Posted by Michael Morrongiello on April 11, 2000 at 19:05:36:
You now understand why simply “passing the potato” to a note funder can be RISKY to the note funder as well. This plays into the reasoning for a disount along with the time value of money concepts.
It sounds like you have a disgruntled payor who obviously is experiencing buyers remorse. Many note funders including ourselves typically require a written estoppel be sent out to a payor on a note to ascertain whether there are any disputes, defenses, or offsets to the called for payments on the note obligation. This is done to uncover a payor like you have. I suspect the underlying 1st lien may be in default and would suggest you contact them ASAP.
As for your options:
- Intitate a Foreclosure on your 2nd lien
- Abandon the collateral and sue only on the note
- Work out a solution with the payor so that he is happy.
With the money involved here I am not sure a soluton can be reached. Depending on the size of your 2nd lien you might forgive payments for awhile, reduce the interest rate, re-amortize out the note to lower the payments, etc. all as “olive branch” techniques to get this payor back on track with you.
I wish you well my friend.