How does the sale of the note happen?
M3 REO Group shops the contract to various note buyers. The length of time we collect monthly payments is considered the “seasoning” period for the Note companies. Some companies require more seasoning, some less. Those that require less seasoning where we can sell our note after 4-6 months may pay only 65% – 70% of our note value. If we wait longer, 9-18 months, we may get 80%-85%. Less seasoning means more risk to them. If tenant/buyer can refinance on their own using the FHA program we actually get 100% of the note. This is what we aim for within 18-24 months.
