A nonperforming note is a promissory note secured by a mortgage loan wherein the mortgagor has failed to meet the payments as specified in the mortgage note for at least thirty days (7). They are available to purchase as an investment everywhere, in the US (1) and in the European Union as well (2) (6). Also, as an investment, the foreclosures (5) are available too (3) (4). Here is where Bankprospector, a SaaS platform (8) addressed to mortgage note investors, appears.
Bankprospector is a software-as-a-service platform available to the general public and addressed specifically to mortgage note investors which arranges a repository of lenders and financial institutions that possess NPNs and Real Estate Owned deals within their portfolio.
Bankprospector reviews currently define them as the best platform that encompasses financial institutions in possession of distressed real estate assets. Reviewers value the freshness of the information available, the ability to disaggregate data, and a monthly fee that they can end easily if they want to.
Bankprospector reviews compare this platform with Laneguide, The Note Advisor, and FCI Exchange, but the latter abandoned business some years ago in 2020, and The Note Advisor disappeared in 2019.
Bankprospector provides potential investors who are interested in investing, with a complete insight into this database along with some analytical reporting and analysis tools for NPNs, Real Estate Owned deals, and foreclosures.
Customers of Bankprospector utilize the information retrieved inside the platform to contact these financial institutions and arrange the purchasing of their distressed and delinquent assets in exchange for a monthly financial fee.
Bankprospector is not a marketplace, so prospective investors have to contact the entities in possession of the assets and the operation cannot be settled within the platform. So the platform offers the information always updated and the investors have to contact the sellers themselves.
This SaaS platform, Bankprospector, is used for finding sellers’ non-performing notes. Without it, the investor has to source contacts by themselves without access to listings, calling people that described their situation and would not sell because, for example, they want to take over the property, did not have an inventory of notes, or could not sell their existing notes because they are keeping them until closing their balance sheet because they have declared these credits therein.
All these cold calls are avoided with bankprospector because you can retrieve a list of banks and financial institutions. that may have assets that they need to liquidate.
Bank data in Bankprospector is updated every night through a batch run. Credit unions are updated whenever the National Credit Union Administration posts new data and that happens several times a year. Leads are continuously updated as they have a full-time in-house research staff that obtains these leads to feed the system afterwards.
The ideal user for this program is a note investor like me, or if you are reading this, just like you. A note investor who buys delinquent notes. You can then work them out, either keep them for cash flow or sell them to another note buyer.
So without bankprospector, I was very frequently not talking to the right people, finding out that they are currently not selling their non-performing notes (NPNs) for the several reasons explained above. And in the note investing business, you are losing time if you are talking to a lead that does not want to sell right now just because he is declaring the property of the asset for tax or accounting reasons.
Does Bankprospector Work?
Bankprospector does not sell mortgage notes and is not a lender. They offer to the customers, usually prospective note investors and brokers, a software service to retrieve mortgage note deals and REO listings from banks, financial institutions, and credit unions.
BankProspector Basic price is currently $83 per month billed annually or a single named user without multiple concurrent logins. Nevertheless, on their website there are sometimes special pricing, discounts and relaunch offers which can make the annual price lower.
Comparison Between Bankprospector And Other Similar SaaS
Bankprospector provides more granular information about banks that possess non-performing notes (NPNs). It is easier to digest and a high quantity of comprehensive tutorials. Laneguide, instead, I have used it less and cannot completely judge it yet. Laneguide is cheaper, but in my opinion, does not give you the reporting depth you find in bankprospector.
They were many years working in the mortgage industry and arranged for their customers very useful information about notes that you could use before buying any note.
It was used to research the market and discover opportunities within a local or regional area that you could easily select and filter.
Ideal Users Of Bankprospector
The ideal user for bankprospector is note investors and brokers, real estate investors, house flippers, REO agents, commercial note brokers, and other investors that want to find lender direct non-performing notes (NPNs) and REO deals direct from banks, financial institutions, and credit unions.
Pros And Cons Of Bankprospector
- Investors can avoid third parties and address directly the source of the NPN deals.
- Databases updated nightly for banks (credit unions update when NCUA updates)
- Create listings, sell, or acquire foreclosures and Real Estate Owned deals from financial institutions, so in the portfolio of credit unions and banking institutions. This is quite simple because BankProspector depicts the Real Estate Owned (REO) portfolio balances in addition to the corresponding pipeline that involves the defaulted loans. Therefore, you have information on both non-performing notes and REOs.
- Lots of contact information for banks and credit unions, like a complete sourcing system
- The free training suffices to start working with the system.
- Easy to use, however learning to buy mortgage notes requires that you follow the webinar and training within the platform.
- A bit more expensive than Laneguide (however, in our last update we found the same prices)
- This is not really one of the “cons” but just consider that it is not a vendor marketplace. You still have to perform your own due diligence and contact yourself these banks and financial institutions’ prospective sellers.
Business Case For Bankprospector
On the site, you can do a search of all institutions that might be carrying distressed assets. Once you’ve picked an institution to contact, Bank Prospector shares contact information for representatives there. Once you connect, it’s time for you to get to work on the deal.
