Secondary markets are like stock exchanges places where investors buy assets or securities from other investors or individuals rather than from the companies. This allows them to negotiate and get profitable deals than primary markets. One of the most famous and profitable investments in secondary markets is investment in non-performing mortgage notes; these investments help banks or money lenders get a slump sum amount for their non performing mortgage notes and lets them use money for other investments.
When buyer invests in property with limited funds and some amount of loan from bank or the owner itself he needs to present his current property or any other asset as collateral. It helps the lender be rest assured of any loss in future. Since property purchase and sale involves huge investments and money transactions, this calls for legal documentation and proofs at both the end. A document or the promissory note issued against the borrower [that is a written promise to pay all pending payment in installments] is called a mortgage note which is owned by the lender. When a buyer is unable to pay installments as per the schedule and has exceeded his time limit of 90 days, his mortgage note becomes a non-performing note which allows the lender to seize the property and sell it to recover all money.
On the other hand, investors seek opportunities to buy non-performing mortgage notes from the lenders at a lower price than its current principal value and refinance the property for the buyer at revised terms. Investors can allow buyer to pay pending amount in smaller installments and over a period of 10-30 years [as suitable]. Eventually, an investor earns profits over these long term investments. BGK investments, a leading loan acquisition firm in US can help you invest in non-performing notes and offer free analysis too.