When it comes to deals and due diligence, thinking about the paperwork and documentation can be quite daunting because every deal can be different. Joel Markovitz talks about the collateral aspect of due diligence and stresses the importance of knowing what you need and what you do not need in documenting files. He shares his routine or process for handling notes, including looking at liens and judgments and what it means to him. He also talks about summarization of payments and answers questions from the audience about how to handle documents, the vital things to look for in the title insurance policy, and more.

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Listen to the podcast here:

Deals And Due Diligence with Joel Markovitz

First, before we dive into the deals and keep you around because there are some great questions we’re getting from people. I thought we would bring on the man, the myth, the definition of coopetition, our buddy, Joel Markovitz. Joel, what’s going on? How are you doing?

I’m good. How are you?

I’m good. Let’s dive into what’s going in the collateral files and some stuff like that. I’ve gotten a lot of questions about that. I also know that you’re doing a lot of collateral view for people. People who are getting deals under contract and wanting to have somebody help walk them through and hold their hands through what they’re looking at. That’s the idea of having you on.

I appreciate it. Thanks. One of the things I want to walk through is what it looks like. I want to go through it because every deal is a little bit different. It’s important that when you’re looking at a deal that you understand there could be different things coming into play. What I do is I have a master spreadsheet and I’ll look at all of the documents and then I’ll start to put the pieces together. When I get something from somebody, there could be 400 pages of stuff and there could be six different files. What I try and do is I try and look at everything and then put the pieces together like a puzzle. Then I’m going to match the pieces from there, if that makes sense. You can get a very simple file like a first mortgage. You have a first mortgage and in the first mortgage, generally there will be an O&E report. Some will provide me a BPO or provide me with the collateral documents. Sometimes what they will do is they will provide the origination file. They’ll provide all different things. If it’s a CFD, they’ll provide everything that they are ever given. Sometimes it’s important to know what you need and what you don’t need.

Certain things will provide you with different clues as to what is going to contain or what’s not there. I don’t presume to know what everybody’s thinking with regard to how they evaluated a note. What I do is I take what’s provided, I give you that information and then I ask questions. Meaning if there’s a missing assignment, if there are missing servicing comments, I’ll say, “Do you have this?” I do have copies of the servicing. Do they provide that to you? Are there pay histories? Sometimes I’ll get pay histories that are only two or three months old. What’s before that? Because it doesn’t give us a total picture of what we’re trying to illuminate. I try and ask questions, present the information, point out anomalies and at the same time ask the question, “Did you know?” It’s not my place to make a judgment for you because you know best what you’re looking at, but give you the information to make the best decisions. That’s what I try and focus on.

That’s all you can do. You’re looking at the collateral file, you’re not pulling values, you don’t know if it’s occupied or vacant. You’re just looking at the documents that are in front of you, the documents that were provided and giving a black and white view of what’s there, what’s not there.

You can get this information, O&Es or BPOs. I know a lot of people have been using Dickie Baldwin at Baldwin Advisory Group. You can get that type of information and then I’ll in essence interpret it. For instance, I have an O&E report that came across my desk on an asset and there was a mortgage on it that wasn’t in the O&E report. It didn’t show me that release from 1998 but subsequently, 2011 going forward, there was a new mortgage originator. There are two or three assignments in the file. The individual that showed it to me, the question was, “Has this not been released?” We have to pare through it. Sometimes they didn’t do a release. It doesn’t mean that the mortgage hadn’t been paid off. We look at those things, we look at the anomalies. I’m seeing more of these. You’re buying a contract for deed, you have the quick claim deeds and you might have three or four quick claim deeds. In their file may be an assignment of the land contract twice, but it’s missing it for a third or at the beginning. If there’s a special warranty deed at the start, how does that all have a place? Those are the types of things that I spent time looking at.

This is the spreadsheet that I start out with and I aggregate all of the information. The first thing I do is see if there’s a loan number. I’ll usually get that from servicing comments or pay histories because that will tell me that it’s with a licensed servicer. For a decent amount of time, I can go through and I can figure out who the servicer is just by the servicing comments or how they’re formatted. Sometimes I’m right, sometimes I’m wrong but for the most part it’s good to know because the more times I see those things, the better information I have in understanding who their systems are and what that really means. We’re going to pull out the owner and that’s the current owner. The first thing I do is I start at the O&E report. If it’s a contract for deed, then generally that will be an entity name, but I also will include who the land contract is because that’s actually the important piece of the puzzle. We also want to make sure we know who the entity is, all the deeds, if they’re quitclaim deed with regard to the contract for deeds or if it’s a first mortgage. Obviously, some of the basic items are the address, the city, the state and the loan type. That would be a first or second or contract for deed. Eventually we’ll get to the status. What I mean by status is, is it performing? Is it semi-performing or is it nonperforming?

