Negotiating payoff discounts for borrowers

[Don Konipol]

We have had quite a bit of success with a new service we provide as an adjunct to our private loans. When we get a loan request for a refi, we ask the borrower if he’d like us to contact the current note holder and seek a discount for payoff. We’ve been able to receive discounts on two of the last three we attempted.

We just did a $1.2 million loan secured by a golf course with excess developable property in Indiana. We negotiated a $90,000 payoff discount. $55,000 got credited to the borrower, and out of the remaining $35,000 we kept $27,500 and gave the mortgage broker a $7500 bonus on top of his fees and points. Everybody was extremely happy!