2nd Mortgage Lien holders - Posted by Chuck

Posted by Ronald * Starr(in No CA) on August 25, 2003 at 21:10:16:


A well-thought out response, in my opinion. Clear, succinct, tells it like it probably is.

Good Investing****Ron Starr***********

2nd Mortgage Lien holders - Posted by Chuck

Posted by Chuck on August 25, 2003 at 11:03:41:

Does anyone have any advise for working with the 2nd Mortgage Lien Holders (ie: banks, etc). I am purchasing a house which has a 77K 1st and a 18K 2nd. The seller is about 4 months behind in payments on both (approx. $4K). Not yet in foreclosure proceedings. Value of house is about $140K. I want to try to satisfy the 2nd with a discount.

Re: 2nd Mortgage Lien holders - Posted by JT-IN

Posted by JT-IN on August 25, 2003 at 20:32:06:


Just for an exercise in seeing how a lender might look at your proposal, lets say that you are the 2nd mtg holder.

Here you sit Chuck, with your exposure on this deal at 68% of FMV… what is your motivation when someone calls you to say… Chuck, I’ll give you " X "…? If you need the cash, ok that is motivation… but we are talking about a bank or mtg company who is in the business of having cash tied up and taking risks. Do you see what they see…?

You may approach them in this manner, that as a matter of convenience to get this deal over with… what kind of a dicount would you entertain… to cash out in 7 days…? Then listen… for an answer. Now if they say maybe 3K… then you say you were hoping for a discount of 5K… If they say 5K, then you say you were hoping for a disc of 8K… etc. Howver, before your horses get running, it is my guess that they will say that they aren’t offering a discount… This may change if you can add some risk factor to the mix… maybe the debtor is going to file a BK… but again this doesn’t substantially rock their boat, in their position. If their exposure was at 90% of FMV… that may be a different story… Wish you all he best on the call(s)… That is right, calls… just because they don’t roll over on the first call, call back an hour later… Keep bugging them until you hear some of what you want, or until they tell you to stop calling. If you are approaching this thing as if you are attempting to cash them out, they should be at least interested enough to listen, and not run you off…

Just the way that I view things…