Note Buying – Not always an Exact Science
May 23, 2008 by notebuyingprofits.com
Filed under Real-Life Case Studies, Research
Note buying isn’t always an exact science – it can also involve a little bit of an ART. Here’s an example:
I bid a pool of non-performing notes held by a trustee for a bankrupt mortgage company. Two loans were missing collateral files. One is a loan on a Florida property. Ouch – Florida judges are increasingly strict on lost note affidavits and missing notes in general. In some cases, they’ll throw out the foreclosure proceeding if you don’t have the original note, or appropriate documentation.
Scurrying as fast as I could, I was able to track down a copy of the note that was in storage at the title company office that insured the note (this was a 2006 loan). (One of the things that you’ll learn more and more about me is that I like to get my hands dirty on as many note buying deals as I can – it allows me to learn more and more about everything that can happen in our world of non-performing notes – I’m not a “hands-off” trainer in any way).
Fingers crossed … we’ll be able to sail through a foreclosure with a lost note affidavit, but without the original note.
How did I price? I took an extra 15% off my bid due to the missing note issue. Why 15% and not more? I needed to play it safe on the bid. But the home’s value supports a higher bid. I feel we have a better than even chance of being able to foreclose, and then use the foreclosure to help us negotiate a refi or a deed-in-lieu with the borrower.
If you want to learn more about the science part of pricing notes, take a look at our ‘Determining Price’ Note Buying Course. 4 hours+ just on this topic alone. And you get to watch the first hour for free…
Comments
We want to hear what you think. Please leave a comment!