Investing in funds which are designated to buy mortgage loans are an alternative for people who
don’t want to take high risk. Some of those funds even pay monthly interests to their investors.
Specialized companies with a good sense of local real estate markets buy mortgage loans in
default at highly favorable prices. Banks want to get rid of these loans,
because they do not look good on their balance sheets. Investors
contribute parts of the capital and receive fixed interests around 11%.
The funds are deposited in escrow accounts,
which are regulated by the fed (and thus more than secure). The first
intent is to renegotiate the loans with the debtors, which have high
interest in this, because they don’t want to loose their properties.
Anyway, the company
which negotiates keeps emergency funds to ensure interest payments for
“This is highly secure
investment, especially when compared with the volatility and instability
of the stock market”, affirms attorney Oscar Grisales-Racini, and adds:
“The advantage of having to deal with residential loans is, that if for
any reason the debtor doesn’t not respond and gives up on his property,
after 90 days the property by law belongs to the fund, which means to the
investors and the property will be sold.
However, everything will
be done to offer acceptable conditions for the debtor to repay his debt
and, of course, keep their property."
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"Richest do not consist in the possession of treasures, but in the
use made of them." - napoleon I