Back to School? Already?

Mrs. Trotter was my 4th-grade teacher. She had a penchant for spelling. Every Monday morning we were greeted with a list of 20 new words to study for the week. Friday was test day. If you got in trouble in Mrs. Trotter's class, she made you write a full page out of the dictionary, to include every jot and tittle. This was another of her way's to get you to learn to spell. I credit Mrs. Trotter in helping me be a pretty good speller. I didn't really have a grammar teacher that I can recall.

Her classroom had those old lift-top wooden desks with a connected swivel seat. They had a hole in the upper right corner that once held an inkwell. The desks were old, not me.  It was a guy thing, but we would bring a handful of wooden rulers to school, the kind that had the grove down the length of it. We would arrrange the books in our desk, and layout the rulers as ramp system inside. We would drop a marble down the inkwell hole, hopefully hitting the ruler so the marble could roll down the ramp system inside our desks, culminating with a recognizable plink in a tin mayonnaise jar lid.

One Friday during the spelling test, as Mrs. Totter was giving the test, there was a particularly long pause between words. One of my classmates dropped a marble through the inkwell in his desk. For some reason, it was extremely quiet in the room, and you could hear that marble roll down one ruler, onto another ruler, and another, then another. It must have been a steel marble, as it sounded like a cymbal when it crashed into the mayonnaise jar lid. Mrs. Trotter was none too happy. She slammed down her dictionary on top of her desk and shattered the glass top cover. That's what I remember from school. I wonder how many pages of the dictionary my classmate would have had to copy had she found out who it was.
 

As our children head back to school after the summer break, I'm reminded that for note investors, education never stops. In fact, while I took a pause on writing these weekly emails, that doesn't mean my note business stopped. Instead, I took time to study, evaluate and fine tune. I also focused on working files in my pipeline. We've had good success on several assets in executing a forbearance agreement and working with borrowers to get their payments back on track. I've positioned assets that we, unfortunately, had to foreclose upon to find a profitable way to liquidate. Also, I have not been happy with the quality and types of assets that were presented for the past 4 months. They were either REO properties or Contract for Deeds, which are primarily low-value assets that might prove difficult to liquidate should we take them back.

But now, change is in the wind. Not only college football and the smell of pumpkin spice, but the consensus in the industry indicates that many banks and hedge funds will be liquidating assets prior to year-end. In fact, I have 22 bids into some note sellers, waiting for some information on 12 others (after I pared those down from 54), and another tape I hope to look at tomorrow. I hope you are ready to join in.

Thanks for reading. I am humbled by the folks who say they have missed my emails over the summer. I'm back. (Now to look at my spellcheck before sending.)

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