EP 223 – Madison Management: Doing The Legwork For Investors with Shante Duffy

NCS 223 | Madison Management

NCS 223 | Madison Management

When investors are buying a note in certain states, it is a relief to know that there are licensed service providers on the loans for that note. But most investors don’t have the knowledge to contact borrowers the right and legal way. What Shante Duffy at Madison Management does is ask for instructions and let investors make the decisions for themselves. And with these instructions, they do all the legwork and keeping all the information for their clients. Shante shares mistakes often made by investors in regards to servicing loans and how she helps escalate the time for resolution.

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Madison Management: Doing The Legwork For Investors with Shante Duffy

I’m excited to have you here with our very special guest, someone that makes a huge difference not only in our business but a lot of other people’s business as well. We are excited to have Shante Duffy join us from the frozen tundra of New Jersey. Shante, for those that don’t know who you are, why don’t you share who you are, background and we’ll dive in a little bit about what’s so special about you and Madison Management.

NCS 223 | Madison Management

Madison Management

My name is Shante Duffy. I am the office manager here at Madison Management Services. It’s five years that I’ve been here. What we do here is we service your mortgage loans: land contracts, agreement for deeds, things like that. We’re not 50-state licensed yet, but we do service performing loans and non-performing loans. We handle loss mitigation, escrow services, foreclosure coordination, bankruptcy coordination and a lot more stuff as well.

Basically if you’ve got a note, they can handle it whether it’s a first, a second, performing, non-performing, owner-financed, contract for deed, institutional debt, Madison Management can handle that for you. You have been there for five years. You’ve seen a lot come and go in the last five years. You’re basically the focal point. When somebody is buying a loan and they service it and hire Madison to service it, you’re the person that they talk to and get things rock and rolling going from there, right?

Absolutely. You have to go through me in order to have your loan boarded here at all. I will get you set up. We have to get your entities set up here. I will be the point of contact for your incoming transfers as well. When you’re trying to get your loans boarded, if they notify your seller, I’m that point of contact. I will get you set up, get your loan set up. Every time you go on some board, then I’ll pass you off to whoever you need to be passed off to after. You’re not stuck with me.

You’re the magic woman that basically helps with the coordination from the seller of the note to whoever is the buyer or the investor and that seller’s servicing company. Not all servicers are created equal that’s why we love to have the mastermind here because you are the cream of the crop. You do such a great job of communicating, touching base. I know that you are a life-saver for what we do. You communicate on a regular basis with Jennifer in my office who handles the portfolio. You said something that Madison is not licensed in all 50 states. Tell me why that’s such an important facet or not an important facet. Some people are like, “Are they licensed on all 50 States?” Why don’t we talk about that?

It’s important no matter what. It’s important to know that you’re buying loans in specific states and you need a servicer to service those loans, that servicer should be licensed in the state of the person that you’re buying. If it’s not where you live, it doesn’t matter where Madison’s office is, our home base is in New Jersey. Some examples such as we don’t touch New York. We don’t touch it. It’s a headache. You want to find a servicer who is licensed to deal with New York. There are some states we don’t see too often and Madison is still fairly new. It’s only been around four about ten years. In all those ten years, I’ve been around for about half of them. We’ve grown a whole deal from when I started five years ago and we’re still growing. It’s just as of today, we’re not there. We haven’t seen enough investors who are buying in New Hampshire. That’s not a popular state at all and licenses do cost money as well. It’s worth our while but we are growing and we take suggestions if there is a state we’re not licensed in. If people are buying loans there, we’ll actually go out there and get it. We’ve done it in the past, we continue to do it.

That’s an important thing to keep in mind. You said something you want to hire servicers licensed in the states that you’re buying in. You are licensed in the majority of states that most people are buying in. If you take out enough of the loans in other states that you aren’t licensed, you’re glad to get the license if it’s going to make sense. Otherwise, you’ll be the first one to, “Use this first and you need to get somebody else there for you.” That’s a smart business model. I’ve seen that happen a lot. People ask me when I mentioned that we’re going to have you, “Are they licensed in all 50 states?” “No. They don’t need to be. I’m not buying notes in all 50 states. I’m not going to buy some ice in Alaska.” You are licensed in a variety of states and continue to add stuff. One of the great things I like too is Kevin was talking about becoming mortgage brokers licensed in other states as licensing intensifies in different states out there. Let’s talk a little bit about the origination point of Madison and Kevin.

