Posted by Mark-NC on April 05, 2000 at 07:15:44:
Sure they are out there, but it is too good to be true. They will buy notes from lousy credit buyers but you are going to get hit so hard on the discount it probably won’t be worth it.
The Note Buyers are going to want to see the credit and have a 1003 filled out. Any body that is advertising this is just trying to get business. It’s just like the car Dealers that advertise everybody is approved for a car loan. Well they are, but the terms and the down payment are whats going to approve them. The worse the credit the more they are going to want to see down. It’s the same way with the Note Business. If the credit is lousy they may want to see the buyer put alot down. They want the buyer to have risk or money involved too if they walk. You can also expect to have very low LTV’s with this type of buyer.
There is alot of flexibility in the Note business to structure deals but if you are going to target lousy credit buyers I wouldn’t waste your time unless you have alot of room on your deals. I find that Most people that have lousy credit don’t have any money to put down either.
The ideal situation for the Notes Deals are self employed or people with fair to decent credit that need a nodoc type of situation or income to debt may be a little high. They are easy to close and they are very quick and the discounts are minimul for this type of buyer.
Seasoning a note with this type of buyer may help if it is seasoned long enough but you still may want the terms set at a good enogh rate and lower LTV to get a decent buy rate.