Buying Distressed and Discounted Mortgages From Banks

The financial crisis has created some great investmentby either foreclosing on the property or working out a
opportunities buying distressed mortgages off banks.loan modification with the homeowner.
The glut of nonperforming loans and bank failures hasWhere to find distressed/discounted mortgages
caused numerous lenders to sell off mortgage assetsMost of the large banks will sell large portfolios of
at deep discounts. This article will provide an overviewdistressed mortgages to hedge funds and large
of the distressed debt industry and various investmentinstitutional investors. A number of banks will sell
opportunities.smaller packages of loans that individual investors and
With the increase of foreclosures in recent yearssmaller investment funds can purchase portfolios as
banks have an increasing need for liquidity. Most bankslow as a few hundred thousand dollars.
are not equipped to deal with non performing loansThere are a number of intermediaries and hedge
and do not have the staff or flexibility to work out loanfunds that will break up large packages of loans and
modifications. Additionally, many failed banks and andsell individual mortgages. This allows regular investors
mortgage back securities need to be liquidatedto purchase assets for as little as a few thousand
creating more distressed mortgage pools for sale.dollars.
Why buy distressed mortgages?You can find information on available mortgage pools
Banks are selling these assets at deep discounts. Anon various internet websites. Networking on LinkedIn
investor can typically purchase a non performing loanand BiggerPockets internet forums is a great place to
for less than 50 cents on the dollar. This provides astart your search for distressed mortgage
significant opportunity for an investor to make a profitopportunities.