Frequently Asked Questions About Selling Mortgage Notes
Find clear answers about selling mortgage notes, working with a direct note buyer, valuing your note or portfolio, and understanding what happens during the sale process.
Mortgage Note FAQ
Clear answers for note sellers, portfolio holders, and institutional sellers.
Selling a mortgage note or note pool can raise practical questions about pricing, due diligence, borrower transition, documentation, and timing. This page brings the most common questions together in one place.
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Find the answer that fits your situation.
Use the categories below to jump to questions for individual note holders, small fund managers, institutional sellers, and sellers looking for pricing or process details.
General Questions
General Questions
Start here for questions about fees, timing, and working directly with Colonial Funding Group.Do you charge any fees to evaluate my note or pool?
No. We are a direct principal buyer, not a broker. We do not charge “evaluation fees,” “commitment fees,” or “application fees.” Our goal is to provide a firm buy-out price at no cost to you.
How long does the entire process take?
While every file is unique, most individual note sales close within 15-30 business days. For institutional pools, the timeline depends on the size of the tape and the quality of the data, but we pride ourselves on a due diligence process that is significantly faster than traditional bank-to-bank transfers.
Individual Note Holders
For Individual Note Holders
These questions apply to sellers with a single note, seller-financed note, private mortgage note, or note held by an estate or trust. For more details, visit our page on individual mortgage note sales.Why would I sell my note instead of collecting the monthly payments?
Most sellers choose to liquidate for three reasons: liquidity (needing a lump sum for a major purchase or investment), risk mitigation (avoiding the risk of future borrower default), or estate simplification (distributing cash to heirs rather than a long-term debt instrument). You can also learn more on our Sell My Mortgage Note page.
What happens to my borrower if I sell the note?
The terms of the original mortgage or Deed of Trust remain exactly the same for the borrower. The only difference is where they send their monthly payment. We handle the “Notice of Assignment” and all legal notifications to ensure the transition is seamless and professional for the homeowner.
What if I don't have all the original paperwork?
While a complete file (Note, Mortgage/Deed of Trust, Title Policy, and Payment History) is ideal, we understand that documents are sometimes lost over time. Our team can often assist in reconstructing the file or obtaining “lost note” affidavits to move the sale forward.
Small Fund Manager
For Small Fund Managers
These questions apply to private investors, small fund managers, note flippers, and sellers holding small note pools or mixed portfolios. For more details, visit our page on small note pool sales.I have a pool of 10 notes, but a few are underperforming. Will you buy the whole group?
Absolutely. We specialize in “blended” acquisitions. We can price your performing assets at top-tier yields while applying our distressed-asset expertise to provide a fair value for the non-performing or sub-performing notes in the pool. This allows you to clear your books entirely in a single transaction.
What if my notes originated under various entities or older framework?
Our legal team specializes in cleaning up collateral files and ensuring a compliant transfer of lien.
Institutional Sellers
For Institutional Sellers
These questions apply to banks, credit unions, private equity funds, asset managers, and institutional sellers evaluating residential mortgage note pool divestitures. For more details, visit our page on institutional note pool divestitures.What is your preferred asset profile?
We are opportunistic buyers. We look for everything from seasoned, performing first-lien mortgages to sub-performing and non-performing pools. We are particularly adept at pricing “scratch and dent” files or assets with documentation deficiencies.
How do you handle sensitive borrower data during the bidding phase?
Security is a priority. We utilize encrypted data rooms for all due diligence. During the initial “tape” review, we only require anonymized data to provide a preliminary bid, ensuring PII (Personally Identifiable Information) remains protected until an LOI is executed.
Are you buying the servicing rights as well?
Yes. We typically acquire assets “servicing released.” We have established relationships with licensed national servicers to ensure a compliant and ethical boarding process post-acquisition.
Technical & Pricing
Technical & Pricing
These questions cover pricing variables, valuation, and notes that are behind on payments.How do you determine the purchase price?
Our valuation is based on several variables, including the interest rate of the note, the current remaining balance, the borrower’s payment history (seasoning), the Loan-to-Value (LTV) ratio, and the current market yield requirements.
Do you buy notes that are behind on payments?
Yes. We have a dedicated team specialized in non-performing loans (NPLs). We price these assets based on the underlying real estate value and the potential for a loan workout or deed-in-lieu of foreclosure.
Work With a Direct Buyer
Have a question about your note or portfolio?
Colonial Funding Group works with individual note holders, small fund managers, private investors, and institutional sellers looking for a direct buyer of residential mortgage notes and note pools.