on the fourth month all four months of payment is due it's not really going to help you right so um you know if you take anything from this this one clue one tip you want to use uh from this webinar wherein if you do request for a forbearance ask it for to be put the payment at the back end of the loan 20 or 30 years whatever that is not immediately in the fourth month right i've seen a lot of um posts and things like that from borrowers saying that the banks were um doing their forbearance where the payments the full payments would be due in the fourth month yeah um again that's another good thing about being node investor is that as the bank we can make those um changes and modification modify those uh note loans and stuff much easier than the large banks can and you know just we're able to work with our borrowers a lot better than banks can right all right um so uh this is a graph that is actually showing you know um so i told you about uh government guaranteed loans which are um uh freddy fanny all of those so there are two types of lenders right one is depository where they have a deposit um section of business going where they have a retail bank people are coming and depositing funds in there for money market account checking account so there's some kind of liquidity on the other hand there are some lenders who are non-depositories so they don't have a deposit they only lend money they borrow money from um i mean they have some arrangement with the fannie freddie where they sell the loans to fanny freddie but they don't have a retail banking division or any other source where deposits are coming in so those are the ones that are going to get impacted more than the depository institutions if anyone wants to know why they can contact me offline because that's a conversation for it or i think zia has provided my facebook link if you go in there i did a presentation went into detail of this about 15 days back so you can go in and catch that and i'll put the slide back up at the end with your all your information so um one other thing that you might want to concentrate is uh if you want to do owner financing you know that market is going to be pretty hard uh the reason being the banks are already tightening the lending guidelines um jpmorgan chase announced that you know you need to have at least 700 scorer figure score and 20 down if not they don't want to land right and one other thing i've seen is jumbo loans which were already approved wherein they only asked for 10k now they're asking for 20k down um and the other is uh lenders what they're doing is right before you close they're actually if you are a w-2 employee they're asking they're calling their your employer and checking is this person still employed can we do this loan so you know they are checking a verification of employment which is i never heard of this so let me ask you this tree so with the seller financing i know that's that's a great opportunity but how how do you think that's going to impact a lot of the note investors who are not licensed in certain states um if you're not licensed there are two ways to do it right get licensed in the states um where you have to so there are different so if you go to nmls type in a national mortgage license nmls if you type in nmls in google you will get the list which states need the license so if you want to test the words and you are not actually want to do it on a long-term basis for with owner financing or any mortgage related um business then what you want to do is concentrate in the states where the license is not required not all states require licenses right and if let's suppose you know some people like to i mean as an old investor i invest wherever the opportunity is available i don't stick to my backyard right right but if some people are you know like only specific states they live in and they like to stay in those states for those folks what they can do is um if let's suppose for maryland right for example for that and get the license just for that state there are um depending on which attorney you talk to they say it is required someone didn't say it is not required in maryland i have a debt collector license in maryland but you know um it's your call talk to your attorney make the call you need the license but one thing you do want to do is it doesn't matter whether you have license or not if you are originating the seller financing note right you want to use a licensed mortgage rmlo who is licensed in that state to do that you don't want to qualify yourself unless you are selling to an investor if the property the borrower is an owner occupied borrower then you definitely want to use an rml it's not a whole lot um if you need a originator in any of the 50 states reach out to me i can provide the info it doesn't cost you a lot probably you know 1 000 to 1200 bucks so and you can um you can ask the borrower to pay it basically as part of the closing costs so it really doesn't there's no reason not to use it right right there are some states which are weird even if you're using a rmlo you still need that license ohio is one of them and they recently changed the laws and um they made it a lot tougher to do or find signal or even buy notes that would be one of the states to avoid for me anyway yeah okay okay this is talking about credit availability so this has gone down a lot uh what i mean by that is if you look at the conventional loan see everything is going down basically the ability to get credit is going down since march this is jambalone they took a huge nose dive uh this is covet funds so i was using this to see you know how what what are the potential borrowers which already have mortgages or potential places why i think that there will be a lot of opportunity right so as part of the i think there are different phases of this cares act the this was done when it was done for the first phase of the cares act how are the funds being distributed across different uh sectors so small business obviously you know those people are going to get impacted and that will result in they not paying their mortgages and that will come into the market and also um when you go to a traditional bank right they look for two years of tax returns even if they have the income later let's suppose we get out of this covert thing everything and we come september and they want to buy the house and they have the required down payment right but they don't have the because if a bank is going to look at your tax returns for the past two years and there's a chunk of time in the middle you're self-employed and you didn't have any income right so that's where the owner of using the owner financing actually helps you because you can help the borrower actually get a cfd and buy the property with you be you own a financing it you don't have to use your own funds to own a finance you have to know how to structure the deal let's say then what happens is you know that i'm telling what are the opportunities that are going to come up based on what's going on in the market right for the landlords out there and also note holders these are some of the jurisdictions that have stopped uh foreclosure and eviction so you can't evict or foreclose in these counties for temporary basis i think it's most of it is 90 days um okay monkeys crisis as i see it this is not similar to 2008 2008 loans were given out to borrowers who you know specifically did not qualify for a mortgage uh if you can breathe if you can fog a mirror you could get a mortgage in 2008 not anymore so this is a little different um economy was comparatively better now but you know because of the kuwait 19 it's a ripple effect right everything started with uh when carrots act was given out right i mean it was required at this