How to Avoid Note Buying Scams

Tara Mastroeni
Published: April 6, 2015 | Updated: December 11, 2021

Avoid Note Buying Scams

For mortgage note holders, selling your note when the market is hot can bring you an ample return on your investment. You can use the cash you receive from your mortgage note for essentially any purpose, including making another investment, paying off debts, purchasing a new car, or renovating your home. While selling your mortgage note can be a positive thing, many note holders are afraid of getting scammed.

If you are selling your mortgage note on the secondary market, consider these tips for avoiding scams.

1. Understand the value of your mortgage note
Before selling your mortgage note, you need to understand what factors influence its value. A buyer will consider the note’s existing balance and interest rates, the payback period, the value of the property, and the borrower’s credit history. Factors such as late payments, insurance liabilities, foreclosure and tax issues, can decrease the value of the note. You should take a look at all of these factors for yourself to make sure you are getting an appropriate amount for your note.

2. The note buying process should be straightforward
A reputable note buyer will be able to explain the note buying process. Do not work with someone who does not provide a clear, straightforward account of the steps involved. Also, avoid any buyer who tries to make you pay extra money out-of-pocket to sell your note. A reliable note buyer will pay for the BPO and/or appraisal, so you should not incur any expenses, as well as the title, closing and transfer costs. Once the deal is closed, you should receive your funds that same day if you show up in person, or the next business day if you close through the mail (USPS, UPS or Fed Ex).

3. Work with a direct note buyer
You should only sell your mortgage notes to direct note buyers. A direct note buyer, such as Amerinote Xchange (as opposed to a note broker or middleman), will give you the highest possible offer for your note. If you don’t work with a direct note buyer and are unaware of the value of your note, you risk accepting an offer that’s too low and getting ripped off on the price you get.

Selling real estate notes to a reputable note buyer and get the most bang for your buck, choose Amerinote Xchange. We are the fastest growing note buying firm and have been buying notes for over a decade. For more information about how to sell your mortgage notes, please contact us at 1-800-698-3650.