How to Purchase Mortgage Pools
Mortgage pools are a groups of mortgages that are sold to investors. The mortgages in a mortgage pool share similar maturity dates and interest rates. Mortgage pools make for an atractive investment vehicle due to their high liquidity. Mortgage pools generate income from the interest earned off the mortgages held.
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Instructions
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Obtain a mortgage pool prospectus and mortgage pool annual report. You can request your mortgage pool prospectus from government lending institutions like Fannie Mae and Freddie Mac. Private mortgage companies, such as The Grace Fund LLC, are another option you can use to obtain a mortgage pool prospectus and mortgage pool annual report.
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Gather 10 mortgage pool prospectuses and annual reports. Analyze the return on investment of each mortgage pool. Notice how many mortgages are held by the different mortgage pools. Determine the number of shareholders in each mortgage pool. Decide which mortgage pools are the best investment. Match the various mortgage pool projections with your investment goals.
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Determine if your mortgage pool is in an exclusive pool or a non-exclusive pool. An exclusive mortgage pool is sold by only one company. This leaves you at the mercy of the company offering your mortgage pool. You don't have a chance to shop for better return on investment percentage, or initial investment amount. A non-exclusive mortgage pool is sold by several different companies. A non-exclusive mortgage pool offers more opportunity to "shop" different companies. One company may offer a 10% ROI whereas another company may offer a 12% ROI for the same mortgage pool.
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Match your investment capital with your mortgage pool initial investment. Different mortgage pools require varying initial investments. Depending on the mortgage pool you choose, your initial investment may range anywhere from $5,000 to $50,000. For larger, more experienced real estate investors, the initial investment into a mortgage pool can easily add up to millions of dollars.
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Go to the mortgage company that is selling the mortgage pool you want to buy. Discuss the attributes of your desired mortgage pool. Remember, you're looking for mortgage pools that provide the greatest ROI. Keep in mind, the mortgage company handles all administrative and investment decisions for your mortgage pool.
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Choose your method of compensation. You may choose to receive a monthly cash payment, or you can reinvest your monthly earnings for greater long-term revenue.
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