Review of the Paperwork or Why Many Trees Give Up Their Lives for

Don't be alarmed at the amount of paper required to close a paper deal. Even though no property changes hands with a note sale, it's important that all of the required documents are complete and accurate to protect all parties to the transaction. Before you make your first offer, you have to be familiar with these documents:

■ The original note. A note is a negotiable asset that can be bought and sold.

■ The mortgage, or deed of trust. This document shows you the amount of the mortgage, position of the mortgage, the interest rate, whether the rate is fixed or adjustable, the term of the mortgage, if the mortgage is assum-able, and if taxes and insurance are included in the monthly payment.

■ The closing statement. This shows you the costs involved in the original purchase and sale of the property.

■ Payment history. This documents how the mortgagor has paid on the note and can be in the form of a certification or copies of canceled checks.

■ Estoppel letter. This is the letter you send to the mortgagor to ensure that the conditions of the original note have been followed and that no payments of which you are unaware have been made.

The funding source will issue the closing instructions, which will thoroughly detail the documents necessary to complete the transaction.

Smart Thinking

Note buyers can be a good source for property to buy. If they have to foreclose on a note but don't want to own real estate, they may be happy to have you take the property off their hands.

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