Posted by Stew(NE) on June 22, 2000 at 13:04:32:
I am doing exactly what you are doing but with smaller numbers. I asked J Piper for some advice and he sent me an e-mail. He wanted me to do it like you are doing(reinstate the first). But in my case I had a bankruptcy and a third to deal with. I need it to go to foreclosure to wipe out the third. I decided to get the second at a discount. I then talked to a Mortgage Broker who will give me the money I need at auction to buy out the first for a fee and then he hopes that I will refinance it through him. The key was the LTV. It look’s like your first and if you can get the second even at max price would be about 81% LTV. (192.5+35)/280 Then you can go to the sale and hope someone outbids you above 227. If they do, you make the difference between the face value of your note and what you paid for it. If you wind the bid below 192+35, all you have to do is get financing for the 192K. Which should be easy at the LTV.
On your offer to the second, How old is the second? If it’s not that old your offer is insulting. With that much equity, they know that they can get a whole lot more than you are offering. If I had sent them an offe, it would have to be in the 20s somewhere. Since you are dealing with a company without a face, you need to get a face, a voice, someone to talk with. Just a thought. Maybe send it to them but leave out your price next time, if the note is pretty new. Also with that much equity in the property the second may be at the auction to do the above (bid it up to their second) to get their money back.
Good luck on your deal. Let me know how it goes.