Posted by Brent_IL on September 08, 2003 at 21:47:44:
Posted by Brent_IL on September 08, 2003 at 21:47:44:
Why does bank want $200K for $131K bad note? - Posted by Chefist
Posted by Chefist on September 08, 2003 at 16:31:28:
I am confused, I made an offer on a bad second of $131,000 at $10K…the bank wants $200K, more than face value?..why?
Re: Why does bank want $200K for $131K bad note? - Posted by JT-IN
Posted by JT-IN on September 08, 2003 at 19:16:25:
I think Ron Starr hit the nail on the head here. They are playing a little “Tit for Tat”.
How did you come up with the idea of offering them 10K for their position of more than 140K…?
The best place to start is to ask a Lender if they will consider selling a Note and Mtg… and if they say Yes… then briefly discuss with them that you are interested in a deep discount; (if that is your intent). Many times this ice-breaking conversation lets them know what you are up to, and also gives them a chance to tell you “not to waste your time”, if that is their thinking on the matter.
It appears that maybe you missed a step or two in lien purchasing etiquete, IMHO. At least that is the formula that I try to follow. \
Why not ask them??? (nt) - Posted by Lyal
Posted by Lyal on September 08, 2003 at 18:45:44:
Maybe there is alot of equity to be had… - Posted by Ben (NJ)
Posted by Ben (NJ) on September 08, 2003 at 18:44:45:
I buy tax liens and they often go for a premium because of the tremendous upside potential should the lienholder acquire the property through foreclosure.
Re: Why does bank want $200K for $131K bad note? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on September 08, 2003 at 17:52:59:
Maybe they thought one ridiculous offer deserves another.
But to really find out, ask them, not us.
Good InvestingRon Starr***
Re: Why does bank want $200K for $131K bad note? - Posted by Rich[FL]
Posted by Rich[FL] on September 08, 2003 at 16:44:12:
You don’t provide us with any details, but I’m assuming here that they’re adding in back interest and attorney’s fees to the face amount. I admit that $69k of fees sounds like a lot (over 50% of the note value), but it depends on how “bad” the note is - i.e., how long it’s been outstanding and how much lawyer time has been involved to date.
That’s my $0.02.
Re: Why does bank want $200K for $131K bad note? - Posted by Chefist
Posted by Chefist on September 09, 2003 at 09:30:39:
I am going to call today…but maybe you are right…perhaps they would have discounted a little, but not the rediculous amount I put…he did state in the fax they would accept any reasonable offer…
Re: Why does bank want $200K for $131K bad note? - Posted by chefist
Posted by chefist on September 08, 2003 at 17:05:18:
The note is 172 days in arrears…the montly is $1245…I don’t why they want soo much…
Let’s define…“reasonable offer” - Posted by JT-IN
Posted by JT-IN on September 09, 2003 at 09:47:42:
So what is a reasonable offer…?
I’ll bet if we were talking about an asset that you owned, and wanted to sell, the answer may be slightly different than what you are asking the Lender to do with your offer here.
Lets look at some numbers (ratios) here:
If we assumet that the property is worth the 550,000 that you indicate then:
The property is currently leveraged at: 85.6% LTV (this assumes 141K for the 2nd mtg).
Your offer of 10K for the 2nd was a LTV of: 61.8%
An offer of 55K for the 2nd would be a LTV of: 70%
An offer of 82,500 for the 2nd would be a LTV of: 75%
An offer of 110K for the 2nd would be a LTV of: 80%
My guess is that you could buy this Note and Mtg at somewhere between the 70 and 80% threashold. You may have served yourself much better to offer at least 50K, as an opening offer. As it is they are not taking you seriously, and feel you are wasting their time here. Whether or not you can get back in the game is in question… or is it even something that you would offer those percentages and values for the 2nd…?
Just the way that I view things…
Re: Why does bank want $200K for $131K bad note? - Posted by Brent_IL
Posted by Brent_IL on September 08, 2003 at 18:58:57:
I don’t know why the bank wants $200K, but I believe that your offer was rejected at a cursory glance. Think about it. Presumably, when they made the loan some kind of collateral was involved. Your $10K is the arrearage plus a couple of thousand toward legal fees. For that, you want the bank to forgo the principal.
Most of the time I view the actions of bankers in the same way I do those of women. Both groups do things for reasons that are indecipherable to any outside of their peer group. However, I wouldn?t count on the banker seeing it your way on the value of the note. I think Ron’s assessment is probably the truth.
Re: Let’s define…“reasonable offer” - Posted by chefist
Posted by chefist on September 09, 2003 at 10:30:30:
Basically I was looking for deeply discounted mortgages…I didn’t really mention that in the beginning, and so started this whole thing…
Basically, the deal is not that great…purchase second at $110,000 + $320,000 on the first is $430,000…you will need to forclose to get the property…you will need to sell at $500K if you want the property to move…only $70K for putting up $110K cash and foreclosing…I’m moving on…learned a lot about paper though…
As far as the bank, the guy is pretty straight up…told me what you said…they will always accept the cash if you offer what they want…so no harm done…just a mis-understanding on the fact I wanted deeply discounted mortgages…
Anyway, I am working on a rehab right now…too busy for this foolishness…
Re: Why does bank want $200K for $131K bad note? - Posted by michaela-ATL
Posted by michaela-ATL on September 08, 2003 at 21:33:09:
Oh, come one. If we were so easily decipherable, then there wouldn’t be any mystery and you men wouldn’t enjoy it.
You can’t have your cake and eat it, too