Commonwealth Equity Management, LLC operates throughout the United States and invests in distressed mortgages backed by real estate. Commonwealth buys and sells discount mortgages. We have relationships with other hedge funds, investment banks, insurance companies, pension funds and loan servicers. We evaluate the note and the real estate collateral.We purchase performing and non-performing residential and commercial mortgage notes and properties for resale nationwide. We convert the purchased notes and properties into performing assets by working with the existing borrower or a new owner.Commonwealth is committed to the success of our joint venture partners and the success of the homeowners we work with. If our partners are not successful we are not successful. We create success by buying discounted mortgages and then work with homeowners to find the best solution and then selling the mortgages or property to private investors or non-governmental agencies.Commonwealth specializes in self- directed tax free IRA’s and 401k’s for investing in discounted mortgages.We can work with larger investment groups in acquisition of larger pools and then find workout solutions for the homeowners. We are able to effectively negotiate with homeowners to arrive at a solution from loan modification to loss mitigation. We believe our efforts will help stabilize the real estate market and give homeowners real solutions to real problems.
We buy discounted mortgages. How much is the discount? For a performing note the discount can be 20% to 50% of the note. Cash now is worth more than cash in the future so there is a discount. For a nonperforming note the discount can be 40% to 70% of the note. We demand a greater discount because we have to find a solution. A solution for the borrower and the investor.We buy notes in bulk and sell individual notes. Often we will joint venture with another company or investor to buy and sell notes. We observe specific criteria for targeted purchases, including geographic areas, type of property, and loan to investment value.
We are able to complete due diligence on the notes at a lower cost yet being very effective. This allows us to structure solutions which benefit the investor and the property owner. Solutions include loan modifications, repayment plans, short sales, note sales, deed in lieu, and foreclosure and REO sales
The credit crisis continues to persist. Lenders did not adequately provide for their losses. Banks loss mitigation departments are larger than their origination departments. There is a large inventory of defaulted loans that the lenders have not faced. The loans are still on their books but regulation will force the lenders to sell the loans or pursue their remedies. It is difficult for homebuyers to get a loan and difficult to get financing for commercial properties. Lenders are selling their nonperforming loans at a discount. Especially on smaller loans. The cost of servicing the loans and foreclosing is so high that it is more cost efficient for the lender to sell their loan at a discount. The Fed’s actions have weakened the dollar and the banks have tightened credit. This creates some unique buying opportunities for high net worth investors and institutions. Buyers can buy severely underprices assets. Buyers are buying discounted notes and foreclosed real estate. Since large hedge funds have been buying REO’s the prices have been highly competitive often forcing the individual investor out of the market. Many of these investors have found superior investments in the discounted note market.