From below- getting rid of a mortgage - Posted by Investor-Rama
Posted by Investor-Rama on July 14, 2003 at 09:52:14:
I was the person below who asked about issuing a bond to get rid of a mortgage. Someone asked about what the investor is needed for. In this case, the loan isnt current, so that is how I found out about this. I still am very unclear about what this is talking about, and frankly it sounds cooky. But here is a link the seller gave me in an email:
It seems like a dummy put this together, but I told the seller I would at least look at the info, and I also said I would ask some people who might know about this.
So anyone that has heard about this, please comment so I might save these sellers from making a mistake.
The gist of this is that the promissory note is an asset to a bank (us saying we will pay back the mortgage), the liability is created artificially, or that no real funds are created to back a mortgage, rather banking laws of lending that say checking and savings $$$ have to be “X” % of loans…so the bank lends out according to the margin/% rules. So to settle the liability on the books of a bank, an instrument is created that eliminates the mortgage.
Now from what this seller has been told, this company gets a percentage of the home value in return for creating this instrument. I am not fully clueless, but definately want to instruct these people if they are about to be had…
So anyone familiar, share your insight so I might help these people. I have no affiliation with this, nor do I profit from it. The sellers wanted me to help them come current on back ammt owed, so they can do this.