NPL Non-Performing Multifamily Loan in Massachusetts

Non-Performing Loan Types

  • First Mortgage/ Senior Mortgage - the primary lien on the property that secures the mortgage and has priority over all claims on a property in the event of default (with some exceptions).
  • Second Mortgage - a second mortgage is a type of subordinate mortgage to the first position mortgage while an original mortgage (first mortgage) is still in effect. A Home Equity Line of Credit (HELOC) is an example of a second position mortgage.
  • Junior Mortgages - a mortgage that is considered a second, third, for even a fourth mortgage secured by real property, but subordinate to the first mortgage.
  • Reverse Mortgage - a reverse mortgage occurs when a homeowner borrows against the value of his or her home and receives funds as a lump sum, fixed monthly payment, or line of credit.
  • Vacant Property/ Blighted - a blighted property is land that is in a dilapidated or unsafe condition
  • Commercial and Industrial - Occurs when a commercial or industrial loan becomes delinquent by becoming late on mortgage payments to their institution. In some cases, becoming non-performing or sub-performing can vary depending on length of delinquency.
  • Any weighted average note rate or weighted average delinquency rate.

Delinquency Status & Non-Performing Loan Level/Portfolio Pricing

  • Selling non-performing loans, sub-performing loans, or performing loans by the UPB (unpaid principal balance) and loan to value ratio percentage using mark to market pricing or BPO (broker price opinion) are the most common forms of non-performing loan sale acquisitions pricing.
  • Restructuring, forbearance, and modifications are considered with the Loss Mitigation Department.

Non-Performing, Sub-Performing, Performing Loans/Notes

  • Non-performing loans are severely delinquent (meaning six months to several years of non-payment).
  • Sub-performing loans are late on payments anywhere from a few months to several payments a year.
  • Performing loans are generally paid on time and can be sold by the originator for numerous reasons.
  • Fixed rate non-performing loans and ARM (Adjustable Rate Mortgage) non-performing loans
  • Property class types Single Family, Multi-Family, Commercial, Industrial.
    Occupied, Absentee, or Vacant.

Outcomes of Non-Performing Loan Sales

  • Provide possible restructuring opportunity for borrower, neighborhood stabilization, reduction of blight, balance sheet stabilization, principal recovery, and credit-risk transfer.
  • Collaborate with loan servicers and loss mitigation departments for possible loan modification (principal or arrearage forgiveness, short-sale, deed in lieu of foreclosure)
  • What is the difference between a mortgage and a note?
    • A note is a promissory note in which the borrower promises to repay the loan amount under certain terms to a lender. A mortgage is what secures the note to a property that someone is purchasing.

Confidential Loan Sale Contact

*All communication is kept confidential and a non disclosure agreement will be executed.