Kevin, just like all of you being students getting into the note industry, he had a mentor and a teacher, and just jumped in. I’m really not sure how he started, but he did it with another fellow investor that I get to hang out with every so often as well. He started to learn and started to buy notes. He originally ten years ago, his own notes, serviced them on his own. Not the best idea. I’m not the biggest fan of it but as he grew his knowledge, he also realized there are needs for servicers. He did use other servicers and things like that especially for the states that require the lenders to be licensed and things like that. Started networking, he met another investor and that investor had asked, “Will you service my notes?” It just snowballed from there. He is still one of our bigger investors that we had here. He is still here with us. Everybody here loves him. That’s how it started. Kevin was like you, getting his feet wet, wanting to learn more, testing it out, diving right in and then realized that there is an actual need for this stuff and he is interested in it. He started small and had to hire staff to keep up.

Kevin is such a great guy too when it comes to it and knowledgeable and always want to share his information out there and really beacon in the note niche of real estate investors out there for us. I think that’s a big thing. We often see that a lot of note investors are often more friendly because we are such a niche, niche thing out there when you compare to fixer and flippers or landlords or wholesalers and stuff like that. Let’s dive in and talk about why it’s important to have somebody service your loans. Let’s talk about some of the perils that people face if they try to do things on their own.

The number one thing that I see when people try to do it on their own is that you don’t have the knowledge on the right way to contact your borrower. Madison Management does a lot of loss mitigation here for the investors that board their loans here. I don’t talk to borrowers, I try to avoid it. We are all trained, including myself, on how to talk to them what legally is the right and wrong thing to do. A lot of it seems like common sense but I’ve actually been surprised and I’ve had some investors tell me they’re threatening and harassing their homeowners, which is completely not legal or okay and it causes a major issue. The good thing about servicers is that you do exactly as trained. We follow rules and regulations, CFPB rules with everything that we do. Your borrowers are obligated to get monthly statements every month. Someone needs to be able to send that to them. Our system allows us to do that. They generate automatically. There are little things like that.

NCS 223 | Madison Management

You need some way to track a payment history and make sure payments are being applied correctly to principal, interest, escrow.

To be able to keep track, you need some way to track a payment history and make sure payments are being applied correctly to principal, interest, escrow. If you have any advances, things like that, we do all of that here. I do know some people who’s tried to do it on their own and I see some loans coming over that were self-serviced by John Smith who lives in Kentucky. It’s not clear as to how you got that principal balance, how did that even make sense? How did you apply these payments? It takes us a lot more time and ends up costing you as a lender some money for us to track that down and backtrack these payments and make sure it’s correct. The servicer really does the legwork and keeps up all the information for you as well as handles loss mitigation.

You do a phenomenal job with that. You have great online system where people can log in and see what’s going on and be alerted to things. If you’ve ever been deposed in a foreclosure case like I have, it is good to have a servicer because the attorneys will ask you questions, “How come you ended up with that?” I’m like, “That’s the licensed servicers that handled that. It’s not me. They’re my servicer. You want to call them and we can depose them,” and they don’t like to do that. If I had been the person self-servicing, I would have get hammered and I would have lost the ability to foreclose on those loans because I couldn’t give them a true answer to that how I was expert to that or how they’re adjusted because they had all these questions lined up. The minute I said, “It’s Madison or somebody else,” those questions went away. That’s a big monkey off my back.

We keep all the records so it saves you.

Let’s talk a little bit about the timeline of a note being transferred to a servicer because I think a lot of people have a misconception, especially brand new people. I’m not bashing the brand new people because we all have to start somewhere. Let’s talk about the unknown because a lot of people, when they close on a note today, they think that everything is going to happen by tomorrow.

Unfortunately, no. We wish and I wish for you too but no.

Why don’t you outline the steps and the timeframe of that so people have the idea?

