What Would You Do On Note Just Purchased
Morning
A member from my REIA group assigned to me a note at a discount. The note was for 90 days and the borrower has not redeemed the note at this time. Also, the note was never recorded.
On Monday, I will have the note recorded and have my title company pull a lien and judgement report.
What would you do next? There is plenty of equity in the property and supposedly this is the only lien against the property.
[addsig]
what you do is predicated on what you find in the title report .
If indeed it is the only lien then I would begin foreclosure soom after your deed is recorded
Is the note secured by a mortgage? Or is it an unsecured promissory note?
Is it possible that the maker has an unrecorded deed out there?
It is possible. The original noteholder is now looking for the supporting documentation that she was shown when she lent the money to the borrower.
Once we can verify that the borrower has rights to the property, we will record that document first, then we will redo the assignment of the loan. Fortunately there is still enough spread between what the property sold at auction, this note, and still leaving 20% of equity in the property.
[addsig]
I sent you a private message briscoe. There is no reason for you to spend all that money on closing costs but yet still get this deal done WITHOUT the banks.
Nate-WI
The net of $73k is within 10% of your asking price and you stated you would have no capital gains tax if you sell before Jan 07. If you decline the offer are you certian you can sell it by Jan 07 for more than $73 net? For example, what if someone offers $75 in th future and you still have $1k in closing costs and the sales fee? You would end up with less than $73.
I would be inclined to take the deal as is since you were able to raise the selling price to offset some of the costs, it seems comparable or better to a standard offer even if the buyer never pays a dime on the second.
You might discuss performance assurances on the second, for example you and he can agree that if he falls three or more payments behind on the second that he will sign a quit-claim deed in your favor. He may choose not to sign later but such terms are enforcable in court and can often avoid some of the problems associated with foreclosure. You can also ask for proof that the payments on his first mortage are being made, etc. Be fair but a discussion of specific performance and your right to monitor the status of the first mortgage is appropriate.