When at reviewing the collateral file, that will give us that information. Is there a forbearance plan? I have something that I looked and there was a forbearance plan, but it wasn’t a hard copy of it but there was a forbearance plan notated in the servicing comments, obviously, the principal and interest. I will make a notation with a little commentary. I will add a comment, if there’s the PITI and then the taxes and insurance. We have that. I provide you with the principal and interest because if you’re going to verify, these are where you’re going to verify your calculations. We’ll talk a little bit about the O&E report. The O&E report will come back whether it’s from ProTitle or from Dickie at BAG, and it will provide the different information. The first thing we’re going to do is who owns the asset. At that point in time, what we’re going to do is we’re going to look at the chain of investing. I’m going to review the report itself and then I’m also going to look at the attached documents and make sure that they substantiate, that there’s not some variant in the report itself. We’ll review it and we will point out any anomalies with regard to assignments if it has all the tenants filed or a list of these tenants on the asset. We’re going to also look at taxes, whether they’re current or delinquent, and if they’re pending, if taxes are due in May. Whatever the case may be, we’ll also notate that.

We’ll look at liens and judgments. I think this is the piece that I think that people will probably have the most interest in, liens and judgments. What does it mean for me? I saw one, it was performing and there was a civil lien and then there was also a tax lien on it. It’s about what you want to do with it and presenting you with that information. Meaning if there’s a tax thing on it, how does that affect what you’re going to do on the purchase side? It’s important for me to know, to have a sense of it. If you have a tax lien and say it’s an IRS or it’s a state tax lien, most likely that will impede us because if you’re performing loss mitigation or you’re foreclosing on the property, if there is a tax thing on there, then you can generally apply to that regulatory agency for them to remove it once you take ownership of that asset. The underlying piece of information that they want to know is will the borrower receive any material benefit? If you show that the borrower will not receive any material benefit, then you can get those types of liens removed. If you have a civil judgment, generally when you foreclose, you’re going to wipe them out. If you’re not going to, then the question is, in this case of a performing loan and you want to clear title, then you’re going to have to work with the borrower and how to resolve that.

There are certain municipal liens that are very difficult to get removed. In the State of Florida, generally with code violations, you can negotiate with them. You can negotiate usually down to anywhere between 5% and 10%. They may have been there for a year and it’s $150 a day and you have $30,000 in code enforcement liens on there. Once you take possession of it, you can work with and obviously you would have that conversation prior to acquiring the asset or moving it all the way through, but they’ll generally negotiate with you. Case in point, the City of St. Louis. The City of St. Louis go with the property. If you see something in there, that’s going to go with you and you’re going to have to resolve it and they do not negotiate. I’ve tried. Usually sewer and trash liens, those are generally non-negotiable liens. Code violations you can generally get those negotiated down. We’re going to include all of that in the O&E report and all that information that will come off of it.

We’re also going to look for the land contract, the mortgage or the deed of trust. With a non-judicial state, then you’ll see it, you’ll have the deed of trust. We’ll mark that it’s there and that there is an image. If the image is a certified copy, we’ll also notate that if we don’t find the original and we’ll make a note of all of those things. It’s the same thing with the note. With the note, what we’ll do is we’ll take the note and we’ll verify the BNI payment. We’ll verify it and what the note says with the payment with the pay history, making sure that they’re all in alignment. If they are and if the note has $500 payment and the borrower is making a $400 payment, what we’re going to look is why is that? Was there a modification? Was there a forbearance plan? Usually there’s a very good reason, but we want to make sure we’re looking for anomalies, we’re looking for items that stick out. If there’s a copy of a title policy in the file, usually that would be upon the origination. We very rarely, if ever, see subsequent title policies once past the origination file.

