No Hiding with Homeowner Financials

Verifying Homeowner Financials and other Essential Information

Being a note buyer means more than notes and cash flow; it also means knowing your homeowner. At any point a homeowner can deny having the money to meet pending payments. Don’t be too quick to take their word or the payment amount they offer. Preparation is everything and checking resources is essential. Request financial information and supporting documentation from every homeowner; this information serves as a reminder of the problem at hand, what needs to be discussed, and what needs to be accomplished. It lets the note holder know where the homeowner stands with their income and expenses and what they are truly capable of paying toward their loans.

However, although homeowner financials disclose a wealth of information, a phone call to the homeowner is still necessary. When calling the homeowner you want to make sure to ask them for their name and other identifying information such as the last four digits of their social security number – you want to be in compliance with regulations by maintaining confidentiality and avoid disclosing personal information to the wrong person. You can also give them some of their social numbers and ask them to fill in the rest. By doing this you’re are providing reassurance and establishing in them the confidence that you’re not a fraud.

Once the pertinent information has been verified, you can proceed by asking, “What happened that got you in this situation?,” “Where are you now?,” and “What would you like to do (keep or leave the home)?” By asking questions centered on their goals and wants or on the issue at hand you will get a better understanding for an appropriate action. Do you want to stay? Do you want to go? What actions have you taken so far? Are you currently living in the house? Are you paying your second mortgage? Are you current on your first? Usually if they want to stay they will find a way to make the payment especially if they are current on their first mortgage. Go through their financials with them and help them create THEIR plan and talk about a possible payment. Remember, payments should be reasonable and affordable! It is better to have a homeowner make a payment of 300 dollars than to default on a 400 dollar payment. After deciding upon a number that works for them, have them send you the necessary supporting documents you will need to present to management.

Communication with the homeowner will be necessary throughout the whole process. The more you are genuinely concerned and show you care, the more the homeowner will feel comfortable and confide in you. Remember to always keep their best interests at heart.