How do I track down the owner of a note?

Question

Hey guys,

So this may be a very generic and broad question, but I have a situation where I have a potential deal that's on the line.

Long story short, I need to see about buying the note outright from the lender of a certain property, and I have absolutely no experience in doing this.

I don't even know where to start. How do you track the person who owners the note?

How do you begin negotiations?

Any advice tips etc would be very helpful.

Thanks!

Jaren

Jaren Barnes · Answer

Grandson  isn't responsible for the *loan, not note, sry.

Jaren Barnes · Answer

The issue is that the loan is in the name of the grandfather, who is deceased, but the property is in the name of the grandson. The property is facing foreclosure, and the grandson is open to working with us to do a shortsale, but can't because he isn't responsible for the note.

Thus, if we can buy the note, we can foreclosure on it and have the owners walk away with cash.

Also I have brokers that work within my company and they could call on my client's behave if it made things easier.

So you're suggesting to start with looking up the lien up and then checking out land tax records to see who the creditor is?

How do I determine if the note is private or not?

Rick H. · Answer

That's like counting the number of cows' legs and dividing by four.  You'll probably get to the same conclusion but buying a particular note in order to do a short sale is a really, really long shot.  Sounds good on paper, though.

Should tip you off that, even if you owned the note, you need a seller with standing to comply with terms if any short sale. That us, they'll need need capacity, powers and authority to approve any short sale.  They wouldn't have to do diddly squat if you owned the note and foreclosed non-judicially. However, you chance of acquiring the note are less than not good.

Now if you got a receiver appointed with powers to marshall asset and a court order for a super-priority lien, you might have something.  Or a PC 11420 Order.  However, you still won't have much of anything left after they bite into your profits.

I say, keep on casting for better fish.

Bill Gulley · Answer

Couple issues, one, I guess you mean you work with a mortgage broker, they aren't "in" your company unless in some other capacity. This is a foreclosure, consulting with the grandson can have issues. Next, the grandson needs to see an attorney as he does have rights to assume the note and negotiate with the lender, if he inherited the property. The attorney needs to address the lender, if some lender is saying that kind of stuff, sounds like it might be an unknowing investor type who doesn't have a clue.

Regardless, buying the note puts you in a lender position. Buying a note is not buying the property, the GS would need to give you a deed, that's if the estate has been closed.

This doesn't sound like a DIY deal to me. If you have a mortgage broker see what they can find, ultimately you'll need an attorney and understand that the lender has no obligation to sell the note, there are some tricks to motivate them but you can't force them to, unless you get to court.

This could also get expensive. Sounds like the lender doesn't want to go through the pains of the estate issues, well, they have no choice, it should be pretty easy to get an attorney involved in the short sale transaction and just buy it. :)

Wayne Brooks · Answer

Trying to buy a particular note will be next to impossible, let alone at a price you like.  If the property is in, or has gone through, probate and the grandson is the owner, he Will be able to do a short sale.  Short sales on inherited property are not uncommon, but I haven't done one.  You'll need an experienced short sale agent.  When you say "facing foreclosure" I assume you mean payments haven't been made, and you're waiting for the foreclosure process to begin.  Do you know who the servicer (bank) is?  The grandson needs to start with the servicer.  He could also inquire about a DIL, which can also involve cash for keys.  The mortgage holder would have been noted/listed in the probate doc.s

Bill Gulley · Answer

What seems to make you think that has to be the way to attack the issue? What's the issue, why not pay it off? Tracing the current note holder can be very involved, time consuming and hard enough for a broker, much less someone off the street trying to get to a servicer or sub-servicer who has no reason to disclose who the current holder may be. You can look the lien up on the property as well as any assignments, but you don't know, really, who the holder might be at the end of the week. A private note should be easier to find in the land records and then find the creditor. :)