I want to talk about the assignment. I have two columns. I’ll add them if there’s more than that. You may see five, six, seven, if there’s been a securitization and that it’s come out of securitization, then there’ll be multiple assignments in and out of that securitization and then into the seller usually. We’ll look at that and making sure that chain is complete. If the chain is incomplete, then we’ll point out that anomaly. I had something that I looked at that there was an anomaly and there wasn’t a complete chain. I pointed it out to the gentleman who was looking at the assets. They then went back to the seller. The seller was able to provide them with that information. We made an adjustment to the report. What we’re going to do is we’re going to look at the deed and in the case of this, sometimes there’s a warranty deed and that generally will be with contract for deeds. I saw one that there was a warranty deed and it was part of a deed in lieu.

What happened originally is the borrower had taken out a mortgage. The loan was sold to a group. The group then took on the mortgage and then negotiated with the borrower to do a deed in lieu of foreclosure. Meaning they gave back the property in lieu of him foreclosing and therefore, they issue a special warranty deed on that. We’ll then take that special warranty deed and then we want to look and see if there are any quick claim deeds and how that goes. Especially on the contract for deeds, we’re going to look at the chain of the deeds and making sure that there is a complete chain, that there isn’t anything missing. If there is, we’ll point it out. A lot of times these things are easily resolved, but if you don’t know what to resolve it, then you don’t know what to ask, especially when you’re new into this space.

We’ll also look at the allonges. An allonge is just the endorsement. If you ever write a check to somebody, it’s the back of the check. It’s the endorsement and making sure that there’s a corresponding allonge to any assignments that are in the final. Meaning in his first mortgage, you can have five or six assignments, then you should have five or six allonges. Sometimes the allonge is as simple as a stamp, the original mortgage or note, and it will say, “Pay to the order of,” but that’s an endorsement. Most of the times what we’re looking for, what we see now in our files is there will be an allonge and the allonge will be in a separate page. It will be the date it was originated, the amount of the mortgage, who was sold to and basically pay to the order of. If there’s an assignment, and then there should be an allonge. If there isn’t, then we’re going to point that out and make sure that you know to ask those questions. We’re also going to look at the fact that whether it’s recorded or not, a lot of times in collateral files, I could see five or six different copies of the same document and three of them may have been recorded and two of them may have been not. It’s important to see if it’s been recorded or not because you, as the buyer, you want to see where it’s been recorded.

In essence, what we want to do is we want to match up the allonges or assignments with the O&E report, making sure that they correspond. A lot of sellers, especially in the second space, they don’t record the assignment, so you may have three or four assignments that need to be recorded upon acquisition of an asset. Therefore, it’s important to make sure that you designate those to record first, record second, record third, put a notation there or make sure that’s designated to whoever’s going to end up doing those recordings. If you recorded out of order, you have to go back and create a corrected assignment. We do see that. I saw that on something where someone had to get to correct the assignment because the assignments were recorded out of order.

What we’ll do is we’ll provide a summarization of everything that’s taken place. What we’re like to do is we’re going to look at the pay history. I’ll start with pay histories and we’ll talk about servicing comments and then BPOs. The pay history is just what it is. It’s the history of the payments from the borrower. Sometimes when they’re sold, many times you’ll get a break, for lack of a better term, in the pay history. You can have three payments. If a loan was sold and it was service transferred back in December, from that servicer you’re only going to see from December to current. What happened before that? I try and look at that as long far back as we can in order to get a better understanding of what’s taking place on the loan. Each loan is different because of where it’s located. It’s different because of the borrower. It’s different because of the payment. It’s different for every other reason: value, unpaid principle balance, the assignments.

Every loan has to be looked at with clean eyes, meaning it has to stand up on its own because no two loans are the same. No two chains are the same and for what we’re doing here, our focus here is to make sure that when you’re going through your due diligence, that you are looking at everything and have an understanding of what’s there. We present the information and allow you to make the best decision possible on whether to acquire the loan or it’s not acquired, whether to negotiate, state your bid like you got the deal of the century. All of those things are important.

 

In summarization, what we try to do is provide a summarization of the pay history. Have the payments been made? If they have been made, how long have they been made? If they missed payments, when did they miss payments? Did they make up their payment histories? We look at all of that on the pay histories and we’ll go into summarization. We’ll also then look at the servicing comments. We’re seeing more and more things coming to us that have servicing comments that have more and more information. It’s going to tell you whether they’re making the payments on time, if they’re late, if there is a forbearance plan, how long the forbearance plan is. A lot of them will go into the servicing comments.

