Loan Officers & Mortgage Brokers: The Perfect Note Investors

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This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host, CEO of We Close Nodes, Scott Carson.

You're a loan officer, a mortgage professional, a realtor, a servicing individual, somebody in the mortgage industry who's just been laid off or scared to death that your company is going to lay off, close doors, merge with somebody else, and you're going to find yourself with a cardboard box and your little aloe vera plant on the sidewalk wondering, what the hell do I do now? Then this might be the most important video that you'll ever watch, might be the most important podcast that you'll want to listen to. So check it out immediately. You'll love it. Feel free to reach out to me at the end there, but take advantage of what I'm going to share. I'm going to give you some counsel and advice how to take this crazy mortgage market and turn it from lemons into lemonade and make more money as a note investor. Morning, good afternoon and good evening, everybody. Welcome to this episode of the no Closure Show. This is a special episode just dedicated to all the loan officers, mortgage professionals servicing underwriters, processors out there who have maybe found themselves on the chopping block. I mean, it's getting kind of scary out there if you're a loan officer in today's crazy world of rising interest rates, prices being dropped, homes being listed in the market trying with investors and homeowners trying to get the most out of the house as the actual market is cooling and turning a different direction. Now, if you're part of one of those 50 plus companies and that number increasing every day of mortgage companies who are laying off, closing their doors or merging to conserve staff and resources with other companies. I feel sorry for you. I've been there and I wanted to share a little bit of advice. Advice is like assholes. Everybody has one. Okay, I want to share some counsel with you. Not advice counsel from somebody who is going through that owned a mortgage company back in the last downturn. Yes, the market's a little bit different. Back in 2008, we had obviously huge reductions in market values as property values was crashing across the country. We have not seen that yet. We will, though. We will see a reduction in a lot of places because it's gotten more expensive. Donut house. And then when you add in all the extra inflation and the kick in the shins with the gas prices going up and all that great stuff, you will have more people struggling, you will have more bankruptcies, more defaults, more short sales and more distressed assets on the market than we see. Now, I want to clarify, when I say distressed assets, I don't necessarily mean REOs or foreclosures. And this is a difference in this market this time around than it was 13, 14, 15 years ago. You're not going to see a lot of foreclosures actually hit the MLS or hit the market. You're going to see investors or institutions or companies like mine buy the distressed debt six to 12 months before it hits the foreclosure market. And that is why I want to talk to the unemployed loan officers out there for the most mortgage brokers, loan officers who have either gotten a pink slip or been that friendly handshake and say goodbye. Hopefully, hopefully you were smart enough while you were making hay to put a little bit aside and save. But if you're like most of the real estate professionals out there, the mortgage brokers, the realtors, you don't really save a lot. You're a lot of hand to mouth, you know, when you're making commissions like you are, hopefully you have put a bit aside because it's going to be really hard for you to find a job in the mortgage industry with so many people flooding the industry right now. Now there are some opportunities where obviously if you want to take a job in servicing or special servicing, we're seeing banks hiring for that. But that obviously is probably a decrease in pay when you're used to making commissions, going to a minimum wage, 15, 17, 20 bucks an hour, depending on where you're located at. That's probably not what you like being on the phone all day processing things or servicing things. Not usually the job skills or the sales skills required for like you have as a mortgage or loan officer. So I want to share with you one thing that I learned in the last downturn. I was doing mortgages with my team in roughly about 30 different states. We're doing a lot of real estate investor loans. But we started seeing the writing on the wall. I started seeing the writing. Luckily I had basically apprenticeship with a couple investors who taught me creative financing. They talked to me about how you can actually make a lot of hay or a lot of lemonade out of the lemons being served these days. As we see default rates increase, you're going to see bankruptcy increases, you're going to See people struggling, that leads to a lot of opportunity for us as mortgage professionals to step in and not being on the originators but more on the de origination side. Now what I mean by de origination. Well, for the last 15 years, since the last downturn, I've been an active note and mortgage investor. What does that mean? Doesn't mean I'm originating loans. It means I am buying debt, non performing debt direct from banks, institutions, even some of the same funds and same companies I originated for previously buying notes at a discount because they were non performing, the borrower stopped paying for some sort of reason and I bought debt at a huge discount below current market value. Now you as a loan officer, hopefully you've been smart enough a banker, a mom pop or part of a big organization like Wells Fargo or Mr. Cooper, hopefully you've been smart before you've been laid off that you've been putting together a list of your clients, list of your database for something for you to build, reach up. Because there's a lot of opportunity out there to take advantage of this mushroom cloud taking place in the mortgage industry right now for us to come out smelling like roses. Yes. I will tell you right now the note business is a little bit different than your is a lot actually a lot