Purchasing a note to do a Deed in Lieu

[DJ Waddell]

Has anyone had any experience purchasing a note from Loandepot.com? I noticed that they have filed Lis Pendnes on a home that is in my area. The house seems to be in good condition and I think it would be an easy flip. The plan is to purchase the note from Loandepot and do a Deed in Lieu to acquire title. Does anyone have any experience or advice on the topic? Costs involved?

[DJ Waddell]

Originally posted by @Andy Mirza:

Short answer: the outlined strategy is probably a waste of time. I have no experience buying from Loandepot.com but, in general, the idea of buying a single note for a specific property from a large lender is unrealistic. Conceivably, you might be able to buy such a note from a small bank that held the note in its portfolio and you had a good relationship with the asset manager/trading desk. Generally, banks and hedgefunds offer the loans that they want to sell according to whatever their needs might be.

Deed in Lieu is something that the borrower can voluntarily do if the lender allows it. It's a two way street, you can't just "acquire title" via DIL if you, as the lender, want to. If the borrower is in default, you go through the process to foreclose, and no one bids on it at sale, then you can acquire the property. 

Hi Andreas, thank you for your reply. I know that I would need to get with the borrow first and have them agree to a deed in lieu, but it did not occur to me that the bigger banks would not be willing to sell a note in default. I contacted Loandepot and was told that they do not actually hold the paper for the loans, they just service them. And they would not give me any information on who does unfortunately. So this deal is off the table unless I can talk to the owner about doing a short sale