What we attempt to do is look through all the servicing comments, pour through that information and then provide that information back to you. Ultimately, once we look at their pay histories or the servicing comments, then we also want to look at the overall, if there’s anything missing and if it’s, for lack of a better term, a fatal or non-fatal issue. We look at those things in that manner. Taking all of this thing as a whole, taking this together, this helps you make better decisions. This helps you provide with better decision making when you’re buying the asset, when you’re selling your assets, when you’re acquiring. This gives you the information, it gives you power and the knowledge to make good decisions.

We have a question, “How do you define performing versus nonperforming?”

If there’s ten out of twelve, I’ll notate that they’ve made ten payments here. They made ten over the last sixteen. I’ll put it there. Anything that’s not perfect, I’ll designate it as sub-performing and let you then make that decision from there. If it’s not perfect, then we’ll go that way.

I like your list here. This is a nice, very well-put-together spreadsheet and checking things off and going from there. How long does it take you roughly to break down a collateral file, Joel?

Generally, what I try and do is I try and get these back between 24 and 48 hours. If there’s more than two or three, I’ll quote you a timeframe on there. The cost of the review is $150 per file. Once I send it back to you, then we’ll sit down. If there are any questions you have, I’m happy to get on the phone and walk you through.

It’s smart, it’s good stuff. It’s a valuable tool in case people don’t know what they’re looking at.

The whole idea is you don’t know what you don’t know and everybody gets better and more knowledgeable. As you and I talked about many times over the last couple of years is on these different assets, when you’re going through, how is your time best spent? Is it reviewing collateral? Is it sourcing products? Is it working with your vendors? This is cheap. It gives you a summarization. That’s like the O&E report. The O&E report gives you information, but if you don’t know how to digest the information, it can only be so good.

We have a question, “Can you describe the difference between warranty, special warranty and quick claim deed?”

The warranty deed is the deed on the originator. It’s the first one. The quitclaim is when you have the MMA. It’s an easy way to transfer ownership.

It doesn’t clear up title. Quick claim is basically used a lot when you have to double check because there are often liens and other judgments with a quitclaim deed transferred over. We have a question, “Are you working with the originals directly from the servicing company or are you going off of obviously copies most of the time?”

I’m going with copies most of the time, half I review originals. That’s probably not the best way because you’re going to have to get a bailee and there’s a lot of work that has to go through that because nobody wants to release the originals until the transaction has been concluded.

We have a question, “Are you still working with Singer Law Group or are you doing collateral reviews and workouts now?”

No, I’m not doing any workouts. That’s not what I do. I work with Daniel to help him, but I’m doing things on my own.

We have a question, “Where can you get the best training to better understand the collateral file more? Is it hands-on learning?”

I think it’s hands-on learning. The more you do it, the more you learn things because everything is unique and everything is different. No two files are the same.

I think Laura Blunk posted collateral. It was eight inches deep with five rubber bands. One of the things that we do during the Fast Track training is actually bring everybody in the office. I go get a couple of collateral files from some dead files on some regular first lien for people to flip through them. They can see what’s in the collateral files. We’ll give them a contract for deed files so they can see how much difference there is with different things. They have an opportunity to flip through it. I think it’s one of the most valuable things because they actually get a chance to see what’s in a file folder when they see original appraisal, the original 1003 loan application, the financials, the hardship letters. Some are thick. You don’t know exactly what you get. You’ve just got to look at some files. This is why we brought Joel on to talk about this because I think it’s so valuable to have someone hold your hand through it at first and walk you through it and make sure you’re buying something that makes sense that you can enforce. Everything’s there and go from there. We have a question, “What’s the most important thing to look for in the title insurance policy?”

In a title insurance policy, you want to make sure that the address is correct, that it’s in the asset that they have been insuring. The challenge that you’re going to have is once it gets down the road to where we’re at and we’re looking at these things, that insurance policy probably has had two or three different owners on it, but it’s a place to start. It’s nice to see it, but it’s not the be all and end all.

 

If that policy was good when it was issued, it doesn’t mean it’s good afterwards.

I would say that it was only a good one. It was perfect then and obviously things change.