different than your fix and flippers, your landlord. It's different because you're buying the paper, you're controlling the asset with a mortgage. Well, you understand as loan officers how to originate a loan and how it needs a house, needs to be affordable and DTI ratio, stuff like that. Well, you will also understand the great returns when you're able to a buy that mortgage that was originated a year, two years, three years ago for 30% discount, 40% discount, 50 cents on the dollar of what is owed as long as that percentage of what's owed that you can buy that note at now is well below 70% of value in the houses. And we are seeing that already. We're seeing an influx. This is why lenders are hiring special servicing companies. There's over 55 bank institutions hiring for special servicing. Why? Because they see it, they have the crystal ball. Annoying all Armageddon is coming again. So my best counsel, not advice and I just want to give this to you all out there because I was lucky to have somebody teach me the ropes. If you're a loan officer struggling, hey, you got to find a job to pay, put some money on the table, you got to pay for some bread, got to put some stuff, hopefully you did put a little bit aside. It didn't, hey, you're going to find a job. But here's the thing. You don't have to stop being in the mortgage industry. Come on over to the sexy side of note investing, or real estate investing I should say, and learn how to become a note investor. We buy and sell non performing debt. We bought from a variety of banks. That's what I did when the mortgage market changed back in 2008. I stopped originating and I started picking up the phone, start calling the banks, the wholesaler, the lenders, the net branches that I was originating for, working with and my rep friends at those institutions and starting getting lists of their distressed debts, their non performing notes sent to me that I could cherry pick. And one of the biggest regrets that I have and one of the biggest learning nuggets I will take with me is I bought a lot over the last 15 years. I bought a lot from 2008 to 2015. I've bought a lot in the last few years, but I plan on buying exponentially the amount that I bought back then because I'm more knowledgeable, I've got better marketing resources and there's a lot more money. Sit on the sidelines wishing to be made. That's why it's important that hopefully you've pulled a list of clients, people you've worked with, anybody done a cash out refi or investors loans you've done with. Those are the people that you want to start reaching out to and see if they're looking for deals. I guarantee they're looking for deals. And if they've got money sitting idle on the sidelines, they want to put it to good use. They might as well put it with you. If you help them put a mortgage together for their family or investment properties, how you've built some trust and rapport with those folks, it's time to go ahead and switch the mind. Instead of being an employee for somebody, take on that entrepreneurship mindset. If you'd like a little book about note investing, I'd be glad to send you a copy of my book. Just email me at scottclosenotes.com, i'll send you an electronic copy if you want, or a physical copy. But as a past mortgage loan originator, a past mortgage banker, one of the most important things, like I said, you can do is a first of all, take a deep breath, look at your situation, your skills, while they may not be applicable in today's market, to be a loan originator, you can use that knowledge, that skill, that expertise to become a debt Investor buying mortgages, first liens on residential commercial properties. Because there's a ton of distressed debt out there. There's somewhere between, I'd say 3 and 4 million that we know of of first liens that are already in default. And by default we mean borrowers who have not paid in at least 90 days. I mean, heck, before COVID there were some states like California, where 10% of everybody in California was already a month behind. And then you look at the wave of layoffs is going to impact a lot more folks than just you guys, just the loan officers, the mortgage professionals out there. You have a lot, as we like to call zombie companies. These are companies that are in business, but they have to constantly borrow money to pay off and stay afloat because they're reporting negative earnings. About 40% of the S&P 500 are zombie companies. They're not making profits. They were reporting lost earnings every year for the last few years. Kind of like how Amazon started. They had to borrow a lot of money, borrow a lot of money to get finally over the hump. But there's a lot of companies, Redfin, Carvana, a bunch of these companies that employ thousands of workers that are either A, going to be laying off a ton of people that enter the workforce or B, reducing salaried staff and bringing on hourly staff that they can employ for 30 to 35 hours a week versus having salaried. So you're seeing a lot of uproar, a lot of changes, a lot of uneasiness. Yes, it does feel like Armageddon is just around the corner. But here's the thing. You can make lemonade out of lemon, so be smart about it. Get on the phone, start contacting the lenders that you've worked with in the past, the underwriters. Start inquiring for a few positions, four specific positions inside these lenders that can help you get a hold of this distressed debt that you can either invest with the money you have or use those lists to help make profit, make commissions off of wholesaling or using other people's money to buy this deals at a discount. Get them reperforming for cash flow or selling the assets for a short sale or foreclosure, whatever there is opportunity for you. Lemons are all on the ground. It's time to make lemonade, ladies and gentlemen. So the four departments you want to ask for is the special servicing department to see if they, especially if it's a large institution or the special assets department in either residential, commercial. If you're a Commercial lender, hey, you probably understand that residential lender, he probably never asked that before. On the origination side. I know, I didn't know that at all. As a mortgage banker, call