point of time i was not really excited about government jumping in back in 2008 to bail out the big banks but at least this time there's no bank bailout so that's the good part because it is actually helping individuals and citizens rather than helping the big institutions right um yeah i i'm not going to lose buying abs right so basically what fed is saying is when fannie and freddie increase their guidelines of what mortgages they will buy right and also the lenders um you know what they're going to buy basically fed what they said is to maintain liquidity in the market they are saying as long as you ordinate the loans which are conforming loans we will buy those loans but i haven't seen any uh drop in how many markets are being approved um i mean not approved sorry how many markets are not being approved after kobe 19 started um yeah so this is going to impact a lot um and as i stated earlier i was i'm hoping to see a lot more trades in the future i'm already seeing that but uh none of what i'm seeing right now is because of the borrowers that went delinquent because of kobe 19 because that's going to be in the pipeline later yeah yeah um so what do you think that um as node investors or even just investors or people who wanting to get into notes right now what what kind of things should they be focused on doing um try to try to see um network with people who are actually doing deals right now right try to network with them and try to understand um so one thing right if you are as a you know any investor right you if you are looking for cash flow if you're looking for rental properties right you want to make sure there's a 1.75 debt coverage ratio i use i used to generally say 1.5 i would actually bump it up to 1.75 right now the because you know there's an expectation that the property values will fall by how much i don't know no one knows i guess right um that is from a property perspective so be conservative don't be aggressive because right until jan i was conservative but you know comparative to now i was aggressive compared to how i'm buying right now i've already seen a price drop in notes that i'm buying it is by you know depending on the state 5 to 10 cents so if i was buying at 40 cents um before i'm buying it 30 cents same note uh you know yeah because you know there is an expectation that the property value will drop so the equity that actually is covering you um is going to be lesser investing on your second position yes yes yes even in the first right so if you're assuming your roi needs to be 25 percent and you assume the property is 100k right now you foreclose and you're going to sell by the time you're ready to sell it might drop to 80 or 70. right so you gotta adjust so you gotta just you gotta adjust the pricing that you buy um and if you have asset if you're already invested in assets and if you can get out of it and get to a cash position try to try to do that because there is going to be opportunity coming up so um that's why i got with dan so i could raise capital to position ourselves to be ready for the opportunities so i forgot that i had this slide so anyway you were asking how to prepare right this is opportunity right um if you are into doing direct mail or any kind of marketing uh try to reach out to uh landlords who are not willing to sell it at a price in the past they might be motivated now right one of the owner financing things that i was talking about is talk to new constructions where it's not you know one of the big firms like um envy homes or uh pulte or toll brothers yeah i mean you're not going to get bite from them but new construction from a smaller size builders right they will be crunched for these properties selling okay you can use the owner financing with them basically you buy with owner financing from them and you you can wrap around and sell it with owner financing um that that is going to definitely be an opportunity for sure right and landlords who have sold um bought rental properties with the intention that they're going to do a r b and b wherein they can get a higher rent and they didn't look at the solid financials of 1.75 debt coverage ratio assuming if you were to rent that as the regular market right in survey airbnb right those landlords will be ready to sell now all right i know a lot of landlords but uh looking at airbnb as the rental prospect here local and local dmv area so you know you will find some opportunities there um you can buy pre-foreclosures so if you're mailed to pre-foreclosure don't do that in maryland maryland there's something called pifala uh that actually uh you can get jail time if you actually send mailers or any kind of marketing to pre-foreclosures unless you have that there's some kind of license required anyone that is more interested type in p-i-f-a in google pifa maryland and you know contact an attorney once you read up contact an attorney in that state they will help you how to actually reach out to the owners okay uh owner financing non-qm mortgages as i told you any loan about 750 which is not basically a confirming loan um you can you will have a lot of owner financing opportunity because the sellers will not be able to sell that property i i mean so there there is some kind of marketing which i use with burdocks so there are burdocks that actually bring me properties with our owner financing so basically they market for owners with equity and stuff and they talk about they talk to the owners do you have anything else to sell and if they happen to have a you know loan that would only qualify for non-qm mortgages so they are not able to sell and they bring me the deal and you know i joined venture with them to actually you know do the deal and they get three cash profit centers basically part of the down payment monthly cash flow and the back end payment when the borrower refinances so that's the owner financing for non-qm mortgages for node investors as i told you for the past 45 days i have seen a lot more product than what i've seen in totality for 2019. so you know there's a lot of product coming in and um there are some some more to come in the next month or so so there's a lot of opportunities coming in um yeah uh i told you about the 180 days moratorium um big edge funds are selling right now uh getting prepared for you know getting a cash situation so that they can actually be able to purchase in the future oak tree is one of the bigger funds that is actually opening a new distress fund to be able to best buy this debt that is going to come up so they are raising money right now it's one of the bigger hedge funds that is actually raising money to buy notes um so you know that's a sign so then they'll trickle those notes down too yeah then i mean if they buy and trickle down it's going to take time yeah yep yep all right um yeah i was trying to explain in my seminar whatever wrap around mortgages how would you actually sell it but you know i'll say that for another day another presentation uh yeah i think z already provided a good job of definition so um i mean i don't know if you have any anyone has any questions i can yeah so um sri if you can stop sharing yours um share your um contact info and go back to that and there is uh shree's um info there if anybody wants to get in contact with him he has a facebook group as well and this is being recorded so you can also come back to it we already went over the disclaimer and here is my information and um so if anybody has any questions go ahead and put it in the chat and otherwise i'm not seeing anything so i want to thank you all for joining me most especially shree for taking time out of your day to um present on my show and speak for me and we'll see you out there in note land y'all have a good one thank you you