BiggerPockets

I haven't heard of this policy. Interesting.......

I'd like to know if anyone else has heard of these implemented restrictions. If so, any idea how to get around them?

Charge them with discrimination!!!!!

A good real estate attorney can get them to remove the clause on a case by case basis. The problem : Approval is subjective and it might be cost prohibitive to do so.

Let's say, for arguments sake, the approval letter is issued. Then, you contact your attorney to start the appeal process. Well, from experience, it takes several weeks to get this thing removed, in the meantime the approval letter expires and guess what, they do not extend it. Now your faced with paying an attorney his fees.

My advice:

1. Sell your stock in all these banks cause they are all going to burn eventually!

2. Tell every buyer and seller you come into contact with how terrible they are to deal with and to transfer all deposits into these banks into a regional or a credit union.

3. Discourage all buyers to not use national banks for mortgages because they do not care about anything other than their bottom lines and would rather see you burn in hell should you ever need their help.

4. In your own business accounts, you should be using non of these banks.

5. Write in your blogs how terrible they are to deal with and recommend to readers they pull all business dealings with them.

Let them choke on their own REO inventories, then when all the buyers have taken up the tax credits and there is no one left to buy their crap, lets all low ball them!

Conspiracy is a double-edged sword.

BCory,
Do you have this approval language? I'd like to read it.
My question is if your acutally double closing, and not assigning, how can they dictate it?

Hi, Rob is right on here. I purchased notes years ago at a discount before a "short sale" was ever strategy. Then, discounts amounted to costs the lender preceived as expenses in foreclosure, nothing like what is done today, but the overall strategy is the same. Acquiring the note puts you in the lender's position. After you own it, you can do anything you like, modify the note, sell the income stream, provide cash for keys, rehab it with or without the owner in the house, the list is endless. It's also great for pre-foreclosures. I've been advocating this for awhile. In fact, if a loan becomes "classified" as a poor permorming debt or the next level, doubtful, it's possible to acquire these notes at the direction of the borrower and you're pretty much in the drivers seat on the deal when purchasing the note at par (its principal amount). There are lending risks assumed, so it's important to get your borrower onboard early in the game. I worked out all kinds of deals with borrowers. frrom leaving them in there to providing a deed-in-lieu-of-foreclosure, reahbbing and flipping it.
As Rob pointed out, there are no seasoning requirements to be concened with. Since the lender takes the note and it's paid off with your new buyer, it's as if the seller sold his house with his mortgage in place. You can have a lender's title policy and no need for title coverage as an owner. Buying a note also avoids any RESPA, it's not a real estate transaction, but financial laws will exist for assignments and modifications. Any premium is income together with interest income. The down side is if you don't get a good written agreement with your borrower and documents lined up properly you could end up going the foreclsoure route, redemptions and evection. Taking a quit claim deed will not wash out any other liens. As with anything in real estate due diligence is the key. Bill

Scott,

I totally agree with your post. The problem I had was when I got to #4 if we can't use BofA, Chase, Wells Fargo, WAMU, Wachovia, EMC, and America's Servicing Company. We are kinda stuck! LOL

Now to the rest of you looking for the way around this problem there is a REALLY SIMPLE SOLUTION!

BUY THE NOTE! After the Short Sale is done instead of buying the property BUY THE NOTE! This is something I have been doing for YEARS! Now with that being said Not only do you avoid there rule on this there also is no title seasoning!

Can you double close still? Yes instead of buying the house I am closing on the note and becoming the bank.

Will Transaction funders do this? Mine will!

This is the best way to do this in 2010! Oh and it also worked well in 2009, 2008, 2007, 2006, 2005 and so on!

Be creative its FUN!!!

Scott,

I totally agree with your post. The problem I had was when I got to #4 if we can't use BofA, Chase, Wells Fargo, WAMU, Wachovia, EMC, and America's Servicing Company. We are kinda stuck! LOL

Now to the rest of you looking for the way around this problem there is a REALLY SIMPLE SOLUTION!

BUY THE NOTE! After the Short Sale is done instead of buying the property BUY THE NOTE! This is something I have been doing for YEARS! Now with that being said Not only do you avoid there rule on this there also is no title seasoning!

Can you double close still? Yes instead of buying the house I am closing on the note and becoming the bank.

Will Transaction funders do this? Mine will!

This is the best way to do this in 2010! Oh and it also worked well in 2009, 2008, 2007, 2006, 2005 and so on!

Be creative its FUN!!!

Scott,

I totally agree with your post. The problem I had was when I got to #4 if we can't use BofA, Chase, Wells Fargo, WAMU, Wachovia, EMC, and America's Servicing Company. We are kinda stuck! LOL

Now to the rest of you looking for the way around this problem there is a REALLY SIMPLE SOLUTION!

BUY THE NOTE! After the Short Sale is done instead of buying the property BUY THE NOTE! This is something I have been doing for YEARS! Now with that being said Not only do you avoid there rule on this there also is no title seasoning!

Can you double close still? Yes instead of buying the house I am closing on the note and becoming the bank.

Will Transaction funders do this? Mine will!

This is the best way to do this in 2010! Oh and it also worked well in 2009, 2008, 2007, 2006, 2005 and so on!

Be creative its FUN!!!

Originally posted by Marcus Mccray

Hey Bill and Rob,

Is there anymore info you can give on this? I am currently in process of buying a short sale (getting it approved) in order to flip it. I was going to have myself put on title while the short sale approval was in process to try and avoid the 90 day seasoning clause. How would I go about about buying the note (assuming that the bank approves my price)?

I am not an experienced note buyer, but I have bought and sold NPN's before. There are differences on the approach between a short sale proposal and purchasing the note and the two are not necessarily interchangeable. Simply put, in one instance your asking for a lien release, and in the other your asking for a transfer of interest.

Moreover, it is difficult to buy notes from the large banks because most of the notes are securitized in large asset pools. In my opinion, a short sales is the least risk adverse and should be attempted first. However, if you find an NPN with a local bank or credit union, I would feel more confident that the deal could be completed. If your talking a large national bank, forget it, you might as well beat your head against a wall.

I went to college with a local commerical underwriter who calls me every couple of months with a non-performing construction loan. Here is a good example of an opportunity to purchase an NPN. Local, small bank, bad asset.

So, under certain circumstances, I agree with Bill and Rob that it is a viable option worth exploring especially if your risk tolerance is high. Before attempting this yourself, I would certainly suggest reading up on the subject thoroughly and even attending some REIA courses. I have seen several experienced get burned.

Hi, LOL, OK, pick a topic!

A short sale is the reduction of principal, the same amount on the note is a discount. It's less headaches for a bank,national, state or other institution to sell a note at a discount as they have done that for years, it's everyday business. For any institution that is federally regulated, they can not sell a note other than to another fed regulated institution unless it is at the borrower's request/direction. The amount of the discount could be the same as the reduced principal in a short sale. WHile you can't force a lender to sell a property to you, you can force them to sell a note, securitized or not, if it's a problem loan, but forcing the deal may mean less of a discount, if any at all. Bill