Bank note purchase vs dil vs cash for keys

[Steven Mellul]

Hello all, I am new to the forum and I've been very interested in many of your insightful comments. I would really like some help with my current situation which is both complex and unnerving.

This particular instance we would like to purchase NPA /NPN. We would like to purchase the home ideally but we have run into resistance from both the agent and the owner. Here is the history of this property

1. It was on the market since 2008 and has been abandoned since 2010

2. The original note was held by IndyMac for $575,000 beginning in 2003

3. In 2009 Deutsche Bank became the noteholder

4. I checked with our local tax office and one West Bank which took over for IndyMac has now been paying the taxes since 2010 but not under any tax lien or credit

5. The house is essentially a zombie property whereby the bank has no interest in foreclosing and the owner has not lived there in three years and the property has been toileting

6. The house is been off the market for several months but we reached out to the agent and made an offer and were advised that this is essentially a short sale situation where the owner was just along for the ride and the bank had the final say

7. We keep getting the runaround from the agent he has not even been able to get in touch supposedly with the owner we are unsure if this is because the agent is complicit with the owner is delaying the process for reasons unknown. Or the owner wants nothing to do with the agent or the owner does not want to sell for some reason. This is been going on for 3 months and hasn't even reach the bank yet.

8. Recently my builder advise me of the possibility of purchasing the note directly from the bank. We also did a title search which revealed different information that was given to us from the real estate agent. He never mentioned that Deutsche Bank held the note he just mentioned one West Bank was servicing the property.(how can this happen and why would one West Bank continue to pay the taxes in a non-tax lien or credit fashion for properties that they were not the noteholder for?)

9. We called Deutsche Bank on Thursday and they told us that the buyout would be $634,000

10. The title search revealed secondary mortgage of $77,000 Wells Fargo bank that had been written off since 2009. It also revealed approximately $60,000 of private contract debt to condominium associations, individual lenders private ,that were considered foreign judgments in the state of New Jersey. (what are my responsibilities to these secondary creditors besides Wells Fargo )

I have read some of Bill Gurleys comments and Mr. DIpaoli comments and would like more insight on what the proper thing to do. I have No intention of foreclosure on the individual if I could become the primary note holder , I am just interested in becoming the owner of the property. What are my best options : 1. clearing the confusion on who and what the primary noteholder is at this point either one West Bank or Deutsche Bank (should I get title insurance and a full title search)

2. Should I do with Mr. Gurley suggested which is confront the owner give him cash for keys and then deal with the primary noteholder supposedly Deutsche Bank.? This appears to be somewhat risky.

3. Mr. G urley also mentioned obtaining a waiver for the bank and then going directly to the bank but would this make it more feasible to obtain the deed and the property

4. Is a D IL helpful in accomplishing my goals and is it easy to obtain?

finally, how do I obtain the property if I have the note without foreclosing on the principal borrower? In other words I want no harm to come to the seller I just want the property!

Sorry for the long-winded question but this is of utmost importance to us thank you very much in advance

Steve

[Mark Ferguson]

welcome to the forum! I can shed some light on this.

I list REO for OneWest Bank who basically used to be Indymac. It makes perfect sense that OneWest is the services/owner. It is tricky to know exactly who the bank is, but I would be 99% sure you are going to have to deal with OneWest.

In listing REO for OneWest I talk to a lot of previous owners. They all said it was very difficult completing a short sale with them. OneWest usually wanted more money for the payoff then they could sell it for. Having said that, they are very easy to work with on the reo side.

I would estimate your chances of buying the note from them at about 1%. Most banks will not sell notes to individual investors and they will probably want more than you want to pay. Plus OneWest just sold a bunch of loans to Ocwen. They may not even control the note anymore and talking to Ocwen is going to be fun! They outsource to India and there call service people will have no idea what you are talking about.

Assuming you did buy the note, you can't just take over the property because you have a loan. That is what the foreclosure process is for. The only other option is a deed in lieu where they owner signs over their rights to you. However, that does not remove any liens from what I understand. To remove the liens in my state you have to go through foreclosure and hope none of the liens redeem the property.

My thoughts are you should wait for it to become reo or listed as a short sale.