How To Get Institution To Sell Their Note To Me?
I have access to a couple of properties where it may be to all parties' advantage for me to purchase the notes from the lender as opposed to doing a short sale. I saw a post on this site that noted it is nearly impossible to do this with institutional lenders.
I would like to know if anyone has had any successful or unsuccessful experience with this. Please comment.
The impression I have is that it is hard to do this on SFR notes where there is FHA insurance. Seems these people have a proceedure and they are ging to stick with the proceedure even when they might be better served on a specific occasion by deviating from the proceedure.
Other than that as a rule I find lenders willing to at least talk about it.
I've tried to buy from a bank or two, pre-foreclosure and have sure had zero luck.
It occurred to me that maybe the reason is, they have an existing deal to sell ALL or large portiolioschunks of their REOs to somebody else, or they're reimbursed by the Fed for loans gone bad. So it's a lot of trouble and maybe in violation of their agreements to sell to you or me.
The quick answer is yes you can do it, or yes I have done it.
None of the three loans are FHA.
Tell me what you think of this scenario. (If it could be accomplished) I just want to make sure there are no obvious holes in my plan.
First I sign purchase agreement with the seller for the amount of proceeds he needs, say 5K. So he is going to sell the property to me for 5K. The agreement would state that I would be paying both buyers & seller closing costs & also be contingent upon my successful purchase of the notes from the financial institution(s).
Once I have the purchase contract in place, I would send a proposal to the bank, advantages to them, etc. (similar to short sale proposal)
Once they agreed to assign the note to me, I would close on the note, close on the purchase contract, the property would be mine at a beautiful discount, the seller would happily walk away with 5K (with no tax liability for any forgiven debt), the bank gets rid of a non-performing asset, and things are hunky-dory.
Am I missing something? This seems too easy. Maybe the complication will come in to play in approaching the lender...[ Edited by nwms on Date 08/09/2004 ]
My understanding is that when you buy the note you need nothing from the owner of the property. I could call the lender today and ask if they want to sell me the note on property xyz. The bank is selling something that the bank owns - the note and mortgage. A P&S or anything from the owner is not required.
In fact, I had a friend who was working a SS. He and the owner got down to the very end only to find out some other investor had bought the note from the lender.
Brenda
My thought behind signing something with the owner is that it should lower my risk.
For example, if I simply purchase the note, that just puts me in the same position as lender - holding a delinquent note.
But if I then actually purchase the property itself for the small amount that the seller needs, then I have everything. I'm just thinking that if I hold a delinquent note, then I will be the one who has to foreclose instead of the bank. So if I actually have a close & possession date signed into contract with the seller then I could avoid that process.
Is this logical reasoning?
Of course there is always the risk that the seller could choose not to move out & then you would have a legal situation on your hands. However, by using this method I hope to eliminate this by providing the monetary incentive the seller wants.
Hi Y'all;
Wooo-eee that's a big question. I am here to tell ya that ALL MORTGAGE COMPANIES have distressed notes for sale. Woooo-eee.
Ya gotta have cash and ya gotta be quick. Most importantly, you have to have a confidentiality agreement B$ they can talk to ya.
I'm plugged into BankOne and GMAC directly and working on Countrywide for my investment group. Wooo-eee!
C- :-o
Hi Cpfier
I am interested in your answers too...