For portfolio managers, investors, and homeowners, the impacts are quite different. The lucky borrowers meet firms like 7e.
For Borrowers:
If your payment is over 30 days late, your lender is required to report the missing or late payments to the credit bureaus, and as a result your credit score can be negatively impacted. At 60 days, you’ll be hit with a late fee and your credit score will be impacted again. After 90 days your lender will send you a letter known as a demand letter, marking the beginning of foreclosure proceedings. If you know you cannot make a payment or are behind on your mortgage, the most important factor in working something out with your lender is communicating with them. Make sure you speak to them on the phone, explain your situation, and be honest with them.
For Portfolio Managers:
At 7e Investments, we want to help the borrower before getting to the point of foreclosure. As lenders, we are not interested in acquiring and selling homes, our goal is to get borrowers back on track with their payments, and keep them in their home. Many borrowers who fall behind on their mortgage payments have experienced some kind of set back, and many are solvable. For example, the loss of a job or loved one can turn once manageable payments into a major financial burden.
Since 7e invests in a small number of these loans, we are able to thoroughly investigate the borrower’s context and financial situation, creating what we call a three-dimensional picture of the mortgage note (which is the actual debt instrument). We know a lot about which borrowers are likely to make things right and which borrowers will not. We invest in the first type and avoid the second.
We aim for positive outcomes for both our investors, who provide capital to buy mortgage notes aiming to receive monthly dividends, and for the borrowers, who are given individual attention and put on a new payment schedule.
One of our big advantages is that we purchase the mortgage notes that meet our criteria (after our diligence process) at big discounts, typically at 40-50% of the notes’ original value. This provides us the ability to set new, more affordable payments, aiming to earn higher rates for our investors and keeping families in their homes.
For investors:
We target an 8% preferred annualized return for our investors, beating most other fixed income alternatives, including what we believe to be riskier investments such as high-yield bonds.
Are you interested in an investment that distributes above market monthly income while keeping people in their homes? It may be time to take a look at 7e Investments. Plus, if you invest now, you may be eligible for bonus shares of up to 7% of your original investment, adding to your monthly returns.
To invest, or simply to learn more, please visit our offering page. Here you can read our SEC-qualified offering circular.
Have more questions? Please send us an email at invest@7einvestments.com