Homeowners have equity in their property and if the house is decent will not move, they will file bankruptcy and keep there homes and restructure the debt in ch 13.

About 10-12 years ago, a larger brokerage here was doing the same thing, and the problem kept getting worse, and the brokerage ended up in bankruptcy, and dissolving a few months later.

He recently gave me a heads up on a distressed seller neighboring a property he was working with, and let me know of an uptick in certain bankruptcy proceedings that may help me find new sellers, Networking!!

Either way, the develop takes a massive risk when running these projects (hence, the high returns but also the high rate of bankruptcies).This isn’t a get-rich-quick but a get-rich-slowly-but-stay-rich process.

This frees money to originate and package more loans.Servicers are in financial trouble they had to front the money for forbearances to investors, many are merging to save the ship.When a loan has been serviced for a while it can be sold for many reasons:1. doesn't fit the location of bulk of the loans they service 2. borrower is difficult, borrower changes insurance and doesn't comply, insurance goes unpaid or taxes, borrower slow pay, borrower changes title, borrower complains ...3. borrower files bankruptcy, borrower has insurance claims and doesn't complete the rehab, Servicers are not all the same.

Typically it would go unrecorded and you would not show you have any interest in the property - and if they filed bankruptcy etc it would get very hairy or if you pay them and they don’t pay the bank,

That being said, Keep in mind that high equity doesn’t mean distressed, you better stack them with other distressed filters (bankruptcy, divorced, tax delinquent…).

.- Another good question is "Have you filed bankruptcy?"

I told her that I couldn't due to her not so great credit score because of a recent bankruptcy.

Although they may not use the score in making their decision, I was specifically told by a commercial lender officer that they need to check you're not in bankruptcy or have recent foreclosures or tax liens, or a history of settling debts for less than the amount owed.I do have a few commercial loans and they can have more flexibility on credit issues vs conventional - depending of course on the asset they're loaning on, rental incomes, type of credit issue etc.Hope that helps.