Buying The Note Vs. A Forebearance/modification
I'm in contact with a homeowner who is 4 payments behind.
She wants to stay and has a fair amount of equity. She is approved for a refi to bail her out from a new lender, but they won't do it until her loan is brought current.
I was going to negotiate a forebearance and just charge her $1,000 for the service. But could I just buy the note at a discount and do an internal modification and get paid off by her refi?
Doing this would make me more than the $1,000.
I've negotiated one similiar to this with WaMu and they said they'd be willing to do a Short refi. I could negotiate a deal where I get 50% of the savings she would gain on the short.
Any comments are appreciated.
Wamu said they will do a short sale for purposes of refinancing? that's interesting.
So are you going to help the homeowner do that short and just charge them a fee?
I' not sure I understand what you are suggesting. If you buy the note at a discount, that still does not change the fact that their new loan is likely to be closer to the shorted amount rather than the actual balance. This is because
most lenders who make foreclosure bailout loans will not lend anymore than 60 to 65% of the value of the home.