Buying Notes in Bankruptcy

[David Hite]

Good morning everyone!

  I am reviewing a tape, and there are a handful of "performing" notes that are in active BK.  the tape doesn't state if its a chapter 7, 13 or how far into the process they are.  Over the last 6 months there are active payments, one missing here/there, but further beyond that mark there is not much payment history.  So I am assuming that it is BK that has started in the last 6 months or so.

  What considerations do you look at when considering buying a note already in BK?   I know from reading that some investors really like it, because the BK process eliminates a lot of other debt, which frees up capital for the mortgage repayment.  I also know that we cannot work with the borrower themselves during the process, but with their liaison for the bankruptcy process.

How does this state of the note affect the UPB% offer price in your eyes?

Thank you!

Dave