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How to sell a mortgage or promissory note
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Short answer: You can sell a promissory note, or the mortgage note behind a loan, by endorsing the note to the buyer and recording an assignment of the mortgage or deed of trust. The buyer pays a discount to the unpaid balance based on yield, payment history and collateral. Federal rules require borrower notices when ownership or servicing changes.
What is your note worth?
Free, confidential valuation. Summary data only, mutual NDA before any documents, and no obligation to sell.
How is a note legally transferred?
A negotiable note is transferred by delivering it, and for a note payable to a named person, by endorsement. A transfer gives the buyer the seller's right to enforce it (UCC § 3-203; UCC § 3-201). For a mortgage note, the security instrument is usually assigned too, and the assignment is recorded with the county recorder where the property sits.
What notices must be sent to the borrower?
- Ownership transfer: under Regulation Z, a covered person who becomes the owner of a consumer mortgage loan generally must notify the borrower within 30 days (12 CFR 1026.39).
- Servicing transfer: under Regulation X, the old and new servicers must each send a notice of transfer (12 CFR 1024.33).
Business-purpose and some seller-financed notes may be outside these rules. Confirm with counsel.
How much do note buyers pay?
Performing notes are priced on yield: the buyer discounts future payments to its target return, so rate, remaining term, payment history, borrower credit, lien position and equity all matter. We found no public, verified benchmark for note prices. Our Debt Pricing Guide shows a secondary-source range of 15–30 cents for non-performing notes, labeled UNVERIFIED. Expect bids to vary widely.
What documents will a note buyer ask for?
- The original signed note with all endorsements or allonges.
- The recorded mortgage or deed of trust, plus any prior assignments (chain of title).
- Payment history, the closing statement, and title policy or lien search.
- Property value evidence, insurance and tax status.
Can you sell part of a note?
Yes. Many buyers offer a partial purchase: they buy a set number of future payments, and the rest returns to you. It raises cash without selling the whole balance.
What is your note worth?
Free, confidential valuation. Summary data only, mutual NDA before any documents, and no obligation to sell.
What else do sellers ask?
Can I sell a promissory note to a third party?
Generally yes. Negotiable notes are transferred by delivery and endorsement under UCC Article 3, unless the note itself restricts transfer.
Do I need to tell the borrower I sold the note?
For consumer mortgage loans, the new owner generally must notify the borrower within 30 days (12 CFR 1026.39), and servicing transfers need separate notices (12 CFR 1024.33).
Is a non-performing note worth anything?
Often yes, mainly because of the collateral. Price depends on property value, lien position, foreclosure timelines and costs. No verified public benchmark exists.
How long does a note sale take?
It depends on document quality and the buyer's due diligence (title, valuation, payment history). Clean files close faster.
Where should you go next?
General information only, not legal, tax or accounting advice. Price figures are historical public benchmarks, not offers. Verify with counsel.