I’ve narrowed it down from start to finish, from when you close on your deal to when it’s a 100% service transferred, goodbye letter sent out, whole nine yards max 45 days. I’m at that 45-day range. Here’s why. When you are finally closing your deal, you’ve provided your seller with all your information, who you are, who you want servicer to be, where you want your collateral file to be sent. It is now up to your seller to start to get that ball moving. That’s where I’m realizing a lot of time is being eaten up because your sellers aren’t dropping everything eager to get that information over. Most servicers have a deboarding process. Your seller has to go to their servicer, handle their account closing for that loan that you just purchased before that servicer will even begin the transfer process. We do the same thing here. That alone takes up some time but this also falls on to your seller. Then once everything is clear there, that servicer will generate a goodbye letter transferring the loan servicing to Madison or whoever your servicer of choice is. That goodbye letter has to be approved by Madison or whoever the servicer is to make sure all the information is correct.

Once that goodbye letter is usually approved, they end up sending you the preliminary data. That chunk of time takes a little bit because you want to verify the information that you’re getting. I’ve been seeing a lot lately, UPBs are higher than the original loan amount and I don’t know where that comes from. It takes a lot of going back and forth. Little things like that new servicer and what I do is I have to verify some of that information and make sure it’s correct. Not all servicers send you digital copies of the collateral file. I don’t know about the other servicers but Madison requires that. Your loan will not get boarded if you don’t do it, if you don’t send digital copies. I don’t need the hard copies. I need a digital copy and that’s one, so we could verify your loan and two, start to get you audited. We have to be able to prove that we have the right information and it matches the note and the borrower’s name is correct. Your assignment chain is correct. We have to have that.

The flipside to it is your new servicer, people like me, we have our set up process as well. Other than just boarding your loan, we need to make sure that you paid your deboarding fee. It’s a flat fee across the board. It’s $40 per loan unless you board ten or more, that fee goes out $30. That also is taking up time. What we’ve been pushing is having our investors fill out ACH forms. It’s so much quicker, we’ll just pull it. You’d still get an invoice. We still notify you. It’s not like we’re going to take your money. Once we get all that information and everything checks out, we’ll set up your loan. We’ll then generate a hello letter to match the goodbye letter. Then depending on the servicing program, if you’re going to performing or non-performing depends on the email that you’re going to get from me. It lets you know that your loan has been boarded in the date your hello letter will be mailed out if it hasn’t been mailed out already. If it’s assigned to one of our asset managers here, it will be an introduction to them.

A lot of our investors are using third parties such as Daniel Singer’s Law Group and Polaris, which is perfectly fine. Those emails, you get notified, “Here’s the loan that we’ve reassigned. If you need help getting onto the portal, let me know. If you have any more loans to board, let me know.” It takes time. Transfer process, transfer dates are fourteen days out from the date the letter is mailed. There’s some legroom in days that you have to add in to fill holes and give everybody enough time to do what they have to do.

We ran into where the seller of some of the assets that we bought hadn’t paid their servicing fees with the previous seller. That dragged out servicing transfer taking place too. A lot of people don’t realize that where things were getting dragged out to 30 and 45 days which is very annoying and a pain in the ass. I’m chewing ass from people like, “What the hell? We bought these 45 days ago. You are now costing me money because I got borrowers that want to pay.”

They don’t have someone to pay.

I don’t want people that they’re yelling and they come to you, “Are you, Shante?” “No. Shante is just waiting. She’s sitting there like a catcher ready to catch that pitch from the other servicer as long as they’ll give off their ass and go do it as far as the seller will go and pay their servicing fees.” That’s one thing to keep in mind. You brought up two companies, the Daniel Singer Law Group and then also Polaris which are two special servicing companies. This is new. I know that the Singer Law Group is looking at probably going to a minimum of requiring people to have five files with them before they’ll do special servicing because of growth and things like that. You have a full asset management guys. They’re on investor’s behalf to do the workout as well. Let’s talk a little about that transition. People that once they get their loans boarded, you hand them off to who at Madison Management?

