Buying The Mortgage Note
I went to an investor's meeting this evening and the speaker said if the lender does not agree to a short sale ask if you can purchase the mortgage note.
I really don't have a clear understanding of how to purchase a mortgage note can someone help me?
Yaisa
In other words he is suggsting that you buy the existing mortgage that is outstanding on that home.... you are buying the paper...
You go to the holder of the note and ask if he wants to sell the note. If he does, whoever now pays him will start to pay you. It does not necessatrily sell for the amount owed depending on the interest rate of the note and the current interest rate of similar notes, and also depending on factors such as the quality of the person paying on the note. You might buy it at 60 cents on the dollar, or perhaps 1.10 on the dollar - depending on factors like this.
If you have the cash... it's a good technique. On one hand you don't have to worry about junior lienholders... on the other hand there may be property taxes due, or IRS liens. You would purchase the mortgage via an assignment, and step into the lender's shoes. You can complete the foreclosure, or modify and reinstate the loan.
The Homeowner may be able to seek bankruptcy protection, sell conventionally, or enter into a creative deal to prevent/prolong foreclosure.