BiggerPockets

Can anybody help me here Thank you

I would be real cautious about this. I do not think it is legal. First of all if they are going to buy as a short sale and sell back to you at market value there is a good bit of money they already made so why the 3500 fee? Stay clear of these guys.

I agree with Bill's assessment of what it sounds like they are offering. I personally know somebody who does the note buying, but only with second position liens. One of his strategies is to restructure for more affordable payments, allowing the borrower to stay in the house.

Could still be another scam targeting those about to experience foreclosure though, since the scammers have a way of trying to disguise behind a front that sounds legitimate, and receive an up-front payment and disappear. No way for anybody here to tell based on what has been posted.

I have seen that here in NC but those people got something alittle extra. Silver Bracelets due to loan fraud.

There are always people working "on the margins" of real estate. Ususally, a seminar is given on a way to make money in real estate with little or no cash investment. Often, these methods target homeowners in a foreclsoure situation. The problem for the homeowner becomes trying to figure out which are the legitimate players in a sea of con artists. As a private lender I have seen all kinds of nutty schemes that borrowers who are in default pay for. When the scheme doesn't work and we go ahead with the foreclsoure anyway, the borrower is always shocked. Here are a few tips for borrowers considering hiring a third party to help them with their default problems.
1- 3rd party intermediaries have no additional powers than what you have. Almost everything they try you can try yourself.
2- Often, if the 3rd party were to be "successful" in "saving your home", you end up in greater debt than you started.
3- Sometimes it is better to lose your home in foreclosure, move to less expensive quarters, and start accumulating cash again.
4- Most lenders consider the approaches used by 3rd party intermediares "bizarre" and won't even acknowledge them.
5 - Run any of these programs you are considering by an attorney. If you can not afford the $150 fee for the attorney to review the offering, seek hekp at a poverty law center.
6- Never pay for these services up front

Buy the note/mortgage or doing short-sale and then sell the house back to you. Doing short-sale and sell back to you is ilegal and is a bank fraud which you caused the financial institution a "material loss" in a scheme which you still own the property. Buy the note? That is another FRAUD by the preacher whoever that is. First, big institution don't sell note, they sell at BULK bank to bank. Second, you can't find the note department at the bank, they virtually don't exist. Thrid, if the trickster were able to buy it, they have to demonstrate cash in the bank and your mortgage co will have to do a BPO or appraisal of your house to the current market value. Whatever they are preaching is not possible and can not possibly be done. Ask the con artist "how many deals this was done" and show me some customer satisfactions and proof of your service contract in writing.

Sincerely,

former Bank Vice President

It's hard to trust anyone these days.

The original post did say that they were asked to pay $3,500 when the deal was complete - so from the original post they are not asking for anything up front?? Clearly if they are asking for any money up front I would say that it sounds "scammy".

There are posts on this forum that discuss buying a home through buying the note - so as a twist on buying the home and just buying the note - this is possible. Though it is much more difficult to go buy a specific note. For example it is easier to find a note for sale then contact the homeowner than find a homeowner and then track down a willing seller of the note.

The issue - are you being approached by a legitimate company or a scam company using a seemingly legitimate scheme?

That's always the big question.

Originally posted by Financexaminer

Sorry Felix, it is done, obviously not at your bank. If you have a slow pay or have given notice of default and that borrower and I walk in ask to buy the note, and you deny the purchase and proceed to foreclosure, you will be sued and try to justify not allowing that as a transaction in lieu of payment! There might not be a discount, but there usually is something.

I suggest the original poster find an individual investor to do this and modify the note for a better return. They can't "sell" the house back unless you grant a quit-claim deed.Buying the note is not taking title. Paying up front fees to me is pretty much a scam to me. Bill

The only way a bank can sell a note is if they portfolio the loan meaning they do not sell the note as the big banks do. These are usually community banks and local credit unions. To see more about buying notes go to the proper forum named "Tax Liens, Notes, Paper, & Cash Flows Discussion"