Well over half the notes which I review are poorly structured and
an estimated 95 percent are not adequately maintained. Concern
was thus the stimulus behind writing this handbook. I suspect
that two variables are occurring simultaneously, resulting in such a
high number of notes being poorly structured.
First, there is an overall lack of knowledge on behalf of lienhold-
ers. Second, real estate professionals who help structure owner-
financed transactions also lack information regarding owner financ-
ing. The secondary market is so new that the information in this
book is not common knowledge. The uneducated home seller thus
not only ends up owning a poorly structured mortgage, they are
never informed as to how to properly maintain the lien.
The goal of this handbook is therefore twofold. First, it is to sup-
ply lienholders and home sellers an easy-to-read reference guide
for personal education. Second, it is to educate real estate profes-
sionals so they may better meet the needs of their clients.
As a pleasant surprise, a third came to my attention after it was
written. Prospective home buyers were requesting owner financ-
ing information so they could propose and structure their own fi-
nancing, to be purchased by an independent third party, at the clos-
ing table. This is called a simultaneous closing. It is a method of
providing the home seller all cash at closing, while the home buyer
avoids having to qualify for conventional financing. While this
book is written for lienowners, home buyers can simply take the
information provided here and use it for their own purposes. Pay
special attention to the variables which impact a lien’s market value,
then structure your property purchase agreement likewise. The
chances of having your offer accepted are greatly increased due to
the high market value of the proposed lien. Of course, we invite
you to call our office(s) if you have questions.
