Posted by Robert Upton on April 01, 2003 at 02:17:21:
In Reply to: Buying notes in default / foreclosure? posted by Angela Larson on March 09, 2003 at 12:09:05:
We have had a great deal of success with this strategy. The difficulty is that there is quite a learning curve.
The biggest concern is the homeowner. They can create problems by tying up your capital for some time. Bankruptcy is all too common and even vandalism by a frustrated homeowner. You have to create win-wins for them as well. It is cheaper and more profitable to work it out.
To answer some of your other questions
An assignment does not effect the foreclosure.
Lenders are motivated by many different things. Foreclosure and bankruptcy are both big motivators. But if they have sufficient equity and the FDIC is not breathing down their neck to lower their bank rating because of too much non-performing assets you may have trouble.
One of the things our company finds with the local notes we work with in CA is that the banks are very comfortable with how much equity they may have, but it is can be very different for us accross the country in other markets.
The moral of the story is there is money in the strategy, but make sure you get a good enough discount to weather the storm.
Good Hunting,
Robert