NCS 223 | Madison Management

What they end up doing, if you get that welcome email, they end up skip tracing your borrower. Making sure we have updated contact information on every loan that comes to the door whether we’re handling loss mitigation or not.

I have asset managers here who are like other special servicers. What they end up doing, if you get that welcome email, they end up skip tracing your borrower. Making sure we have updated contact information on every loan that comes to the door whether we’re handling loss mitigation or not. We run PACER bankruptcy scrubs. We want to make sure that we’re staying compliant, not sending your borrower late notices when they’re on bankruptcy because we’re not supposed to. Just so we know as well and then we let the lenders know. Asset managers will handle that and will email you and ask you what your game plan is. Usually, asset managers handle non-performing loans. They handle performing to play catch up and handles your point of contact, but you don’t have to deal with them too often. They really won’t bug you if they don’t have to.

For non-performing they ask you, “What’s your game plan? I see you have this note. They’re delinquent X amount of months, X amount of payments. What options do you want to give your borrower?” A lot of investors, they don’t always know. We don’t expect you to know. A lot of lenders don’t know. They are also new so we actually run through all the different options that are possibilities. Some investors say, “I don’t care. Find out from the borrower and we’ll narrow it down from there.” Then you have some investors who are like, “Absolutely not. I will never do a trial payment period. I only want the loan amount or a full reinstatement.” We work off of your instruction. We don’t make decisions for you. You have to tell us and we just act. We act in your behalf which is why it’s so important no matter who your asset manager is to stay in contact with them because we can’t make a decision and can’t make a move without your approval.

You will collect information like what the borrower’s financials are, what are they looking for. It always helps if we can give you some game plan, “We’re willing to reinstate if they can start making existing payment plus a $100 a month. We’ll do a trial payment plan for six to twelve months. We’re willing to do Cash for Keys and offer them up to $500 or $1,000.” Those simple things can make your job so much more easier, effective and also escalate that time much faster to have a resolution and recoup the capital, correct?

Yeah. We try to get the majority of that stuff done with the first 30 days. We want to get the borrower on the phone immediately, which is why we talk to you immediately. Don’t disappear on us.

That’s an unfortunate thing. A lot of people treat their loans like they would treat their kids. They’re just going to drop them off at the school bus and let the teachers handle it.

There’s that point where you can almost do that, but you still got to stay in contact especially in the beginning, we don’t know what we’re doing. Once the borrower starts paying, that’s fine. Other than that, we have to run off with you.

You’ve got to be the gem of who you are, of your company and direct it to you. You guys being the head coach basically is a good way to say it and you’re directing the asset managers or the borrowers to either, “Put up or shut up,” and then start the foreclosure process. You work with a variety of attorneys across the country. Some of those have their own foreclosure attorney. You’ve got a staple of them I guess you could say, right?

Yeah and we’re still collecting them.

If somebody is working with an existing attorney, it’s easy to get him added on as a preferred attorney with Madison Management to make things happen there for you. You communicate really well no matter who it is whether outside vendors, third party insurance, things like that. You are also collecting and finding out if the insurance is current and the property correct from the borrowers?

As long as they’re giving the information, that’s the biggest misconception with the escrow. We do handle escrow services. Taxes are pretty easy because we can request the bill, but I don’t know what everybody’s insurance company is or by county so not every borrower has insurance either. That’s the harder part of escrow. Once we have who it is, we will contact them, find out, “Is everything okay? When is the next bill due? Send me a copy of the declaration page and bills. We need to forward it to Madison so we can be sure that they get paid.”

It’s important to do that. That’s the beautiful thing is we are in the process of uploading a new internal system for us, tracking system for stuff and then matching it up with you and stuff like that. You are doing a great job with that as well. It’s easy when you have good communication lines, which is one of the most important things. We’ve had other servicers; it took forever to get communication back and forth. We get emails the day before an auction when we’ve been requesting information from them for months. We’ve seen email like, “You’ve gotten emails last month but you didn’t forward them to us.” That’s not the Madison Management difference. We’ve talked about the servicing, we’ve talked a little bit about the boarding, we’ve talked a little bit about the workout strategies and how important that is for us as investors to do that. One of the big things that everybody talks about are these big goals, “I want to close on 100 deals this year.” One of the great things that you also do that goes unknown is you also do a little bit of the collateral holding. Instead of hiring a third party from somewhere else, you are actually holding on to people’s collateral.

