More about Discounting Banks - Posted by karp

Posted by Bill K. (AZ) on May 24, 1999 at 18:12:00:


As someone just starting out in this business, I can see that I’ve got LOTS to learn. Thanks for the great advice. It’s information like that which keeps me checking this site several times a day.

I’ll be sure to put it to use at my next opportunity.

Continued success, my friend.

Bill K. (AZ)

More about Discounting Banks - Posted by karp

Posted by karp on May 24, 1999 at 13:14:34:

I had this come up last week and now that this board is cleaned and back on task, I am motivated to share:

When discounting a bank, I found another method that so far seems pretty good. Instead of playing the first off of the second and visa versa or having to be a mortagge broker, try this:

Find out who the DECISION MAKER within the Foreclosure Dept is and simply send them a GOOD FAITH ESTIMATE showing exactly what they will receive and what the people in the 2nd will recieve etc.

Who can do the Good Faith Estimate? Well your friendly local mortgage broker could do one for you. You can be the buyer if you want (your name will appear on the Good Faith Estimate.)

So now the decision maker gets this fax along with your cover letter stating this is the offer we have on the house and if that is acceptable they need to fax you a letter stating they will take ________ (whatever it says on the GFE)…

I tried this appraoch and got a phone call from the decision maker. After I explained he said okay and signed off on the discount.

Good Luck,


It Just Might Work - Posted by Bill K. (AZ)

Posted by Bill K. (AZ) on May 24, 1999 at 13:38:23:


Thanks for sharing. In fact, I made an offer to a seller this weekend that included discounting the loan. The seller accepted. Now, we are waiting to hear from the lender. The seller wants to negotiate with the lender so I provided her with a copy of my take on the lender’s position.

After financing their home at 108% of FMV, the couple split up, the husband took the money, and she got a house she can’t afford. The lender is definitely going to have to take the foreclosure route which would take them another 6-7 months to complete. So, if my offer’s accepted, they get cash out immediately.

I’ll let folks know if my technique succeeds.

Bill K. (AZ)

Don’t forget . . . - Posted by JoeKaiser

Posted by JoeKaiser on May 24, 1999 at 17:53:01:

Bill, don’t ever tell!

The whole point is to end up with the discount in your pocket. If you tell the seller your plans, or if you let the seller talk to the lender, that discount get’s credited elsewhere.

Here’s one we’re working on now. Signed up a deal with a divorced guy where the wife has a $30k judgment against him and the house. Owes another $35 in mortgage and back payments. Problem? $65k is more than I want to pay for this place.

So I didn’t offer him $65k. If I do that then he can go try to get the $30k judgment discounted and any discount ends up in his pocket.

Instead, it’s a “subject to” deal where I’m just taking over payments. Now, I go ask for the discount and if it happens, it’s my profit - not his. If I can get that thing down to around $5k or $10k, then that purchase price comes down into the $40k’s and all of a sudden we’re making money.