I am working with a client who is sitting on some substantial amount of land and several businesses. Several years ago, she had to do some sort of bankruptcy as advised by her attorney, and was forced to do a consolidation. Essentially, all of businesses and land they own was somehow wrapped into this bankruptcy and was forced to do a repayment on the loans she took out. Well fast forward a few years later, the debt on the property/business is around $4M, but its worth roughly $18M. I just found out that an investor had purchased the note for a certain amount, and they have been making payments to a newly formed LLC.
My question is, what happens when an investor buy the note on the property? Can the owner redeem it? If I wanted to pay off the loan amount, will the owner receive a free and clear tittle?
I am trying to find out more information on what happens once an investor purchases the note, but not having any luck.
Thank you for your input!
When an investor acquires the note, they are the new lender & will assume the rights as the lender collecting the debt.
The owner's right to payoff (redemption is not accurate) the existing debt are spelled out in the terms of the note (and possibly the BK ). If you decided to pay all debt & all other existing liens that may be present ( not just the note in question) the owner would have no liens against the property.
Yes Basically the new note owner becomes the mortgage holder if the property is serving as collateral for the loan. You simply contact the note holder and offer to pay him off on the loan. However that does not dismiss any other liens on the property so you have to research that out.
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