We house collateral. It’s a $30 annual fee per asset. A lot of people are taking advantage of it off the string. We don’t want to send it too far and their whole idea is, “Madison is servicing it. Madison has all the other information on it, they might as well hold it.” If you ever sell that note or remove the loan for servicing for whatever reason, we’ll send the collateral either back to you or wherever you tell us to send it. If you don’t give us a response within a certain amount of time though, I don’t want to keep holding it. I’ll actually send it back to you. There’s a period of tracking the whole nine, it’s saved in a fireproof safety deposit box. It’s good for people who don’t want to keep these files in their house either. I know personally, I would never keep them in my house. My son draws all over everything and writes his name a thousand times. It’s cute and it’s adorable and I’m very, very proud of him but not on someone’s deed of their house. It’s not going to work. A lot of people will send them off elsewhere but we make that an option if you choose to have it sent to Madison. It is not mandatory. We only require the digital but it is an option for you. The only thing it costs you is $30 for the year.

That’s phenomenal because that’s actually cheaper than a $5 or $10 a month in a lot of other places charge. Honestly, you need the file in the frontend more than anything on the backend once you get things rock and rolling and have a way of getting the foreclosure process started or those things. You need the file, let’s not get that wrong. The attorney is going to need the file to foreclose, but it’s all good because it’s in a one-stop shop there for you. Speaking of shopping, let’s talk about your portal because you also have an online exchange where you also offer loans for sale from your existing clients or other people posting their loans for sale on the exchange as well. Most people don’t know that.

NCS 223 | Madison Management

One of my goals for the year here is to advertise that more and make it known because it almost sounds like a hidden secret, which is cool but we want you to know.

They don’t. One of my goals for the year here is to advertise that more and make it known because it almost sounds like a hidden secret, which is cool but we want you to know. You have an option as well. We have lenders that we either service for, we used to service for who really had to transfer their loans or whatever the case maybe. They’re looking for buyers on their notes. Then we have sellers, new investors who are like, “I don’t know where to go. I don’t know what to start with.” We have a sales portal that allows you to browse through and look through whatever loans are listed. If you choose to list your own, it walks you through how to do that, the information we need and then you can always request for more information and end up getting to talk to either myself or one of my co-workers. He’s been here for four years, Damian Hernandez. He manages that with me. We go through it back and forth and provide you the information. If you choose to bid on it, we will negotiate that between you and the seller. We will draft out that purchase and sale agreement. We will draft out the new assignment and the allonge. We will handle everything for you. You have to look at it and the buyer. That’s the only way we’ll get the ball moving.

It’s a great extra thing people to have. One of these we’ve talked in the workshops is that servicers often represent investors like you and me, and they often know who has got some stuff that they’re looking to move. Reaching out to the business development or the office manager or the servicing company to bid on a size is a great place to find pocket deals for the most part. The idea is that you want to keep the servicing with the existing servicing company because nobody likes to sell their loans off and cost them business. It’s a great source that a lot of people don’t think about.

Not all those loans are even serviced here. There are some New York State loans that we don’t service, traditional mortgages, that are being serviced over another servicer but they don’t have a place to list it. We don’t tell you no. We put it out there. If we get some feedback, it does. If you want to take it down after a while, take it down.

We’ve talked about the self-servicing mistake. Are there any other mistakes that you see investors are making on a regular basis, if they don’t know about that they’re making or maybe they just need to have their head shaken in or hit with a bat just doing those things? Servicing, their loans, mistakes you see investors are making.

