Starting a non-profit to forgive note debt

[Tim Rothermel]

Hi All!

I'm new to the note industry and looking to try a new angle on it.  (Well maybe not new, but I haven't found it yet).  I'm wondering if it's a viable idea to build a charity around the idea of buying distressed notes with the intent to forgive them outright.  In my initial research it seems like this may be possible if I target 1st lien notes and verify occupancy when doing the due diligence.

Just curious, does anyone have any experience doing or trying this at all?  Any thoughts/advice/warnings would be greatly appreciated.

Thanks!

[Gail Greenberg]

@Tim Rothermel did you hear about John Oliver buying a bunch of medical debt and forgiving it? He did it through a charity so that the people would not have to pay taxes on the "cancellation of debt" income. Read about it here. http://mashable.com/2017/01/04/man-debt-paid-john-...

I buy distressed first mortgage notes and Contracts for Deed. I can tell you that it's difficult pre-purchase to know enough about the borrower to say who has true need and who may be to some degree gaming the system. I'm not saying everyone who isn't paying is scamming but what often happens is that people have a minor setback and they stop paying and then, when nothing bad happens, they just keep not paying even when they're able to pay once again. Also their mortgage may get sold several times once they stop paying so sometimes they just don't know anymore who they're supposed to be paying.  

I think this is a very noble idea and, if you can get ahold of the servicing notes, I believe you will find people who deserve your help. I myself have turned down notes where the borrowers are elderly and infirm and, although I couldn't afford to buy the note and forgive it, it would have been great if someone had.