Has anybody heard of this

16 Replies

I am being contacted by people that are telling me they can help me with my upside down loan they are saying they deal with the bank and buy the loan for a very low price and then they sell it back to me at the current market value they say it doesnt heart my credit and it will be $3500 after they have done the deal anybody heard of such a thing and or have any info about it Thank You :roll:

Just a guess, but it sounds like they might be trying to buy your house as a short sale, then sell it back to you at market plus charge you 3.5K for doing it.

If that is the scheme, doubt they could pull it off if you are current on your loan. Sounds shady at best, probably illegal as well.

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.

Hi, this, from what you said, is buying the note, perhaps at a discount. A lender can seel the note for less than the principal instead of doing a short sale. This is has been done for ages. SOunds like they are buying the note, restructure the obligation and have you execute the modified loan. I use to do this. I'd also do loan at par, meaning with no discount by the lender. Sounds like they want to charge you a fee of $3,500.00, this is where the rub might be. It will be a loan cost in the modification and a new disclosure for the APR will need to be made. There will not be a forgivness of the note amount to you, so no tax problems. As to credit, your obligation is probably late anyway, so it's not paid as agreed, but this is not a forclosure. Effects on credit would probably be less since you are not a party to the note sale, other than giving consent, if the buyer is not an insured regulated lender of secondary market entity. I suggest you check this out carefully and talk to you lender about it. Bill

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.

Sounds like a scheme to me. Be very careful with such deals they normally end up tricking you somewhere in the fine print. As sad as it is to say but if something sounds to good to be true it normally is. Good luck with your situation hopefully it works out in your favor!

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

Agree with Don - specially on his last point: never pay upfront for these services. If they charge upfront it's likely a scam.

One lady I dealt with before who was in foreclosure paid $3,000 to a guy who promised to stop the foreclosure. The guy never returned her phone call. Good thing she found me through a referral and one week before the foreclosure auction, I stopped the auction.

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

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

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.

I would be extremely weary when hearing such deals from banks. You have to realize our current market and the economy that banks are trying to pursue deals that might not be in the best interest for you. I would look extremely well at the fine print and make sure you know what you are getting yourself into.

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"

Ca. now has laws in effect that deal with this type of scam. Go to Attorney General Web site. While you at it, report the Company, so we can get these scum bags off the street. Get professional help if you want to sell and/or modify your mortgage.