All Forum Posts by: Mike Hartzog

I've purchased a number of CFDs, but definitely prefer notes.  I agree generally with the pros/cons list in the OP.  One additional thing I feel is a real pain with these is that the borrower cannot always get the lower homestead property tax rate.  In many cases the difference is substantial, and can impact the borrowers ability to maintain both loan/contract payment and tax payment.

Another angle to consider... I have done some lending in which title to the property in question is held in a special purpose business entity. In addition to the DOT/Mortgage being recorded against the property itself, there was a Pledge of Membership Interest in which it was agreed that 100% of the membership interest in the entity would be transferred to the lender in the event of default. This would have allowed us to avoid a foreclosure process and essentially step in and take over.

You can use hypothication to borrow against the note as collateral.  With this approach you retain ownership and control of servicing.  You can borrow at the same or different rate as the loan itself.  Typically this is done with private investors rather than banks.  

I would get a title search done as the next step so that you can understand exactly what encumbrances you would be taking on.  Then, if you want to move forward, Quit Claim deed would do the job of transferring title, and  you would want to do that before paying taxes.  It would be best to work with a title company to do the search, the doc prep, and recording of the deed.  

Sounds like a HAMP loan.  Sure, you can take a discounted payoff.  The borrower would need to refi and would likely be looking at what effect that would have on their payment.  Would the payment go up with a 30 year fixed refi at today's rates?  They may also not have the credit to get a refi done.  That would leave you as the proud owner of a 4% return investment...

@Gordon F.  if you are the foreclosing lender, your bid sets the opening bid for others.  You do not have to come up with cash here.  If nobody outbids you, the property is simply deeded to you, i.e., you don’t have to pay yourself.  If someone outbids you then the property is deeded to them and you receive the proceeds up to the total debt.  All of the above assumes a 1st position note.  Gets more complicated for junior liens.

My understanding is that with a discharge, the borrower is no longer personally liable for the debt but it still encumbers the property.  That’s how it works with first liens in CH7 anyway. 

I like 99designs for this kind of design task.  The contest format seems to work well. 

It’s New Jersey.  Full address is on the OP

I’m available for the next few hours.  425-260-8948

Mike@ suremarkcapital. com