We have a question, “I’ve been seen owner finance notes where a professional has done, meaning more than a few. How would you tell if they’re actually vetted the buyers? Would you ask to see the financial records I use?” I think what you’re talking about is you’re seeing where somebody is doing more than just one or two, then they have to go get an MLS to originate that. I don’t think that’s from somebody who’s doing one. I think it’s a good habit. It’s a good thing to have if you’re doing one or a hundred, having somebody to work the paperwork to make sure it’s uniform across the place. I would ask to see the financial records. I would ask to see what they looked at because there should be some loan application. That’s what a 1003 loan application is when we talk about it. It’s the four to five or eight pages loan application filled out. There are different loan originating software. We used to use Point quite a bit here or there’s another one we used to use where a loan officer is originating stuff. You should still have them take a look at it, see if there’s proof of funds, if they’ve asked for no down payment and things like that. You should ask to see those full documents. Not just the loan because I think there’s more that tells a tale about the borrowers versus just the note and deed of trust.

Note and deed of trusts are fine. A lot of times you will see that origination file. It doesn’t mean that it’s accurate now, but you get a sense of who the borrower is.

In sub-collateral files, once you get the hard files, there is stuff in it that you never expected to see like signed deed in lieu or hardship letters. One of the things that you want to make sure and ask too is look at the date. If they’re sending you a scanned file, look at the date of the scanned file. The mortgage had been sold three or four times and the scan has just been passed from one seller to another, they may have never gone back and scanned the new documents, the new assignments, the new notes.

This is a true story. I was meeting with a guy in Chicago years ago. I was in Chicago and he had some portfolio. He was telling me a story that they bought a bunch of loans from GMAC and there was a fire on one of the properties and they did their due diligence. They purchased the asset, they got their original collateral file. In the collateral file was a check from the insurance company for $103,000. Obviously, that went very well for them. They have no expectation. They figured they’re buying up a burned-out house. Reviewing the original file once upon proceed is just as important in knowing what you have up front.

You’ll see other documents and other notations in there. I love going through the collateral files because you’ll get checks, you’ll get signed deed in lieu, cancellations are signed. Oftentimes the contracts for deed, you’ll see a cancellation of contract already signed. They just need to be filed with the previous sellers and things like that too. It’s very valuable to take a look at. We have a question, “If we ended up owning the property, do we need to get another owner title policy and would you recommend the policy covered just the amount we have invested or the market value?”

Everybody looks at it a little differently. Are you talking about having an REO?

I think he’s talking about how you ended up basically taking the property back.

If you take the property back and you want to invest the money in a title policy, sure, you can do that. That makes perfect sense. If you’re dotting your i’s, you’re crossing your t’s, you’re doing everything the right way, you can do that. I know that there were some clients that we had at one point in time years ago, but they used to get a title commitment, not the title policy. It’s a little bit less expensive.

I highly recommend for where do you plan on selling the property for.

I wouldn’t over-insure.

I would do it for whatever you plan on selling the property for is what you would have. Joel, what’s the best email or a way to get in contact with to talk to you about setting up or have any reviews from collateral files for?

Use this one, Joel@RTBPartners.net.

It’s best via email. We’re not going to get out the cell phone because you’re busy driving through things. It’s best sending an email and follow-up that way. Let’s bring up the assets then. One of the big things too about this before we even bring the tape up and stuff like that, Joel’s going to be handling the bids on this stuff as well. If you want to submit a bid, you want to be submitting those to Joel. Joel is handling the sale of these assets for me because we’re busy enough handling things and I don’t want to hurt cats. Joel’s doing a really good job of herding cats.

Thank you. I appreciate the kind words.

I will be sending the tape out after the webinar to those on the webinar. That’s why I have not emailed that to you yet. I’ve actually just made a few changes to the tape. We’ve got some due diligence back in. We found out were vacant and the borrowers have walked on some stuff. Joel doesn’t have these updates yet on a couple of them. I’ll be sending that to Joel and then send it out to all of you and you all are going to be making your bids directly to Joel. Another question here, “Do I do CMBS, commercial backed securities?” No. If you’re going to buy a larger portfolio, something like that, these are one-offs for the most part. This is a total of 58 assets. I thought we’d just talk through some of the comments here. You see the addresses, you are going to pull your own values, you’re going to pull your own photos anyway. I didn’t want to spend time on that aspect of it, but I’ve got this re-alphabetized by the state, so it’s a little bit different than what you’ve got on your spreadsheet, Joel. I’ll just email this over to you as well.

