Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
Hi All,
I just purchased a nonperforming note in 2nd position on a nice home in Los Angeles. The first is performing and listed with Chase. There is equity in the property even with both the first and my second. The borrower filed BK 7 in 2009 and all debts were discharged.
My loan servicer says that since the borrower has a discharged BK7, they are not allowed to contact the borrower per the new Dodd-Frank CFPB laws. Is this true? It seems that my only option is to have an attorney send a letter of intent to foreclose. Does anyone have any advice on other tactics to get the borrowers attention to negotiate a payoff?
Thanks for your input and wisdom Dion et.al. This confirms what my servicer has told me and I will have the FC attorney issue a LOI to foreclose to get the borrower's attention and see if they will play ball.
I'll update this thread as progress is made so others can get an idea of what is involved.
Bob
Honestly, I think a letter of intent and using an attorney is a waste of time. A Notice of Default is intent to foreclose and IMO foreclosing trustee services are in a better position to do it right.
It appears to a CFPB ruling, not something in the original DF.
Yet another reason to stay away from consumer loans.
I know. Like Rick said above, now consumer notes are all about collections (and origination). It's one thing to get set back by a borrower filing BK. It's another to sign up for a minimum 8 month period after the first missed payment.
Hi Folks, following up on the result of this note. We filed for FC due to happen on 10/21. The borrowers finally started to negotiate about 4 weeks prior. We went back/forth and I settled for $25K cash payoff. My cost into it with attorney fees was about $17K so this was a 68% return on my money in less than 9 months, not bad.
My FC attorney advised that even though unlikely they could file a BK 13 and push my note out to non secured, so I figured a bird in the hand lets me take my funds into another deal faster.