Posted by John Behle on May 13, 1999 at 15:00:05:
Karl already answered that up above.
Banks won’t discount their paper! - Posted by karp
Posted by karp on May 12, 1999 at 16:19:58:
I have heard this said over and over and thought I would just throw out some numbers on real deals I just did.
First: 122K discounted to 112K
2nd: 21K discounted to 6K
My NEW loan to value 71%. I will sell on a 80/20 (No money down for the buyer). I will pick up about 11K after costs and then a nice 33K second.
Next:
Dicounted a 2nd at a local bank down from $8800 to ZERO.
This deal is in the works so I dont know what will happen yet. But it looks like I will sipmply reinstate the first for $3400 , wipe the 2nd off, and have a 73% LTV.
Third:
Chevy Chase Bank in a 2nd Position. 45K 2nd. They gave me a verbal acceptance of 13K. If the first discounts down as they have indicated so far from 233K to 190K it means that I will pick up my dream home for 203K +closing costs.It has an appraised value of 330K…
So, next time you hear what banks won’t do, think twice.
Thanks,
karp
Re: Banks won’t discount their paper! - Posted by ScottE
Posted by ScottE on May 13, 1999 at 24:30:12:
Congratulations, Karl!
I have a few questions about how you go about this side of things. The few times I have tried to get a lender (usually a bigger nat’l lender) to discount they almost always refuse to talk to anyone but the original borrower. What document(s), if any, do you use to have them discuss discounting?
Also, when I have been able to discuss ‘short’ sales with a lender, they tell me that they have to discuss the sale directly with the mortgagee, which goes without saying that the cat will be out of the bag with regard to the seller. How do you handle this?
Thank you
Scott
Not one ever has. They never will. Can’t happen. No way - Posted by John Behle
Posted by John Behle on May 12, 1999 at 17:18:42:
Reminds me of what Jim Dyches said years ago. I was listening to one of his tapes. I don’t recall what his particular angle was.
He said out of the blue “I’ve never done any of this discount mortgage stuff, but I don’t think it’s a good way to go.” I was just glad he qualified himself.
Usually those who say something can’t be done are just warning us of their ignorance.
Banks discount all the time. You just have to find the right time, motivation and people to talk to.
What Was Their Motivation? - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on May 12, 1999 at 16:51:41:
Karp,
Great job! Now, how can I do this?
Why did these lenders accept discounts? Were the borrowers in default? Was the collateral not sufficient to cover their loan? How did you find these lenders who would discount?
As a newbie, I’m interested in knowing how you found these lenders. Please understand, I’m not saying they won’t. I’m want to try this in my community, but don’t know who to approach.
Thanks in advance.
Bill K. (AZ)
Re: Not one ever has. They never will. Can’t happen. No way - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on May 12, 1999 at 22:37:14:
John,
What is the bank’s motivation? What should I be looking for, or asking, in order to find a discount opportunity?
Thanks,
Bill K. (AZ)
You just have to find the right time, motivation and people to talk to. - Posted by Hertz
Posted by Hertz on May 12, 1999 at 21:31:38:
John,
Excellent suggestion. Now who would be the right people at a large bank to talk to.
Thank you for your reply and suggestions.
Hertz.
Potential “Don’t Wanter” - Posted by John Behle
Posted by John Behle on May 13, 1999 at 14:57:59:
Most institutions do not want to own any real estate other than their own buildings. In particular, with banks it can cause them to be unstable and even shut down.
If the note is in foreclosure they will discount if they feel they are going to take a loss. How much just depends on the circumstances and how good of a negotiator you are.