The first one, we’ve got a couple in Alabama, one in Mobile, 1810 Ogburn Avenue. We just had a doorknocker verify that it’s now a vacant property. It’s a nice little three-bedroom, one-bath. I think market rent rates are $800 in the area here. You can see the unpaid balances roughly. It has been valued somewhere in the mid-30s but they had made some payments and it failed off. This is more of an REO sale at that point. It’s supposed to be in pretty decent condition. There are some older photos of the property online before this was originated, so you can take a look at that one. That’s 1810 Ogburn Avenue. It’s a decent area. If somebody doesn’t make an offer, that’s fine. We’ll list it to the local realtor and get the thing sold.

 

The next one’s in Montgomery. It’s 846 North Gap Loop. This one is actually in forfeiture. They last made a payment in May 2018 and then stopped paying. This one is a smaller UPB of $19,000 and they’ve got a rough value somewhere in the low-40s. It’s in legal with Brock and Scott, our attorney there in Alabama. In Birmingham, we’ve got one here. I’m not pulling numbers on data on this one. We have sent out the requested demand notice on that stuff. That’s also in legal as well.

What you should know is I have all the collateral files here in my office too, so we’ve got everything on these that is needed to be sent out. Once you’ve got an accepted offer, we can either send over the updated scanned file or we scan and send it over to you as well. Also, you should know that all of these are currently being serviced with Madison Management. If you need servicing records or things like that, it’s very easy for us to log in and deal with it. My staff is fully aware of Joel reaching out to them to get any information. Moving on from sweet home Alabama, we’ve got some stuff in Illinois, in Springfield. When you see it says SLG, that means it’s in legal with Singer Law Group. The next one in Alton, Illinois, is sub-paying. The last payment was May 31st 2019. We’re looking to move it because it’s been hit and miss with a borrower over here. They wanted to agree originally but then stopped, had been hitting it, so we’re just moving on with it.

Next one in Danville, Illinois is also in legal. The next one in Granite City, Illinois, the borrower is nonresponsive, It’s with the Singer Law Group as well. We’ve got another one in Cahokia, Illinois, 4th East. Another request of demand notice had been sent out. It’s with legal with Singer. One in Michigan Street is also in legal. I also went and put in here the last twelve months as of February 2019. We haven’t pulled the numbers for March 2019 yet, but you can see the payment stream on these, what they have paid or have not paid over the last twelve months for. We added the comment at the very end there for those who are going to take a look at these. Galesburg, Illinois requested demand sent out to get this borrower on this demand. If they don’t, then we’ll end up foreclosing and cancellation. This one’s got quite a bit of equity where it’s roughly in the mid-50s and $35,000 of the UPB. This one in Butte, Richmond, we sent homeowners a nonresponse. We sent it out. We’re just going to move to cancellation on this.

This one in Anderson, Indiana, we do have the land contract to start the forfeiture on this one. We found it. It was buried in a file folder, but we’ve got it so we can start that. It’s the same thing on Princeton, Indiana, it’s nonperforming, and the demand has been requested. Cancellation out to the next one here in Marion, Indiana. We’re moving forward on it. Next one in Muncie, Indiana here is in legal with Franco Barile. I have the affidavit actually in my truck to send in. I’ve got to notarize it to send over. That will be sent to Franco to start to cancellation on that one. There’s one in Knoxville, Iowa if you like Iowa. We sent out a demand notice to this one. If you like Kansas, we’ve got one in Leavenworth, Kansas. The homeowner’s been incarcerated. The mother provided proof of the hearing. We’re starting the cancellation on that one. We’re trying to get the borrower to sign off on that one. It’s just the cancellations depending on how long he’ll be around. It wouldn’t be the first one with somebody in prison. Joel, you’ve dealt with that before?

That’s all we had. Not in prison.

It’s the same thing here, send out the forfeiture notice to the one at 89 Ardmore Street. This is occupied. 127 Henderson, just in Pontiac as well down the street is occupied. We’re sending out forfeiture notices on that one. Those are pretty close. Steph and I drove by those. I think they are literally less than five minutes away from each other. 29 Elizabeth in River Rouge this is actually vacant at this point. Make an asset, not quite an REO, but pretty close so it’s a vacant asset at that point. 29 Elizabeth in River Rouge, Michigan. We basically requested demand, as well to the next one in Flint, Michigan here. This one in Kalamazoo, Michigan, 910 Dwight Avenue, the homeowner wants to create a new land contract to make payments. We’ve got an agreement in place and they didn’t fall through with that. We’ve sent out the notice of cancellation on this.

