Selling My Note: What Happens To My Payor?
One of the questions that is most often asked by people selling private notes is, "what happens to my payor?"
It stands to reason that people would be concerned with the well-being of their payors when they explore selling their privately held notes. In the best of cases, notes that are held privately are paid on time as due, and the recipient (you) is concerned that no harm or foul come to their responsible note payor. Under the worst of circumstances, the note is not being paid on time, and the note seller wants to ensure that the guilty party will still be held responsible for the money they owe.
The well-being of the note payor is of particular importance to people holding private real estate notes. For payors that make their real estate note payments on time, the note holder does not want to see them risk losing the home they are working hard for. After all, the real estate note payment agreement was entered into freely by both parties, understood to be to the benefit of all involved at the time of its drafting; the note payor should not suffer any mal-effects just because the note owner's personal circumstance or preference has changed.
As note buyers, we understand the many concerns of private note owners who are interested in selling their notes. We are sensitive to the needs of all parties—both note payor and note seller—and can grant assurances that no foul will be done to reliable note payors as the result of the sale of your privately held note.
From the perspective of the note payor, there is very little change, and no additional work for him or her. The terms of the original note agreement are maintained. The payor's payments do not increase, their repayment term (years to repayment) do not increase or decrease, and their interest rate remains the same. The only thing that will change for the borrower is the address the payment is sent to. As long as they make those payments on schedule as required in the original note agreement, nothing negative will happen. (It is worth bearing in mind for you, as current note holder, that a default on a loan by the borrower in the future could severely impact your income; by selling the note to us, you relieve yourself of the potential financial damage and stress of legal action against your note payor.)
In addition to taking on all the responsibility for the note, we will also take on the task of informing your borrower that we are now the current note servicer. You will not have to worry about contacting the borrower—we take care of all the paperwork for you; in the end, the bulk of the workload for selling your note is on our end. You do little, the borrower does nothing (but change a payment address), and we take care of all the red tape.
It is commendable that a note owner such as yourself is concerned with the well-being of your note payor; concern for your neighbors is what makes the world a better place to be in. But as note selling goes, there is really nothing to fear from the standpoint of the borrower. And while you might lose in the future if that borrower should default on payments, you have only to gain from ensuring your financial security through your note sale.
