Sell Your Non-Performing Mortgage Note for Cash

Why Sell a Non-Performing Mortgage Note?

A non-performing note (NPL) is typically 90+ days delinquent, with the borrower having stopped making payments. Holding a non-performing note means ongoing costs without income:

• Foreclosure costs: Attorney fees, court costs, and timeline uncertainty — especially in judicial foreclosure states where the process can take 6-18 months.
• Property deterioration: Defaulted borrowers often stop maintaining the property, reducing your collateral value over time.
• Lost opportunity cost: Capital tied up in a non-performing asset cannot be deployed elsewhere.
• Ongoing servicing fees: Even without payments coming in, you may be paying a servicer to manage the delinquent loan.
• Emotional stress: Chasing a defaulted borrower is stressful, time-consuming, and often fruitless.

Selling transfers all of these costs and headaches to a professional buyer who specializes in workout strategies, loan modifications, and foreclosure management.

How Non-Performing Notes Are Valued

Unlike performing notes where pricing is based on cash flow yield, non-performing note values are driven by recovery potential:

• Property equity: The most critical factor. Property value minus the note balance (and any senior liens) determines how much the buyer can recover through foreclosure or a negotiated resolution.
• Property condition: A well-maintained property is easier to sell or rent after recovery. Severely damaged properties reduce the offer.
• Foreclosure timeline and cost: Non-judicial foreclosure states (Texas, California, Arizona) allow faster, cheaper recovery. Judicial states (Florida, New York, Illinois) add time and legal costs.
• Borrower situation: Is the borrower in bankruptcy? Has litigation been filed? Are there other liens or judgments? Each adds complexity.
• Lien position: First-lien NPLs have much better recovery prospects than second-lien NPLs.

NPL Pricing Ranges

Non-performing note pricing varies widely based on equity coverage:

• Strong equity (LTV under 60%): 50-70% of unpaid balance. Good recovery prospects.
• Moderate equity (LTV 60-80%): 35-55% of unpaid balance.
• Thin equity (LTV 80-90%): 20-40% of unpaid balance.
• Underwater (LTV over 100%): May be declined or priced at 5-20% based on short sale potential.

How to Sell a Non-Performing Note

1. Submit your note details: Property address, note balance, last payment date, property condition assessment, and any legal actions in progress.
2. Receive your cash offer: We evaluate the equity position and recovery potential and provide a written offer within 24 hours.
3. Close and transfer: We handle all due diligence and closing. The buyer assumes all collection, foreclosure, and property management responsibilities. You walk away clean.