You may have potentially a homeowner who wants to stay in the property but they didn’t fall through on that one. 813 Backus Street, Jackson, Michigan, we had a realtor drive this one out. It’s got a couple of broken windows. Looks like it’s in pretty decent shape besides some clean up based on the photos. This has been vacant for about a month, month and a half from what I was told. It looks like there was a notice from the city. I’ve reached out to the inspector to get more information on that. 93 Rick Court in Battle Creek, Michigan. It is in legal with Franco Barile. Strap Morton, Detroit, Michigan, we sent out the soft demand notice on December, Singer should be further along in that.

There’s another one in Jackson, Mississippi, with a requested demand letter. I think it’s a pretty nice property, if I remember correctly. I was surprised. There’s a ton of equity. $85,000 value in the house we figured that is worth. 1820 Bloomfield Road is actually vacant. I actually spoke to the next-door neighbor. They may be submitting an offer on it. Kansas City, Missouri, 205 Crystal is with Singer Law Group in legal, the management sent. It’s the same thing in Park Hills. It’s the same thing on Cleveland Avenue in Kansas City. 3712 North 43 in Omaha, Nebraska, there’s no response sent to the borrower. It’s a nice little house with a ton of equity behind it as well too. It’s a great-looking little house. Somebody’s going to pick up a nice little rental there for you.

There’s one in 512 Oak Street in Lenoir, North Carolina. I believe this is a BK deal but the borrower has not followed through on. Joel would know that, be able to reach out to anyone out there at Singer Law Group. Toledo, 1690 Idle Drive, they have a loss mitigation. They sent in a financial application. They may be getting caught up. This is an extremely nice property in Toledo, Ohio. If they do make their payments, we’ll be pulling this. This one made some payments. They’re pretty much doing pretty much on track. They paid $1,400 in 2018 and then stopped making payments. I don’t know exactly what happened with that, but we’ll have an update here on that one.

One in Zanesville, Ohio, it’s the same for forfeiture, Ashtabula is for forfeiture as well. 1240 Board Avenue down in Massillon, Ohio. It’s the same thing, it’s with Singer Law Group in forfeiture. Whaley Drive in Trotwood, Ohio, we requested a demand notice, nonperforming. We don’t want Ashtabula. We do have recorded land contracts. We’ll start the foreclosure on this one. We’ll send this one to forfeiture. In 4329 Jackman Road in Toledo, Ohio, there’s a little bit of equity above what’s owed. 718 Fox Street, Sandusky, Ohio, we’ve sent to Franco for forfeiture. 1009 Walbridge in Toledo is also in Singer Law Group. 5827 Park Avenue, Warren, we started forfeiture but put it on hold. We’re trying to track down the actual homeowners. I should have an update on that. Actually, we’re on that one. There’s no homeowner contact, so we started the cancellation.

2116 Airline Avenue had made some payments, signed off on a new agreement, made a payment, but then stopped. Their last payment’s on February 19th but then NSF-ed, not sure that would have hit in March. We’re calling to see if they’re getting in, otherwise we start a cancellation. This one, Toledo 3114 Straight Streets is not a bad-looking property, but it’s supposed to be vacant because there’s black mold in there. If anybody’s looking for a project, there you go. 732 Dryden, we’re also tracking down the current homeowner on that for cancellation on that one in Toledo. There’s a duplex here in Springfield, Ohio, there’s a decent-looking little duplex. We’ve sent out the demand letters on that one. It’s the same thing with 126 Raymond Avenue in Shelby, Ohio. We started the forfeiture process.

Next one is in Springfield, Ohio. It’s another duplex, another updated address. The homeowner tracked him down through Skip Tracing. In Harrisburg, PA, we sent out the demand notice. Another one is in Turtle Creek, PA, the homeowner would like to try to sell the property if possible because there is a bunch of equity on that one. You may have a borrower that would be willing to do a deed in lieu or some Cash for Keys on that one. It’s relatively easy. A 1930 Street in Philadelphia is now a vacant asset. The borrowers walked away from that once. It’s now a vacant asset. The Texas City one is probably the most expensive asset on here. It’s occupied. The borrowers worked with us a couple of times doing a one-month trial payment plan and they’re not responding. We had a door knocker knock on the door. They wouldn’t make a phone call. That’s fine. We’ve started the forfeiture on this one. We didn’t finish this one out.

