We are not structured like many other real estate investments. We do not directly buy properties, but instead purchase mortgage notes, generally at a steep discount. We buy distressed or non-performing notes, but not until we investigate why the homeowner isn’t paying and determine if they can get back on track. If the situation passes our rigorous diligence, purchasing at a discount gives us the flexibility to lower payments for borrowers, further increasing the probability of them staying on track. 
 
To learn about what mortgage note investing means, check out our webinar on the topic, plus answers to questions posed by attendees of the webinar. If you are considering an investment in 7e, you may have some of the same questions, so be sure to check it out!
 
CLICK TO REGISTER FOR OUR NEXT WEBINAR
 
Case Study:   
 
In one particular case, we acquired the loan on a three-bedroom, two-bath home in rural Alabama at 40% of the unpaid balance on the loan. The property was valued at approximately $75,000, and the borrower owed approximately $32,000 with monthly payments of $700/mo. 
At the time of our purchase, the borrower was eight months behind on their mortgage and required a $5,000 payment to bring the loan current.  During our due diligence, the servicer comments noted the borrower was out of work on disability insurance while they were being treated for cancer. 
 
Action Taken:
Upon acquiring the loan, we reached out to the borrower to get a better understanding of the hardship. The borrower had six more months of treatment and could not afford the full payment but could afford 50% of their monthly payment. We discussed with the borrower a forbearance plan where we would reduce their payment by 50% for the next six months and then modify the loan to roll the past due payments into the loan amount and re-amortize the loan. This would bring the loan current with us as the lender and on the borrower’s credit report. We also advised the borrower we would work with them to refinance the loan after twelve months of consecutive payments. 

Outcome:
The borrower agreed to the forbearance and loan modification agreement. Since renegotiation, the borrower has made the payments per the terms of the new agreements and paid off the loan within eighteen months of us owning the note. 
By working with the borrower on this payment plan, it avoided costly legal fees, which would have been added to the loan balance, and instead worked a solution that allowed the borrower to stay in their home–when they really needed to be there.
By the borrower paying off the loan, we received 2.5x our investment in just over a 24-month period. 
 
Webinar: 
 
To hear more case studies, join our webinar Wednesday, November 9th, 12:30 PM EST / 9:30 AM PST to hear Chris Seveney (President & Founder) and Lauren Wells (Vice President, Investor Relations) discuss how we decide which mortgage notes to invest in and some of the specific challenges we have faced when getting borrowers back on track.
 
Investments like this are how we have been able to distribute an 8% annualized return to our investors, month after month. 
 
If you are ready to invest or simply want to learn more, please visit our offering page. Here you can also read our SEC-qualified offering circular. For larger investors, please feel free to schedule a call with Lauren, our head of investor relations, by clicking here. 
 
Once again, feel free to check out our video introduction to mortgage note investing on our YouTube Channel–and please subscribe while you are there.