NPL Capital Advisors LLC, was formed with the purpose of investing in promissory notes (Notes) secured by residential mortgages or deed of trusts. The primary investment strategy of NPL is to purchase defaulted Notes secured by first position mortgages. NPL will contact the homeowners and negotiate a “resolution”. There are multiple “resolutions” that will generate cash flow and profits for NPL.
1. Workout Agreement – NPL modifies the terms of the Note and the homeowner begins making monthly payments. Expected yearly cash flow is 25% to 55% of purchase price of Note.
2. Past Due Payments – NPL collects a percentage of the past due balance. After the payment is made, the homeowner pays down the unpaid principal balance on the Note.
3. Discounted Payoff – NPL collects a one-time payment from the homeowner to payoff the Note and to satisfy the lien
4. Foreclosure – NPL forecloses on the property and keeps the property as a rental or sells the property wholesale or retail.
5. Sale of Re-Performing Notes – After NPL negotiates a Workout Agreement with the home owner, the Note is now classified as a re-performing Note, and can be sold on the secondary market. Expected sale price is 70% to 80% of the face value of the Note.
6. Cash-Outs – After a Workout Agreement is in place and the homeowner has been making monthly payments, NPL can receive a cash-out when the homeowner decides to refinance or sell the property. NPL is paid the balance on the Note. NPL can discount the balance due and still realize above average returns.