| Below is a question I got asked recently. I thought | | | | been hindered by bad press in foreclosure action), |
| this was valuable info, so I am sharing it with you | | | | in a certain geography (Detroit/Cleveland, hard hit |
| here: | | | | urban areas seen as minority/poor/fraud-rich) or |
| "I've been reading everything I can about why | | | | in a certain situation (1st time minority home |
| lenders would be willing to sell properties at large | | | | buyers)d) bank may not want to actually take |
| discounts. | | | | borrowers to sale, though having no trouble with |
| Dean, what would be a lender's main concern | | | | foreclosure procedures. (I've often found myself |
| which would get them to sell mortgage notes at | | | | in the position of buying mortgage notes from a |
| deep discounts? I feel that since we're trying to | | | | bank 1 week prior to sale because they didn't |
| get into the minds of the LMREP, it would be | | | | want to be seen carrying out the actual |
| more advantageous to all, if we could sell our | | | | foreclosure)e) loan is upside down and doesn't |
| services to their main concerns." | | | | warrant recovery action/expense (small 1sts sub |
| My reply: Make sure you distinguish (in your | | | | $20k on properties of similar value may never be |
| thinking and in your language) properties from | | | | foreclosed on by certain banks - great |
| mortgage notes. You mentioned both in your | | | | opportunities in buying mortgage notes present |
| question above. | | | | themselves in many cases)f) bank wants to |
| You mention both in a question to a bank rep and | | | | "price" a part or all of its non-performing book, in |
| if I were them, I'd immediately write you off as a | | | | which case it sends out loans to bid to see what |
| knucklehead who doesn't know a deed of trust | | | | the market would pay for them. |
| from a deed and wouldn't respond to any further | | | | Individual Rep Reasons to Sell Mortgage Notes:a) |
| emails or calls from you. | | | | loss mitigation rep is "sick" of dealing with a |
| A Tip For Buying Mortgage Notes | | | | particular borrower. Never follows through on |
| Just a word of caution to bone up on your note | | | | reinstatement promise/swears at loss mitigation |
| lingo before you talk to the banks: | | | | rep/ticks rep offb) borrower is non-responsive, no |
| You get one chance to make a good first | | | | contactc) long foreclosure state/processe) rep or |
| impression, when you're talking to the key person | | | | rep's direct boss has authorization over certain |
| gatekeeper when buying mortgage notes. | | | | level of write-offs and mortgage note sale |
| How is that for wisdom? | | | | (unsolicited or solicited) is within that level (take |
| A few reasons: | | | | note here: e.g. 30% discount on $30k loan is $9k - |
| Institutional-Level Reasons to Sell Mortgage | | | | rep's boss may have authorization to write off up |
| Notes:a) banks in the process of merging, or | | | | to $20k/loan, same 30% discount on $100k loan |
| posting quarter/annual financials and needs to get | | | | is over that limit, would require boss to send "up |
| assets off its balance sheet. Quick way is to sell | | | | the line" and takes too much work for rep and his |
| the notesb) bank may have a "relationship" with | | | | boss, so they'll pass)f) rep needs a few extra |
| the borrower, or there are extenuating | | | | bucks to meet monthly recovery quota - a last |
| circumstances.c) banks may be under pressure | | | | minute mortgage note sale could get them |
| (image/marketing, legal or other) not to take | | | | bonuses (usually banks, not mortgage companies |
| "aggressive" recovery action (foreclosure) against | | | | wall street/hedge or private equity funds) |
| borrowers either across the board (image has | | | | Hope this was useful to you. |