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Are headlines about a slowing housing market giving you second thoughts about your investment in 7e? They shouldn’t.

Let’s look at headline news.
In July of this year, the S&P Case-Shiller index, which measures house prices in 20 US cities, recorded its first monthly decline in a decade, dropping by 0.44 per cent. This year, while housing prices declined, mortgage rates have risen quickly as the Federal Reserve halted its pandemic-era practice of purchasing mortgage-backed securities and raised interest rates to fight inflation.

Does this mean that now is a difficult time to be a property owner? The answer is no if you already own a home and have a locked-in mortgage. People who are in distressed financial conditions and need to sell their homes and people who are looking to buy or sell today are facing a more difficult climate. Sellers, who have benefited from the housing boom during the pandemic, are finding fewer properties receiving multiple offers and listing prices being cut. At the same time, rising mortgage rates are making homeownership more expensive from the perspective of the monthly payment.

7e Investments is not solely dependent on the current home price, but the ability of borrowers to make their monthly payment–and that is our focus.

Let’s recap our investment process. How do high monthly distributions work as we help struggling families?

Your investment in 7e is not dependent on home prices going up or down, but on the ability of borrowers to make their mortgage payments. That is the heart of our work which starts before we agree to invest in a mortgage note. It is under the management of our experienced team.

What we purchase are under- or non-performing mortgage notes, mortgage agreements where the borrower was not able to make payments at their currently scheduled rate. We purchase the mortgage notes for a 40-50% discount and renegotiate terms so that borrowers can stay in their homes, while our investors can receive monthly dividends. By purchasing the notes at a discount we are able to accomplish our double bottom linekeeping families in their homes, and distributing high monthly dividends.

The math works
For example, we purchased a note at half of its original price. We were able to lower the monthly payment for the family, increase the interest rate to accommodate our monthly distributions, and keep the same time frame to pay off the mortgage. We were able to lower their monthly payment from $966.00 per month to $629.00 per month. If we increased the duration of the mortgage from 15 to 30 years, we could have lowered the monthly payment to $513.00.


With the new payment plan, the borrower’s chance of success is significantly higher. We then hold the loan for a period of 12-18 months and look to liquidate it on the secondary market for 75% of the loan balance, or work with the borrower to refinance into a lower mortgage rate.

Every family is different, every home, neighborhood, county, and situation. That is why this is a hard enough business to keep the large players out. They can’t, or won’t, invest the time required to individually look at every mortgage note and every situation. The borrower’s ability to make their payments, all of their payments, is our focus. Yes we want to understand the equity built up in a worst case scenario where we are forced to foreclose and sell the home. However, protecting our investors and portfolio is our first obligation.

This is our process, to help where it is a win-win for us and the homeowner.

We welcome all questions you may have, just send us an email at [email protected] or, to schedule a call with Lauren, our head of investor relations, click here.

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.

Feel free to check out our video introduction to mortgage note investing on our YouTube Channel–and please subscribe while you are there. There are lots of great videos there.