how to buy mortage note on preforeclosure

Insead of requesting a short sale from the lender, can you ask to discount the note and purchase the note? Then restructure the note?


Write up your offer and submit it. The bank will accept, reject, or counter offer.

It’s beyond me why you’d want to restructure a note and go to a lot of trouble for an owner who has already shown that he won’t make his mortgage payments. He wouldn’t pay the bank, why do you think he’ll pay you?

I attended a workshop a couple of years ago where a note broker guru (Iforget her name) advised this approach of buying preforeclosure notes and negotiating lower monthly payments in the hope that the homeowner would get back on track. After 12 months of timely payments you could sell the note for a profit. If that did not work you could “persuade” the homeowner to give you a “deed in lieu of foreclosure”. You could then sell the property for a profit. I don’t know how successful people may be with this approach, but the thing you have to ask yourself is: what will I do if the owner files for bankruptcy? BK could take months or years to resolve. If you borrowed money to purchase the note, can you make your monthly loan payments when you have no income from the property?