First Lien Capital is an active, well-capitalized mortgage note buyer. Banks, credit unions, servicers, and institutional lenders trust FLC to provide fair pricing, thorough diligence, and efficient closings on NPL, sub-performing, re-performing, and HECM portfolios.
A mortgage note buyer is an investor or institution that purchases mortgage loans from lenders — acquiring the contractual right to receive borrower payments and, in cases of default, to enforce the underlying lien against the property. The buyer steps into the shoes of the original lender, assuming all rights and obligations associated with the loan.
For the selling institution — a bank, credit union, servicer, or prior investor — selling mortgage notes provides immediate liquidity, removes non-earning assets from the balance sheet, and transfers the resolution burden to a specialist. For the buyer, the discount on distressed or non-performing notes creates the opportunity to generate returns through active loss mitigation, servicer oversight, and disciplined resolution management.
First Lien Capital has been active in the secondary mortgage market for years, acquiring loan portfolios ranging from small pools to large bulk transactions. Our 2021 acquisition of 763 loans for $36.5 million demonstrates both our capital depth and our operational capacity to absorb and manage large, complex portfolios efficiently.
Unlike some mortgage note buyers who acquire loans speculatively or flip them quickly, FLC is a long-term holder and active manager. We buy notes because we believe in the value of the underlying collateral and the viability of resolution pathways — and we manage through to resolution with the same intensity we brought to the diligence process.
Selling a mortgage note portfolio involves navigating pricing, due diligence, documentation, and regulatory requirements. Here is what sellers should understand before entering the process.
Mortgage notes are priced as a percentage of the outstanding unpaid principal balance (UPB), discounted to reflect recovery risk. The key drivers of note pricing are:
First Lien Capital conducts thorough due diligence on every pool. For a standard pool of 20–100 loans, full due diligence typically takes 10–15 business days. Larger pools may require additional time. We use a combination of automated valuation models (AVMs), broker price opinions (BPOs), and property inspection data to value collateral, and we review title, lien chain, and legal status on each loan.
Before submitting a loan tape to First Lien Capital, sellers should have the following data ready for each loan:
First Lien Capital treats all loan tape submissions as strictly confidential. We do not share seller data with third parties, do not market your portfolio without authorization, and are prepared to execute a mutual non-disclosure agreement prior to loan tape receipt if required.
FLC's acquisition program spans the full spectrum of residential mortgage note types. Our underwriting capabilities and servicer relationships allow us to price and manage a broad range of loan characteristics.
The core of FLC's acquisition strategy. NPLs — loans 90+ days delinquent — trade at the deepest discounts and require the most active management. FLC's loss mitigation expertise and servicer surveillance program are specifically designed to maximize recovery on NPL portfolios. We acquire NPLs as individual loans, small pools, and large bulk portfolios. Learn more about our NPL investment approach →
Sub-performing loans are 30–89 days delinquent — borrowers are making some payments, but not consistently. These loans require proactive loss mitigation to prevent transition to full non-performance. FLC acquires sub-performing notes when pricing reflects the elevated risk, particularly when our proprietary resolution capabilities can stabilize borrower performance.
Re-performing loans were previously delinquent but are now current under a modification or reinstatement agreement. RPLs carry elevated credit risk compared to originated loans but trade at discounts to face value that often make them attractive on a yield basis. FLC acquires RPLs selectively, with a focus on well-documented modifications and collateral coverage that supports downside scenarios.
Home Equity Conversion Mortgages (HECMs) become due and payable upon death of the last remaining borrower, sale of the property, or failure to maintain occupancy, taxes, and insurance. HECM notes require specialized expertise — FHA guideline navigation, occupancy verification, estate coordination — that FLC has developed through direct experience managing these assets in its portfolio.
First Lien Capital has developed a streamlined acquisition process that minimizes seller burden while maintaining the rigorous due diligence standards that protect both parties.
Send your loan tape in Excel or CSV format via our secure contact form or directly via email. Include standard loan data fields: UPB, property address, lien position, delinquency status, legal status, and current servicer. All submissions are confidential. NDAs available upon request before submission.
FLC reviews your loan tape within 2–3 business days and provides an indicative bid range or indication of interest. This non-binding guidance reflects our preliminary analysis of collateral values, geographic concentration, delinquency profile, and resolution probabilities. If pricing is in an acceptable range, we proceed to full due diligence.
FLC conducts property-level valuation, title and lien chain review, borrower equity analysis, legal status assessment (foreclosure timeline, bankruptcy status, active litigation), and servicer document review. We will request servicer imaging files and loan history data. Due diligence timelines are communicated upfront and adhered to.
Following due diligence, FLC issues a firm Letter of Intent with final pricing and terms. Our legal team prepares a standard Mortgage Loan Purchase Agreement (MLPA) that follows secondary market conventions. We work to minimize negotiation friction and administrative burden on the seller side.
FLC funds the purchase through our LP structure and coordinates the servicing transfer with your current servicer. We manage all transfer logistics, including required borrower notices under RESPA and applicable state law. Our team handles coordination with FCI Lender Services, Planet Home Servicing, Statebridge, or SN Loan Servicing depending on the assignment. Post-transfer, FLC's servicer surveillance program activates immediately.
First Lien Capital is actively seeking mortgage note acquisitions. Submit your loan tape for a confidential, no-obligation review. We respond within 2–3 business days with pricing guidance and next steps.
SUBMIT YOUR LOAN TAPE