THE NON-PERFORMING JUNIOR LIEN GORDON MOSS
ability to analyze a borrower’s “emotional equity”, and also the borrower’s ability and willingness to work with
you to keep his home and create a “win/win” solution that benefits all parties.
How might you do that?
Clues can be found in the “pride of
ownership” (or lack of) in the condition of
the house. Is the lawn mown and are the
rose bushes planted? The study of credit
reports is an art that, once mastered, can
greatly
increase
your
chances
of
success. Credit Reports are by far the
most important indicator even on notes
with little or negative equity. Statistics
show that the “Emotional Equity” and
credit history, and potential of the
borrower are what really tell you the
story.
The Borrower Wakeup and Workout
Once you have purchased your non-performing junior lien you need to show your borrower that there “is a new
sheriff in town” and that you are very serious, professional, and determined to “wake them up” and provide a
workout solution through win/win options that benefit both parties. I often tell them that “today is a good day for
you – a human now owns your loan and we can accomplish positive outcomes that a bank cannot – if we can
work together to solve your problem”.
It is a relationship you must develop with these borrowers to prove to them that you are not the faceless,
soulless bank that treated them like a number. Do this, and your chances of getting paid over the long term will
increase dramatically.
A long time expert (lender) shares this story that he tells to his borrowers: “My attorney collects these
payments directly and if they are late he will immediately file a foreclosure proceeding, which will ultimately end
up costing you, the borrower, thousands of dollars. ALWAYs call me directly if there is a problem. I am your
advocate and we will work something out”.