It’s more so what I think they’re lacking. I think it’s just the knowledge to be honest. A lot of investors I’m noticing, they don’t understand their transfer process. When you close on a deal, we’re all so excited. You are proud of yourself, you’re like, “I can’t wait,” but it’s the steps after that. Things don’t happen overnight. As much as I would love to make that work for everybody, it doesn’t happen that way. It’s not realistic. Patience is going to be everybody’s downfall. I don’t have patience so I totally understand it. It doesn’t fit my Type-A personality. I understand how people get upset or need someone to point their finger at. Sometimes it comes down to me and I understand. I’m not going to hate you. I understand you’re not informed 100%, which is why I always push, “Get the knowledge that you need to keep moving forward and to be patient.” You can ask me anything. Shoot me email, “Shante, how does this work?” I might not even handle it and I will let you know I’m not the one who handles it, “You need to go talk to an attorney. You need to go talk to this person. Go back to your seller, request this.” I will point you in the direction of that. I will help you, just ask questions. People are so afraid to ask and they’re afraid of bothering people. Bother the heck out of them.

It’s good to ask questions. If you don’t know, ask questions. You’ll get an answer. Also if someone gives you an answer, don’t ask him that same question the next day expecting a different answer.

That’s why I like email because at least I can send it to and you can have something to refer back.

You’ve got a track record of things like that or a paper, email trail or like that so you can see things going back and forth. I’m looking at it before I send an email, “Did Shante already answered this?” I’m doing a search here, “I’m sure she probably already answered this and I missed it in my barrage of emails.” One of the great things too if people need to get a hold of you, they need to reach out to you in the office before 3:30 East Coast time because you head home.

Except for most Thursdays. Most Thursdays, I’m here until 6:00 or 7:00. Most of the time, it’s before 3:30 PM Eastern Standard Time. It’s been really hard lately for people to get me on the phone. My phone doesn’t stop ringing. I barely even have enough time to get up and then run to the restroom half the time. Then I’m playing catch-up the next day. I’m also available on Saturdays now. I’ve been spending the last two Saturdays. If it came down to meeting, I’m in the office. I come in the office. I’m here for a few hours. I have nothing else to do at that point. I split custody with my son. If I could live here, I probably would. I’m down here more often. If it’s needed and if I can’t get you through the week, I have made exceptions. It’s planned out. It’s not one of those, “Call me,” because I had mentioned phone, my phone is actually turned off. But I will gladly make way to call you, if it’s needed. I don’t sit on the phone all day on Saturdays. I have other stuff to do.

You have seen quite a bit influx of some new investors closing deals over the last year, which is phenomenal.

Since July, it’s gotten crazy.

We’ve seen some people get started off brand new and then really roll into bigger pools like Adam Adams, for example, Wayne Snell. They are some students of ours, our mastermind members making some things happen. You are going to be at the upcoming Distressed Mortgage Expo?

Good old New Jersey, it’s in my backyard so you know I’ll be there.

How many asset managers do you have there right now?

Three. A lot of our loans we’ve noticed are either under our client-managed no collections programs, which is where a third party is handling loss mitigation. A lot of them that actually come in recently are performing. I’m shocked. We have this influx. I don’t know what’s happening but I love it. Performing doesn’t need too much care. We monitor it. We get them rolling out the gate, just making sure the payments start to come here. The escrow is set correctly but other than that, the borrowers if they need to call, they call. We try to get every borrower sign an ACH or have them make payments through our portal so that there’s not much that lenders have to do or borrowers have to do, which means that there’s really not much that we have to do, which is once a month payment.

Your portal is really good because we’ve got a lot of the borrowers that we we’re working for initially that have responded to our special servicing in the first couple of weeks. They’re ready to make payments even before it gets boarded over there, which is a beautiful thing. At the same time too, you send emails, “This borrower called. I know we don’t give you special servicing but this borrower wants a deal. Why don’t you give him a phone call to work it out?” It’s works out really, really well. I know Jen does that on a constant basis. What are some goals that maybe Madison Management has for this 2018?

NCS 223 | Madison Management

I love experienced investors too, but I like knowing that I watch them grow.

I love new investors. I have a thing for them. They’ve become my favorite people. I love experienced investors too, but I like knowing that I watch them grow. Some of your students that I talked to in July also are on-boarding loan after loan. I was like, “Where did you come from? You’ve only just started this a few months ago but I love it.” I know we are obviously looking to grow even more. That’s always our goal. New investors, new loans. We did create something new and it works for any non-performing loan whether it’s under our full collection servicing program or our no collections. We created a Loss Mitigation Portal. It’s totally separate from the web portal. We send out financial applications to the homeowners. We usually mail them out. That takes time. We have to wait for the post office to come pick it up, go through the process and drop off to person’s house and then half of them fill it out.

