Non-Performing Notes, What are they?
Non-Performing notes (NPNs) are accounts of borrowers which have been classified as distressed assets by banks. A perfect example is an overdue mortgage loan that is not producing income because the borrower no longer makes monthly payments. As a result of this, banks through their asset managers sell these notes in bulk to Note Buyers.
The hard to find Asset Managers
Most banks employ tons of gate-keepers that note buyers have to try really hard to get through to the right asset managers. Also, asset managers are often very busy and at times not available immediately to take calls from note buyers, hence regular follow-up is necessary, which in itself can be a time consuming and painstaking process.
Bad Note Brokers and their daisy chains!
Asset managers sometimes give their NPNs to Note Brokers to market them to note buyers. Well that’s an ideal situation; the reality is that most note brokers claim to have access to NPNs but really don’t and they are usually part of a long line of other note brokers making the same claims. A bad note broker is a real time waster because note buyers will spend time dealing with all parties involved in the transaction only to find out at the last minute that the note broker never really had access to any NPNs or a real asset manager in the first place.
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