Bankprospector is not a vendor marketplace, you will not complete your acquisition of mortgage notes through their platform. You have to contact them, call asset managers and also generate an email list with your leads and contact persons.
Many note investors just go after the low-hanging fruit from hedge funds and listing websites like FCI Exchange, Watermark, Note Depot, etc. They do not take the time to call and follow up with the prospective sellers.
The majority of the acquisitions are fulfilled after several contacts with the prospective seller, five or six calls at least. Most investors are too lazy to follow up with a simple email or calls several times a week until the operation is agreed upon and completed.
I have used FCI Exchange, Bankprospector, and Laneguide to help build my list of emails and contacts that I email regularly (at least once a month) and follow up with phone calls (once a year).
Bankprospector will also help identify someone on LinkedIn from those banks that you might be able to reach to as your direct contact. So open an account on LinkedIn and follow your contacts there.
From there, however, the prospective investor is the one who has to contact banks and credit unions to perform operations with them and this is all completed without the intervention of the platform.
You still have to develop a relationship with whoever is in charge of the notes whether it is a bank, a financial institution, or a credit union.
You always have to analyze the notes and deals and perform the required due diligence for them, but bankprospector gives you the contacts so you do not lose time calling institutions that maybe do not have any assets to negotiate with you.
Training And Educational Resources In Bankprospector
As soon as you enter the bankprospector environment, they seem to drive you to the webinar and to their educational resources.
Most people who sign up without having attended any course or webinar do not understand fundamental data or what they are buying access to and most have not done any direct deals with banks, never. So the webinar and the educational resources have the goal to inform them.
You can easily subscribe to the BankProspector Mastery Academy, which is an upgrade. On top of Mastering BankProspector, where you learn about the software, you can upgrade to the Bank Direct Mastery Academy, where you learn a complete targeting system and receive scripts and templates. Be aware that these are not covered by a BankProspector membership subscription and are an additional add-on available separately.
For property owners seeking distressed promissory notes they can convert into rentals, to real estate investors looking to acquire a portfolio of Real Estate Owned deals from a financial institution, Bank Prospector provides plenty of essential orientation that can help you to touch the right people in the right financial institution saving the investor a lot of time and effort.
Bank Prospector: What It Offers
Banks report 5 types of REO including residential, commercial, multifamily, construction, and farmland. They offer information about all of them.
In previous articles we have discussed that going for individual notes is not a better strategy than going for packages of notes and position yourself better in the asset.
But if you are asking, you can buy single notes using BankProspector, which is not a marketplace. Therefore, even if you can buy individual notes, each bank or credit union will have its own deals and packages. As Bankprospector is not a marketplace and it does not intend to be that, you have to contact these institutions yourself.
Bankprospector itself will not show you the listing of the banks in regards to single, isolated notes. The reason is that financial institutions do not have any reporting obligation of the default situation of single notes. The software will show general data about the portfolio and contact information.
Therefore, neither bankprospector nor its competitors will show you individual loan information unless you are looking for commercial mortgage-backed securities (CMBS). CMBS is a different type of asset and is a fixed-income investment product that is backed by mortgages on commercial properties rather than residential real estate.
Real Estate Owned Listings In Bankprospector
I have not discussed much about REO listings here in this short review.
Just bear in mind that the service is also right for Real Estate Owned agents. In fact, many of the users of the platform are these aforementioned specialists who utilize bankprospector to find more local lenders to offer them Real Estate Owned properties.
Banks report 5 types of REO including residential, commercial, multifamily, construction, and farmland. All of them are tracked by bankprospector so if you are into REO listings, you would be satisfied with this software.
Particular lenders establish their individual guidelines as to specifically identifying and defining both what to sell as well as not selling. In my opinion, a lender selling just one- REO is not unusual.
Types of loans covered
BankProspector has reports for:
- Residential HELOCs
- Seconds (AKA juniors)
- First position residential
- Multifamily and apartment buildings
- Owner occupied commercial real estate
- Non-owner occupied commercial real estate
- Residential construction loans
- Commercial and land development loans
- Agricultural and farmland
- Business or “C&I” loans
- Auto loans
- Consumer credit cards
Why Use Bank Prospector
BankProspector is an online software, actually, a SaaS platform, that automates the arduous and time-consuming process of researching banks. The Bank Prospector imports all financial health, sales indicators, REO portfolio information, and non-performing loan data for every U.S bank from a variety of different sources in order to make research much easier than ever before.
With a database of over 52000 decision-makers in the contacts section that is constantly updated with new contact information and emails for them.
Their contact list is updated every night. Credit union data updates on the same day it’s published, with a contact manager that has their sole job of supplying this platform with accurate asset information and decision-maker contacts to make sure that the customers have all the information required.
We have many reviews of different brokers. From all of those, we would recommend a few that we find are suitable for beginners and intermediate investors so you do not have to read more than twenty reviews: Robinhood, Tastyworks, Firstrade, Interactive Brokers, and Webull.
We also have studied investments like the purchasing of residential whole loans, where you buy an entire loan and not a securitized financial product.