Leander, TX (PressExposure) April 16, 2009 -- Self-directed IRAs as Stockholders of Private Mortgages
Everyday we hear about the mortgage meltdown and how mortgage companies are feeling the pinch or in some cases going out of business. This problem has broaden another industry altogether, private mortgage firms and they are a growing segment of the lending industry and many of these firms are capitalized by self-directed IRAs. Why is that? Because private mortgage holders are built to hold their own notes rather relying on selling them off to the securities market these are known as non-conforming loans.
Also they are not bound by many of the rules and regulations that traditional lending entities must abide. Private mortgage companies may be willing to provide a loan to an individual or business that might otherwise have been turned down by a traditional lender. Does that mean that they are easier to get loans from? Maybe, the underwriting requirements tend to be more common sense than traditional lenders and they are not bound by regulatory rules that seem to make no sense. A private mortgage is a loan financed by an entity independent of banks or common financial lending institutions and many of these independent banks have their stock owned by self-directed IRAs. These are private loans offered by individuals or businesses with a defined purpose such as real estate. These lenders are often more concerned with the collateral assets and loan to value offered to secure the loan so the current and potential equity of the real estate is generally the important factor. In contrast to banks which would prefer to avoid the unprofitable process of a foreclosure if a default should occur a private mortgage company may be more willing to restructure risk and enter into foreclosure. Part of the reason for this is that a private mortgage company unlike traditional banks might have the needed resources in place to sell of the property or perhaps may even manage the property for equity gain or for rental.
Daniel Cordoba is the principal and founder of Asset Exchange Strategies, LLC a self-directed IRA advisory firm in Austin, TX. For more information please go to http://www.Assetexchangestrategies.com