My Borrower Stopped Paying. Can I Still Sell My Note?
Yes. Notes with late, partial, or completely stopped payments still sell. Buyers like Essential Investment Group purchase non-performing notes precisely because they have the tools most individual note holders don't: professional servicing, workout experience, and the legal resources to resolve a default. You get out with cash, and the problem stops being yours.
If your borrower has gone quiet, you already know the hard truth: every month you wait, you collect nothing and the situation rarely fixes itself.
What counts as a non-performing note?
- Semi-performing: the borrower pays, but late, short, or sporadically
- Non-performing: payments have stopped, typically 90 or more days delinquent
Both types sell. Even a note headed toward foreclosure has value, because the property behind it has value.
What is a non-performing note worth?
Less than a performing note, and honesty matters here: the discount is real. Pricing depends on the borrower's equity, the property's value and condition, your state's foreclosure process, and how long payments have been stopped. The property is the floor under the price. A defaulted note on a house with strong equity still commands a serious offer.
The key point: a non-performing note loses value the longer it sits. Legal costs accrue, properties deteriorate, and borrowers dig deeper holes. The best price you'll get is usually the one you get now.
Why sell instead of foreclosing myself?
Foreclosure as an individual note holder means months (in some states, a year or more) of legal process, attorney fees, property risk, and stress, all for a property you probably don't want back. Selling the note means:
- Cash in 3-4 weeks instead of a court timeline
- No legal battle in your name
- No property to take back, repair, and resell
- A clean break from the borrower relationship, which for many sellers is worth as much as the money
What will the buyer do with my borrower?
Reputable buyers start with contact and workout options: modified terms, catch-up plans, or a graceful exit for the borrower. Foreclosure is the last resort, not the first move. Ask any buyer how they handle borrowers before you sign; the answer tells you who you're dealing with.
Frequently asked questions
My borrower has bad credit and missed payments. Is it even worth asking?
Yes. We buy the notes other buyers won't touch. The quote is free, so asking costs you nothing.
Do I need to catch up the legal work before selling?
No. Sell the note as-is. The buyer takes on the resolution.
How fast can this be done?
Quote within 24 hours, closing in about 3-4 weeks.