Kevin, because he has an IT background, had created this loss mitigation portal. What it allows these borrowers to do is to register. There’s a link on their end of the portal as well. Go through, fill up the application and upload the required documents. These are the documents that Madison uses and I’m pretty sure most other servicers have something very similar. It’s to gauge a borrower’s financial situation, to try to work out some agreement, modification, forbearance, reinstatement, what do you have. The cool thing about it though is it also allows for the client to manage the loans. It let’s these lenders who are servicing or handling loss mitigation on their own, take a backseat. What happens is it gets uploaded and all we do is forward it to the lender, “Your borrower completed this. Go through it.” At that point, all the numbers are there. You can base everything out of there. If you’re missing anything, you know you can call your own borrower. It’s sent to you through your email, through your shared file. We’ll upload it to you. Then you can go through and work out the terms of an agreement through that knowing that the borrower has an extra $1,000 every month after everything is paid and done. It’s brand new. I’ve tested it out pretending to be a borrower. There’s a messaging system in there for the borrowers if they have questions so they can always call in. It takes less time for investors going back and forth with their own borrowers. It’s less time for us having to wait on the mail. So far, it’s been a decent hit though.

That’s huge because that expedites two weeks. Let’s face it, borrowers don’t always open their mail. You give them a link to go to, “Fill out your financials, upload your tax returns or your W2 or your pay stubs.” That’s a huge, huge thing to expedite time and increase the velocity of capital. That’s just much more with a little bit of extra of the Madison Management difference. I want you to know, we have a goal here. We want to be the biggest referrer of new accounts to you.

I think as of right now, you are.

We want to do more. That’s a good thing. We are pretty jacked about that. You want to have more businesses. Have you got any number goals without sharing out there? Anything you can share without sharing I guess.

We want to double what we did last year. I dove into marketing a little bit more this past year 2017 for the past six months. I love what I do. I absolutely love it. Everyone has something to say about servicers. I love every aspect of my job. I love the people I work with. I’m not going anywhere. Goal is take over the world thing. Because of that, we want to keep growing. Madison has the potential to be bigger and people give us good feedbacks. We love suggestions. I know Jennifer was telling me one time she had an issue with something. I’ll get it fixed for you if it makes sense. If you need it, nine times out of ten, other investors are going to need it and that’s how we think about things. We will make changes to fit the betterment of the investors that we work with and their lives easier. Even if it’s just, “This isn’t clean, it’s not clear, fix it.” Your suggestions are always helpful. It doesn’t matter if you have one loan here. There’s no limit or if you have a billion loans here. It doesn’t matter. We take your suggestions. If it doesn’t work, I’ll be honest with you and I will tell you why it doesn’t work. It might not work today but it could work in the next three years. Madison is trying to keep expanding and hopefully the goal one day is also be able to originate homes. I think that we’d pretty cool to add to our list of things that we do. We want to be a true one-stop shop. We’re slowly getting there.

I know that’s what Kevin talked a little bit about mortgage license to help start originating especially some of these owner-financed things or be that third party that people can use to help underwrite the owner-financed loans that way. It’s a way to add more files to your business by being an extra third party for things out there. You don’t discriminate against whether if somebody has a thousand loans or one loan.

No portfolio is too big or too small for us to handle.

Easiest way to contact Shante is via email, correct?

Yes. The easiest email for everyone to remember is Servicing@MadisonManagement.net. I have access to that email address. Then I’ll respond from my own. Even if you have questions, if you want to set up a call, let me know where you’re calling from and how you found out that information. I have to start keeping it down. I’m always curious, “How did you find out about Madison?” I always ask those questions and a lot of people are now saying, “I was with Scott when you did Note Camp,” or whatever it was. Things like that, let me know. Let me know where you’re from and what I can help you with. If it’s one of those, “I have no idea what I’m doing,” you need to start fresh, that’s perfectly fine. We’ll walk you through that.

