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Re: buying bank note....

Posted by chalazion_NY on September 05, 2001 at 7:11 AM

In Reply to: Re: buying bank note.... posted by Ward-CA- on September 04, 2001 at 8:56 AM

: : Re: buying bank note
: : Posted by Ward-CA- on July 01, 2001 at 10:45 AM
: : In Reply to: buying bank note posted by bryan on June 27, 2001 at 10:39 AM

: :
: : Hi Ward-CA:

: : I have quite a similar situation/ question regarding buying a bank note.
: : I have found a pre-foreclosure on a bank website. it is scheduled for auction next friday. I notice in the notes of the banks' website it states :

: : "If you are interested in specific property on the auction calendar, please be aware that the bank cannot convey title prior to auction. If you wish to purchase the note only, please fax your offer (name of bank)."

: : I called them and it is still available!
: : questions:
: : 1) you mention previously about "chill-bidding"? in this case the bank is soliciting offers, can I make an offer, that could be accepted?

: : 2) do banks usually take less than judgement amount in states where deficiency judgements are allowed? what is the formulae for calculating an "offer"?, or an acceptable low-ball percetage obviously it seems as though they will take less for the default amount...

: : 3) If the note is actually conveyed prior to the auction can the court or the homeowner's attorney (if they could afford one) throw out the sale, especially since the court (judicial foreclosure) is conducting the sale.

: : 4) if purchased and title conveyed the only large concerns would be senior liens? What are senior liens that always take precedant? IRS liens? mechanics lien? property tax/water bills?

: :
: : Your response would be greatly appreciated, I've spent my entire labor day reviewing your board and learning a bunch. Thanks and keep up the good work

: : Chalazion - NY

: : P.S. While researching Real Estate Title Abstraction I came across the fact of "grantor and grantee indexes", do all registrar offices have them in some form or another and do these indexes indicate who? how many? and how much the lien amount are for?Thanks a bunch ward-ca

: =•=•=•=•=•=•=•=•=•=•=•=•=

: Chalazion, my remarks about bid chilling were in reference to why banks might be apprehensive selling to a party who contacts them to buy a specific note and trust deed. They’re suspicious that your choice wasn’t random, that you have something devious in mind with the ultimate intent to engage in bid chilling.

: However when the bank initiates the transaction by openly offering readers to buy their note position prior to the sale then they aren’t concerned with you playing any tricks.

: 1). I would make them an offer.

: 2). The banks rarely go after any deficiency, even when entitled to, because of the extra expense involved. Make an offer that would generate a great yield if the foreclosure was cured by the owner before the sale and you were left with accepting monthly payments. That way you have the luxury of selling the performing note at a discount and making a good profit.

: 3). No, such notes are sold regularly so there’s no fear that the switch in ownership will derail the ongoing foreclosure, especially if you got the assent of the entity processing the foreclosure.

: 4). ALL senior liens take precedence over juniors, regardless of their nature.

:
: Our experience here in CA is that the recorder’s Grantor/Grantee index is the most accurate title record available on any particular property in the county. The index will make reference to a specific document. If you go to the pertinent document roll or fiche you will see an actual photographic copy of the document and all it recites concerning who, how many, and how much the lien amount was originally, before payments began.

:
: By the way, I’m glad you used your Labor Day to such good effect.

**********************************

Thanks you for the above.

To follow up further, if the note were to be cured after my purchase, that would that mean the foreclosure proceeding would be cancelled? What about the Title? Who holds the Title if I'm the holder of the note?Also since the note would have been reinstated would I as the note holder have to go through the entire foreclosure process again (almost a year or so) to get this property? or is there a quick quit action?I remeber a situation with a friend who had a tenant who kept paying a little each time during an eviction process and managed to prolong his tenancy for approx 6 months?I really would not want to be tied up for so long if at each juncture the default party keeps runnig me in a circle?
In subsequent posts you have mentioned offering 1/3 the balance
on 2nd notes. Is that an average point to start from without
at the numbers?

Thanks again


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