All Forum Posts by: Paul B.

I can see both sides, sort of...but I'm still of the mindset that "strategic default" is more wrong than right, because if you have the ability to pay, I think you should. You signed a note saying you'd make the payments; in fact, I think there's the word "promise" in there, hence the term "promissory note."

So, one day you wake up and decide that, even though you can afford the payments, you're not going to make them, even though you can? Sorry, but that's just not right to me. Again, I am talking about people who can pay, but choose not to.

There seem to be some who think that the collateral offsets this possibility of walking away. Why not just run up a bunch of unsecured debt and then just walk away from it? I mean, if making the payments no longer suits you, who cares -- right?

Having been a middle-market commercial lender at what is now Bank of America, I can assure you that talk of wanting a "relationship" only means, "We want as much of your business as we can get, but only to the extent and for the amount of time that it suits us."

I've had to tell 20-year customers with impeccable credit and financials that their $10 million loan relationship had to be moved elsewhere by next year simply because they were in the wrong SIC code (that is, the bank was exiting lending to it, regardless of the numbers). The bank will spend a decade building that "relationship," and then they'll flush it -- instantly.

For the bank, a relationship means that we have it all...deposits, loans, credit cards, merchant services, your personal mortgage, your investment accounts (what we called "share of wallet")...the whole shootin' match, and while increased profitability is one reason, the other is nothing more than that they can mess something up and still be less likely to lose the customer. It's just too complicated to undo everything when they have you all sewn up.

I would never recommend that anyone give all of their business to one bank. You should always have another one in there, competing for business, keeping each other honest.

Also, be careful about where you keep your deposits. Having them at the same place you borrow can lead to surprises (see "offset" for more details).

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?

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.

http://foreclosureblues.wordpress.com/2010/10/15/kondaur-capital-predator-buys-mortgage-notes-for-pennies-from-citi-chase-bac-wf-repost-by-popular-demand/

I am SO stealing this.

You should get plugged into the Washington REIA run by John Peterson. He's a good guy.

Did they buy the loan or the house? There's a difference.

Shameless (yet shameful) pity bump.

Just to clarify, I'm looking at post-foreclosures (REO).

I don't follow 100%. Why the need to bump things up $10K? Either your contract was enough to pay off the old lender or it wasn't. (Or is the difference to cover the legal fees, etc.?)

You can always stop the auction by bringing the loan current. There's some number out there that will stop the auction; this is the borrower's right. You could front the cash to bring the loan current, then have the property deeded to you while leaving the existing loan intact. This is called "subject to" because you're getting the deed "subject to" the existing lien.

You could explore getting the loan caught up, getting the deed "subject to," then refinancing the property to take the old loan out. It's somewhat complicated, and your title company may not know what you're doing, but it can be done.

These deals are not for the faint of heart, though.