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Foreclosure sold to Kondaur Capital - lets make a deal questions
The house is in Michigan, Wayne County.
So the company below, Kondaur Capital Corp., bought my mortgage at the foreclosure sale. They called me and wanted to work with me to get the house sooner than waiting for the redemption period to end. They said "In exchange for your cooperation we would not to submit any foreclosure information to the 3 major credit reporting bureaus. We will not pursue you legally concerning any deficiencies that may exist concerning the above mentioned property."
1) Am I mistaken but doesn't the original mortgage holder control if there will be a foreclosure on my credit report?
2) Also doesn't the original mortgage holder decide on the deficiency?
3) Anyone familiar with this company? Do they do what they say they will do?
4) Can I sell them my redemption right and if so how much? If I wait I am getting the rent money right now.
5) What terms should I ask for?
Kondaur Capital Corporation
One City Boulevard West, Suite 1900
Orange, California 92868
Did they buy the loan or the house? There's a difference.
How do I know? The letter says transfer of servicing. So I would say the loan.
Looks like they buy mortgages: http://articles.ocregister.com/2009-03-16/business/24675083_1_roland-arnall-ameriquest-subprime
They buy loans. I have bought from them. That is why this is not making sense to me about the redemtion period. They are probably asking for a quit claim deed. A cash for keys type situation. The waiver of the defieciency could be signifigant. Assuming they bought the loan they can provide all they have promised.
If they own the note, then they can do what they say (keep in mind, I'm not a lawyer). If the seller took a loss on the note, that's probably not reportable as a "deficiency" since people sell loans at losses all the time as a result of interest rate changes. Of course, any late payments could be reported.
Kondaur is a player, no doubt, According to this article, they have bought over $1 billion in loans (not sure if that's face or market value). But, they are certainly going to do whatever they can to maximize their earnings.
Keep in mind that they probably bought your note for 15% or less of what you owed on in. They will be flexible with workouts depending on what your motivation is.
I have dealt with Kondaur, too. From talking to people inside the company, it is my understanding that they buy pools of mortgages at a deep discount. The pool is split up among several in-house account managers. The account manager digs into each loan file and decides how best to turn the paper into cash - either obtaining ownership of the house through foreclosure and then selling the house or by re-selling the note. Kondaur makes money by buying low and selling high. They don't hold paper very long. Account managers are charged with moving the paper quickly. If they had just bought my mortgage, I would first try to buy the note from them. I would start at 40-50% of the face value. (I am guessing they bought at 20-30% of face.) Find a hard money lender to provide you the capital to buy them out if you don't have it. My second approach would be to try and restructure the note to something that would work for your situation. If you are successful in restructuring the note, it will likely be re-sold quickly thereafter and you will be dealing with someone new. Bear in mind that Kondaur's account managers come in all flavors, some more experienced and creative than others.
Kondaur cares primarily about turning profits quickly. The idea is to turn and burn through your note so they can free up capital for their next acquisition. As long as the deal they are getting fits their guidelines, they will perform. There may be some room for negotiation, but probably not much because the "cash for keys" scenario you describe is one of about 7 profitable exit strategies for them. If you want to keep the home, and could qualify for a payment on a lower balance (and also a potentially lower interest rate), they may be able to refi you at that lower balance because they will make their margins and be able to turn you in a reasonable period.
If things get tough, feel free to PM me which AE you are working with and I'll be happy to see if anything can be done.
I'm not interested in keeping the property, however, if they can keep the foreclosure off my credit report and not report a deficiency then I'd be happy. Are you folks telling me that they can actually do these 2 things?
What I don't understand is that how can they promise me those things if the previous lender foreclosed on it and sold the note to them? Am I missing something here? How can I find out if it was in fact foreclosed?
it sounds like the original lender didn't foreclose...instead they sold the nonperforming note to kondaur capital. so now, kondaur is your bank and they can foreclose on you if they decide to. instead, they are trying to work with you it seems, so they can get the property and probably resell it. to do this, they are offering to keep the foreclosure off your credit report. note, i am not an attorney!
JC-
When is/was the scheduled foreclosure date?
Was December 18 as I was told by the previous lender. Anyway I can check to confirm if it had been foreclosed or just sold?
What you're missing is the definition of "foreclosure" and "note". A note, in this case a non-performing note, means a loan, and the non-performing part means that it has delinquent payments. If the lender/servicer forecloses on the note, then there is no more note (because they now have the collateral that was securing the note).
Kondaur specifically buys only notes, not REO (unless they've changed their business model substantially while I was sleeping last night), so it is a safe assumption that they own your NPN, not your property. If they owned your property, you wouldn't be hearing from them, you'd be hearing from the Sherriff or REO listing agent assigned to the property.
Of course, I'd double check all of this with the asset manager you've been talking to, but this seems like the most likely scenario.
Disclaimers: I don't work for Kondaur and am not an attorney.
If its occupied I would be a little surprised if they foreclosed so close to the holiday's. If you have a copy of the notice or trustee sale (or notice of foreclosure), there should be a number on it that you can call to see if it was foreclosed on or if it was postponed. If you do not have a copy, you can most likely look it up on your county recorder website by searching for your name and document type.