and ask to speak to somebody in charge of special servicing or special assets. Biggest institutions would be like that. If not, ask for the secondary marketing department. This is a department in the bank that is looking at the bank to the lender's portfolio, seeing what's performing and non performing, working with loss mitigation to get the non performing back on track. But they're not performing. They're looking to sell that debt off to other individuals. And we're starting to see a lot of phone calls, a lot of banks inquiring about us buying their non performing mortgages. So special assets department, secondary marketing department. If you're dealing with a lot of banks, you're a loan officer from a bank and you've got a lot of banking relationships. You may want to check with banks that have at least five branches or more and look for their chief credit risk officer. Their chief credit risk officer is also responsible for looking at the bank's portfolio and determining what they need to really work on and what they need to get off the books. Because I will tell you right now, banks are prepping for this mushroom cloud behind me in the next 612 months as this continues to get worse. Now you can also look, if you're dealing with REITs or real estate investment trusts, large insurance companies, they have people called whole loan traders or whole loan sales departments. Those are the folks to reach out to for the portfolios. And we all know that there's portfolios around for that. You could literally jump on LinkedIn, type in those four job titles. Special asset manager, secondary marketing department, chief credit risk officer and a whole loan trading, whole loan sales departments. And find thousands of thousands of people that work for the bank. Now they're not letting those folks go, okay? They're not letting those folks go. If you're a fan of finance movies, if you think, oh there's, if you watch the movie Margin Call, it is Stanley Tucci's character in Margin Call. He knew everything was going on in the portfolio. He knew what was going on. He knew there was a mushroom cloud happening there. It's a great movie to watch. Big Short, obviously a favorite of mine. We're going to see, maybe it won't be as big as 20 with 15 million homeowners underwater, but we're going to see 4 or 5, maybe 8 million homeowners. @ least half that Maybe the big little short again out there. So like I said, if you're a loan officer struggling who's just gotten the pink slip, been laid off, and it's like, what the heck do I do now? You have to shake the cobwebs out and you need to get started. And I highly encourage you, hey, reach out to me on LinkedIn. Drop me an email@scottclosenotes.com We've got a very intro easy class for you to figure. Most of your loan officers would understand the note business far superior than most analytical engineers out there. No offense to the engineers, but engineers have a hard time with the notebook. We with that mortgage mindset works very, very well. It's a very easy conducive path going from an originator to technically a de originator slash note investor out there. So I encourage you to reach out to me, check out other episodes of the no Close show podcast and check out our YouTube channel at WeCloseNotes TV. We are here to help you and I feel for you. It's not a fun day to be given the pink slip or say, hey, we're closing our doors. You gotta go. You ain't gotta stay here, but you ain't gotta go home. But you ain't got, you can't stay here no more. And that's what's happened with the thousands of thousands of mortgage brokers out there. So once again, ladies and gentlemen, if you're one of those or thinking you're going to be it, it's time to start planning that pivot that what am I going to do now? In today's crazy world, when your job class now becomes flush across the country with people fighting the same jobs, it's time to do something different. And there's more money made right now in a down economy than there will be in an up economy. So you have an opportunity here to do with it what you want to. But I would take my counsel, start reaching out to your investors, start reaching out to your colleagues, start reaching out to the banks that you've originated for the lenders you worked with and start making those connections. You having a foot in the door and a warm contact, you'll find portfolios and what do you do with them? Hopefully you reach out to me@scottclose notes.com I'm glad to work with those portfolios with you and help you make it. Hey, we may even buy them ourselves in turn. Like I said, put some money in your pocket, either wholesale fees or assignment fees or help you take some of these deals down and bulk or in many bulk or one off deals, they'll bring in some cash flow for you on a regular basis. So like I said, if you're a loan officer, mortgage professional, realtor who's facing being laid off or not knowing what's going to happen, hey, reach out to me. Very Easy, Scott@weclose notes.com is my personal email address. Or you can always schedule a call with me@talkwithscott carson.com so talkwithscottcarson.com A bucket of time. Let's talk. I'm, I want to help you. I'm glad to give you some counsel from an old officer. I want to be your angel in the outfield when it comes to helping you overcome this trial and tribulations that many loan officers are facing. I feel for you. I've been there, done that and got the T shirt. And you can take what you've learned as a loan officer, mortgage professional and apply it in a different profession, but still make a whole lot more money. Start making some money for yourself. A lot better than making a half a basis point or a point or two. You can make a whole lot more money as a note investor. So if you're a loan investor, loan officer, give me a phone call. 512-585-3810. This might be the most important video you watch on YouTube here in the next 90 to 120 days. So for those of you guys out there listening to our podcast, thank you so much. Check out all the replays on any of your podcasting platforms and check out our YouTube channel, the number one YouTube channel for note investing out there. Check it out. Weclosenotes TV and we'll see you all top everybody. Bye, Sam.