In Loyal, Wisconsin, we’ve got that going through forfeiture with Damien Waldman, their attorney up there. In Beloit, Wisconsin, it’s the same thing. We’ve got a demand notice sent out to them. Those are 58 assets there for you. This is not for you to be a joker broker about. Don’t be saying you’ve got this under contract trying to raise capital until you actually have it under contract. Once you submit a bid in and accepted or countered, then I’m willing to give you not seven days to close stuff, but I’ll give you fourteen days to close. I’m going to give you plenty of time to pull your O&E and go from there. I will tell you this, if you make a couple of offers, I’m willing to consider reducing loan levels and give you a bit of a discount if you’re buying multiple assets. There are a couple of stuff in Illinois, a couple of properties that are pretty close to each other in Ohio and other areas there. I’m willing to consider that as well. Joel, do you have anything you wanted to add?

We’re coming in strong. Let’s get something going.

I’ll give you an example. If the value is at $7,500, don’t come to me with a bid at $7,000. It’s not worth your time. You’re going to need to be at least $0.50 when there’s a ton of equity on the back end, if not greater. The fact is you’re going to foreclose, you’ve got a ton of equity. Provide the value. If the value is at $7,500, do us a favor. Share what your value is. If you’ve got a CMA pulled, feel free to send it over. If you’ve got a BPO pulled, feel free to share it over to help you justify a lower bid than expected. Just don’t pull an estimate value and go off of that. We’re not going to accept that. You literally have a realtor, take a look at values. They send a CMA to you. Don’t send the link to the CMA. Print it off in a PDF and say, “Here’s what I’m finding in the CMA, the value to be of that asset in this neck of the woods.” Let me go out and take a look at that. I’m not going to sit here and kill bids if your bids are way off, especially for getting a couple of higher bids. Joel, when do you want them to have their bids in by? When would you like that?

Friday’s fine, the close of business is on Friday.

I’ve got a couple of questions here from people, “What’s the foreclosure time in Wisconsin?” I don’t know. I don’t remember what the foreclosure timeframe is in Wisconsin. Do you know, Joel, off the top of your head?

I don’t but generally Wisconsin’s a little bit longer. I would say cautionary eight to twelve months, but if it’s a contract for deed, the question is what’s the length of it? Does that fall under forfeiture?

 

These are all CFDs. I don’t know if there are tenants in any of the properties. We have a question, “Are you looking for a percentage of the UPB or FMV?” You’re going to have to look at and come up with the strongest offer. Everything’s different because you have UPBs all over the place and you’ve got values all over the place. Take a look at them and it comes with a strong offer, highest and best. Submit the offers to Joel@RTBPartners.net. Send them directly to Joel. Joel will take your offer together. If you see something that pops up and you want to justify a bid with different things, go ahead and put the notes in there. When Joel submits the bids, I can see what the notes say and we’ll go back and forth. I know a lot of these assets, especially all the Ohio and Michigan ones I’ve driven by for the most part myself. I drove by and spent a big chunk of time there. Anyway, that’s where we’re at with that. If you’re looking for performing notes you want to buy, drop me an email or Joel if you’re looking for some stuff. I may consider moving some of my performing notes off my portfolio as well. We have a question here, “Are there any fees on closing? If so, what?” Joel, do you want to answer that?

It’s 3%.

It’s 3% of the funded amount. That sounds good. That will work. Joel, do you have any other questions, comments, concerns?

No, I think you’ve covered it well. I appreciate the opportunity and hopefully we can get something done. If you have any questions with regard to due diligence and things of that nature with the collateral, feel free to pop me an email.

We’ll deliver collateral bond approved offers. I’m not going to have my staff ran back and forth and sending out files beforehand, but we’ve got all the collateral files in house here. A lot is already scanned en masse at management’s portal or is already scanned, waiting for it to be sent out. Joel, thank you so much.

That was great. Thank you.

Once again, if you are looking for collateral files reviewed to help with that stuff, reach out to Joel. It’s $150 a file. It’s a pretty good price for somebody to spend the time in a good way of looking through everything and finding stuff.

All we do is find the anomalies and answer the questions that are correlated to it.

We have a question “Are there any files with checks in them?” If there were files with checks in them, they would have been pulled already. Thanks. We’ll see you all at the top.

Important Links:

• Joel Markovitz
• Baldwin Advisory Group
• ProTitle
• Joel@RTBPartners.net
• Madison Management
• Franco Barile
• Damien Waldman

About Joel Markovitz

Joel Markovitz is the Client Relations Manager for the Singer Law Group. He has an extensive background in loan servicing and special servicing.

 

 

 

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