If they are the new noteholder, they can certainly do as they promised you, which is not report the foreclosure and not file for a deficiency. They just may send a 1099C as a forgiveness of the debt.
One thing I believe that they cannot undo on your credit report is the fact that you were late in making the loan payments; this will already be on the credit report and will drag your credit score down pretty badly.
This is the last email I got. So it sounds like they want to do a short sale of sorts? So, does this sound legitimate? So how does the possession of the note and foreclosure sale happen so fast? Does that mean they foreclosed or previous lender foreclosed?
Kondaur only hires the most experienced, and customer service oriented employees from the industry to work with their homeowners. I wanted to address the questions you have as a result of the email I sent to you last night. Most major banks and servicers will pursue you with a 1099C for deficiency, and follow through with legal action civilly. We hire staff that are creative and find a win/win situation for both Kondaur and the homeowner. It is how we acquire the asset (your Note) that allows us the latitude to work with you the way we do. In return for your cooperation and your tenant's to vacate the home in good (broom swept) condition and within a reasonable period of time we will do these things:
Not pursue you for any deficiencies (no 1099C or law suit)
Not report any derogatory payment activity, or foreclosure activity
Possible fresh start package for tenant- depending on condition of home and they vacate quickly
We need to send one of approved agents in your area to photograph the interior of the home to verify condition so we can review the possibility of a fresh start package for tenant
We can even arrange for a realtor to help them find a new home to rent to expedite the process
We will not know exactly what the deficiency amount will be until the home is sold. So the sooner we sell it, the sooner we can release you from the lien of record. This is the fastest way to credit repair and improving your credit score. We took possession of the note on 12/6/10, and the foreclosure sale occurred on 12/9/10 so technically on that day we owned the Note. If we were going to report foreclosure activity would come from Kondaur. At this point we are willing to forgo that reporting with your cooperation.
We will not know exactly what the deficiency amount will be until the home is sold. So the sooner we sell it, the sooner we can release you from the lien of record. This is the fastest way to credit repair and improving your credit score. We took possession of the note on 12/6/10, and the foreclosure sale occurred on 12/9/10 so technically on that day we owned the Note.
Am I the only one to whom this makes no sense?
Sounds like they are intending to say that they were the noteholder on the date of foreclosure, so that the promises being made can be upheld by them. The property went from pre-foreclosure, through foreclosure, and is now in REO status.
The part about "the sooner we can release you from the lien of record" is what seems a bit silly to me. Unless that has something to do with deficiency or redemption in the state of MI.
To me it sounds like an REO but does that mean they can promise me that the foreclosure will not be on my credit report?
We have a 6 month redemption period. So they have to wait until then to take the property. So that's why I can still get rent from my tenants but they want the house sooner I'm sure so they can make real money.
Maybe I'm the only one interpreting this way, but it seems like the Kondaur guy is saying that on 12/9, whatever servicer that foreclosed on the property did so improperly, as it was no longer their note to foreclose on.
If that's the case, it's not an REO, it's still Kondaur holding an NPN.
Even if he is saying the FC took place properly and is valid, it looks like he's offering not to report the FC. As Steve pointed out, him offering not to report derogatory payment activity, while technically still a valid offer, is moot because it would have been reported by the previous servicer. Not having to deal with a deficiency judgment or having a FC on your record is a plus, though.
I talked with them yesterday and they said the previous lender started the foreclosure but they finished it. Does that make sense?
Can I have them just buy my redemption right?
Yes and Yes
It sounds like you still don't know exactly what the history is, where you stand, and what all of your rights are. You need to know exactly what is going on to make an informed decision.
I am in Saline, MI. If you want to send me the address, I will do research to see what I can find out. I understand you have to do a "contact request", etc. here to "pm" me? Still new here.
If there was a foreclosure in Michigan, that means there was a trustee sale/sheriffs sale. That is a public, legal proceeding that creates a record.
The person who holds the note commonly bids at the foreclosure sale. Historically the bid has been what they are owed at the time, including late fees, attorney fees, etc.
If there has actually been a foreclosure sale, there are at least 3 (or more) ways that you could "profit" from your current legal position:
1) Take money from then to sign away your redemption rights - 6 months in Michigan - so that they can have a clean sale. Their e-mails are totally meaningless on that point. What you need to see is a written contract with all of the details of what they are offering, and what you need to do in return.
2) Get someone like me or another investor to "redeem" the property, by paying what you owe and then taking ownership of the property. This won't work too well if you are "upside down" - owe more than it is worth.
3) Try to get a "workout" on the note, so that it is "re-performing" if the financials make sense. They may or may not want this course, it takes more time. You would look for them to write down the principal and waive fees so that the property was no longer upside down.
4) You could also challenge the legitimacy of the foreclosure process if there were procedural errors - like robo signers - that raise questions about the legality of the whole process.
Send me the address and details of your financial position, property history, etc. I am usually not interested in properties in Wayne county. But I spend at least 30-40 hours a week researching and analyzing properties in Michigan.
I usually work until the kid gets home at 3:30 EST (now.) Then again until midnight or 2 am. chronic insomnia!
You can check my last post for some personal history.
Cheers - good luck!
Best,
Michael
How do I pm you?
Click the follow button underneath his last post and send him a collegue request, once he accepts you can send him a PM.