Complicated complicated short pay off

[Alona Samson]

OK so im gonna lay out the facts:

Found a woman who wants me to take her property in a short pay off. Not short sale. My understanding is that the noteholder agrees to a settlement amount and the deed is hers free and clear.

Back in 2007 an individual transferred a deed on a property with an outstanding mortgage of $535k in Brooklyn NY.

in 2008 The seller passed away. since 2007 not a single payment has been made to the mortgage. The woman who had the deed transferred in her name is only the court appointed administrator of the estate, from my current research she should be able to transfer deed but i will run a title search.

She has been sending her lawyer to the courts avoiding being foreclosed on because the original note was not recorded correctly and they cannot produce it. 

On a separate note since then there have been nearly $300k in Environment Control Board violations. 

I don't know how a loan for 535k was originally pulled because the property is currently worth 380k. tops.

Because the loan has gone unpaid for so long there is a an additional debt collector who we must go through. Company at SLS.net. I have begun negotiations with them.

I want the loan settled at 80k here are my arguments:

1. original note is missing! will be very hard to foreclose.

2. 300k in ECB violations ( i have already negotiated with citya  one time pay of 75k, but that is my specialty they might not know they can do that or willing to)

3. engineer report showing issues with the home and approximately 50k in necessary renovations to meet conditions to reverse violations. Approximately another 10k in Expediting fees to get the job done.

4. Comps showing the value fo the home under 400k.

I have another issue with how she will transfer the property to me. But i will let you all digest what i just wrote first. Please help! this is my first potential deal. 

[Ron S.]

Originally posted by @Wayne Brooks:

Not going to happen. The "lost note", in most places, is no obstacle.  A simple affidavit cures the issue.  SLS is a large, well experienced, distressed loan Servicer.  They'll be looking for an open market short sale, not a short pay.  They also know, like we do, that most huge code violation fines get negotiated out.

Right there with Wayne. As a former SLS associate, I can tell you that they know what you know and then some. A lost note affidavit at the most costs 1% of the UPB. Problem solved, your bargaining chip gone.