I started out working a short sale but the lender says they will sell the loan to me. Its a 2nd position loan in pre-foreclosure. Any negative ramifications in buying the note? What are the proceedures in buying a note?
Hi,
So, how much do they want for it / how much can you get it for?
At the auction, 2nd position will be wipped out. So your buying a loosing lottery ticket - unless, at the auction the bidding goes up, way up. So bidding starts at 60K, the bank wants 70K to cover their loan, and the bidding continues up to 85K (local buyers want the house). You bought the 2nd of 50K for 3K. You collect everything after 70K or 15K, with a 12K profit. But if the bidding stops at 70K your out 3K. I think that is how it works not sure.
Or you buy the 2nd go to the auction and bid the first too. Now you have the house for 3K + 70K , assuming this is a valuable house. Is it?
Not sure, I think this is how it is done. Don’t do this for a house that is not worth the risk.