Posted by John Behle on January 25, 1999 at 14:30:26:
There is a time in the process when the lender writes off the loan, or decides it isn’t worth it to bid. Overnight they can change from no discount to very high discount.
My success has always come talking directly with one of the decision makers. You may have to go through several people to get to one. For that reason, the smaller branches of finance companies are the best bet.
In some cases, they only make a decision to not bid the day before. We had one that didn’t decide until the morning of the sale on the senior lien. At that time, they told me they were not going to bid. I quickly negotiated a couple grand to purchase their position ($7600 21% second payable over 5 years).
In general, financial institutions rarely respond to written inquiries. They can be a pain even in person. They routinely tell people they have no bad loans or REO’s even though I may have a list in my hands. They also commonly throw out a bone to someone that inquires to see if they are serious. Understand, they get many calls from people that have no clue what they are doing. They don’t want to waste their time and in person you can convince them that you are a real player.
We had one small bank that was in the process of telling me they had no REO’s when the President overheard the conversation and took us into his office and almost begged us to solve some of his problems. I didn’t want the particular building that he had loaned over a million dollars on.
A short while later the bank was shut down.