In the United States, the mortgage note (also known as real estate lien note , borrower note ) is a promissory note secured by a specified mortgage loan.
Mortgage notes are a written promise to pay a certain amount of money plus interest at a certain rate and timeframe to fulfill an appointment. While the mortgage deed or the contract itself hypothesizes or imposes a lien on the title for the real property as collateral for the loan, the mortgage note states the amount of debt and the interest rate, and requires the borrower, who signs the letter, personally liable for repayment. In the process of foreclosure in certain jurisdictions, the borrower may ask the seizing party to produce the records as evidence that they are the true owner of the debt.
Video Mortgage note
Determinan jenis hipotek
For the most part, it is the mortgage note that determines the "type" of the mortgage:
- if the note has a fixed interest rate and a payment, then the loan is a fixed-rate mortgage loan (FRM)
- Fixed interest rate with payment adjustment is Payroll Mortgage (GPM)
- floating rates and payment amounts show rate-adjustable mortgages (ARM)
- an amortization schedule longer than the due date indicates a balloon mortgage payment
- when the payment schedule is just calling for interest and no principal, so leaving the full principal is due, loan is interest loan only
- the frequency of payment adjustment is less than the frequency of interest rate adjustments implying a possible mortgage for negative amortization
Maps Mortgage note
Mortgage notes as an investment
Like bonds, mortgage notes offer to investors the flow of payments over a period of time. Mortgage records are traded on the whole secondary market or as part of a mortgage backed security. Unlike bonds, the price of a mortgage note is quoted as a percentage, e.g. 95 for 95%.
Importance
In the UK, debt-related mortgages accounted for more than  £ 1 trillion. In the US bond market, debt-related mortgages totaled $ 6.5 trillion and accounted for 23% of the market as of December 31, 2006. $ 1.23 trillion of mortgage debt was issued in the US bond market in 2006; this is roughly the GDP of Great Britain, and bigger than the other debt categories.
Risk
Risks associated with mortgage notes are very similar to bonds:
- credit risk, ie the risk that the borrower will default
- You will close and get your money back
- the risk of prepayment (the borrower has a call option, ie they can repay the debt early)
For a fee, guarantor like Fannie Mae, Freddie Mac, and Ginnie Mae secured mortgage backed securities against the risk of default homeowners, thereby reducing the credit risk associated with mortgage notes.
Investor
The buyer of mortgage records is a company or investor with capital to buy mortgage notes. If someone holds a personal mortgage, these investors will give cash and take over receiving the monthly payments paid to the previous owner. Mortgage notes for these investors are home or mortgage loans that are secured by real estate. Mortgage records can be anything from $ 10,000 to tens of millions of dollars.
Note buyers can buy records on almost any type of property, even though the owner's family home tends to get the best price. A record buyer will offer a certain price based on the risk factors they perceive, which includes the amount of equity in the property, the paying credits, the type and condition of the property and the surrounding area, note elements, etc. Most US- buyers based on records will only buy in 50 states, although some advertise as being able to buy records in Canada.
Comparison with other investments
The advantage of mortgage records over other investments is that mortgage letters will allow a person to collect interest every month. There are no sales commissions or fees incurred from a mortgage investment.
Generate defense records in the foreclosure process
The title chain of promissory notes is very important for every homeowner in America. Inability to show the complete chain of ownership and ownership of a promissory note from Lender A to Lender B to Lender C, etc. It has become a major obstacle in the ability of mortgage servicers to confiscate property in the state of judicial foreclosures and relief of residence in the Federal Bankruptcy Court. The question of standing (in other words, the question of who has the legal right to sue), is the foundation of the record-production strategy, which compels the lender to prove that he has the legal right to sue.
Lawyers estimate that the documents belonging to as much as 50% of mortgages made between 2001-2008 have been lost or destroyed, which led to demands by the borrower that the party seizing produced a note as evidence of debt.
Consumer advocates claim that virtually any entity that seeks homeowners is not a True Lender, but a Service Provider who collects monthly payments for Mortgage-Based Security Trusts (MBS) Trust. Therefore, the court has ruled that the Servicers are not Real Parties in Interest and have no legal standing to seek assistance from the court.
References
Source of the article : Wikipedia
0 Comments