Posted by Tom-FL on July 11, 2003 at 23:20:03:
Nonsense? Could be. Although buying property or even mortgages with bonds is not unheard of, I could never figure out why anyone would WANT to do it. One guru suggests that if you find a house worth 100k, and for sale at 100k, that you could buy bonds worth 100k at maturity that you buy now for something less, and use them to buy the house. Why a seller would agree to this is beyond me. If they wanted to have bonds worth 100k in 10 years, they could take the 100k CASH from the sale and buy them for the same price you could, and pocket the difference.
I suppose it’s POSSIBLE that if a mortgage co thinks that a mortgage is about to go south, that an investor “could” buy it with a blue chip (Microsoft?) bond worth the payoff amount in a few months. Even at that, it still sounds kind of screwy.
Anyway, why would this person want to be forced to sell in 3 to 6 months and give away 15% of FMV. If they want to sell in that time frame, then just do it, and pay the mortgage at that time, instead of owing the money to this “bond” company.
Also, your title says “Bond Company saves Foreclosure” but the first line of your post says “a company can pay off a mortgage that is current”. If they are current, I just don’t see why they would want to screw around with this if they want to sell in 6 months.