You’re not there to educate them on everything but what you can for servicing, you’ll be glad to do that.

On the servicing side, I’m here.

You will be speaking at Note Camp 5. It’s hard to believe it will be the fifth that we’ve had in the last three years. We have a question here, “The market’s changed quite a bit in last five years. What’s been the biggest thing that you’ve seen in the last five years that’s been a big change?”

Five years is hard for me to go back to because what I am today is not what I was five years ago. I know when I came into the industry, I saw a lot of second liens, a lot of junior liens and that’s where Kevin started. That was his thing. Especially in the past year and a half to two years, everyone is telling me they’re having a hard time finding seconds. I have no idea as to why, but I had a conversation with somebody. I have this phone call to ask questions and he brought up a valid point. Before the whole market crashed in 2007 and 2008, people were taking out second liens left and right and a lot of them are HELOCs and because of that, the ten-year trial period, they’re all about to end. They’ll be backed up and ready to be sold. Madison started really servicing seconds at first, specializing in that. Now we don’t discriminate. Hopefully, we’ll see an influx of that. I know a lot of the investors that are older that had been around even before I started, they haven’t brought anything new because they only like seconds. They’re having a hard finding it.

NCS 223 | Madison Management

Note CAMP 5.0

Plus there’s not a lot of seconds having been created over the last five years. We had a lot created in 2006, 2007, 2008 up to the crash and then the crash happened, and we didn’t have a lot of seconds because everything was upside down. As we’ve had the growth over the last couple of years, more seconds are starting to be created a little bit and the seconds are HELOCs or people cashing out directly and stuff like that. You’ll see an influx of it but still, if you think about it, for every one second mortgage, there is probably four to ten first created if you look at the numbers out there. The inventory of seconds dropped dramatically. You still have a lot of demands. The pricing of seconds have gone up dramatically because of the scarcity factor of things. We see a lot of seconds guys or gals coming over to the first side because they’re still looking to invest. They’ve got to do something with their money. Seconds are cheaper to buy because it’s a much smaller balance, which is great. With the seconds, you’re going to actually probably need to be buying five to six because you’re going to have two or three that didn’t work out and two or three can’t put in a file folder and wait around for a while. What I love about first is that we’re always going to have something happen at the frontend to make things happen.

The website is MadisonManagement.net. Make sure if you’re reaching out to your brand new note investor, tell her you heard it here on The Note Closers Show, the Scott Carson podcast. You’ve got a big goal to close on some notes yourself this 2018. When we switched our servicing to everything to Madison Management, we saw a complete influx in profitability. We saw a much higher return on our capital because you do a tremendous job. You are very busy. You’re a lien mean note servicing machine over there. When you guys are taking it on, it’s hard to step aside, buy some of your own assets when you’re so busy working and helping everybody else’s portfolio. On behalf of all our students and all of our clients, I want to say thank you to you, Kevin, the whole team over there because you guys do a tremendous job. We hope you know how big of an asset we consider you guys as part of our team.

Thank you.

If you need anything, we are always here to help to knock things out as well and reciprocate any way we can for you. Do you have any final words, Shante, for anybody out there?

You out there, start buying and give me a call or shoot me an email.

One thing we didn’t ask, how important it is for them to contact you before they buy a note? Should they do it a month before?

Do it now. Start sending me emails. I will let you know how to get set up. It doesn’t cost you anything but twenty minutes of your time. That’s really all it takes. Get yourself and your entity that you’re going to be buying your notes under. Get that set up here. It will wait for you. If it takes you another 45 days closing on a deal, you’re already setup. If you don’t do that, that 45-day window from start to finish, that extends to 60. Get it done. It doesn’t hurt. That form is online. I can email them to you. It’s very simple. It’s three different forms and that is it. That is all I need from you before you get a note. It doesn’t cost you anything but twenty minutes of your time. Get that done.

Shante, I will you see in New Jersey for the Distressed Mortgage Expo. Thanks Shante, I appreciate it.

Thank you.

Things are rock and rolling here in the office. Have a great day. Go out and make something happen. We will see you all at the top.

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