Most Delinquent NPN Contest

[Andy Mirza]

We just purchased our most delinquent NPN yet: 15 years, 9 months

Paid to date: 01/01/2005

Reason: Title defects

The borrower sold the property in late 2005 to a 3rd party. That 3rd party was able to get another loan on the property that looked like it was supposed to be a 1st. Our seller completed the title claim a year ago, which cleared title. House has been vacant for sometime so the borrower and 3rd party gave up a while ago. All we have to do now is get a judgment, which should be easy since it's uncontested.

We have several other NPNs in the 10 years or so delinquency category.

Can anyone beat 15 years and 9 months?

[Chad U.]

Originally posted by @Andy Mirza:

@Terrence Evans @Alecia Bolton I've seen mention of SoL issues on some of the notes we look at bidding but it never seems to be an issue. SoL problems seem to be avoided by:

1. Actively pursuing collection.

2. Filing certain paperwork that re-starts the clock.

I'm no expert on the subject and defer to our attorneys for guidance.

I assume that SoL in most states won't apply to most institutional loans in which the lenders are actively pursuing collections. If the loan has slipped through the cracks and is not being serviced properly, I can understand how SoL could be an issue. Are my assumptions correct? Or am I missing something?

SOL varies state by state and unfortunately there is no consistent rule between the states. In some states you have a certain amount of time past the maturity date of the loan. In others the clock starts ticking when last payment was made, While others it's the first date the loan defaulted. To add more complication, some states Sol begins when the loan is accelerated. The latter is the toughest to prove as this is generally in the form of a demand letter which does not get recorded.