What would you pay for this note?

[Larry Flanagan]

175 payments of $700/mo, well secured by prime RE that you would love to foreclose on but will most likely have to just sit back and collect the monthly for the next 15 years.

[Account Closed]

Originally posted by @Matt Devincenzo:

Originally posted by @Larry Flanagan:

Lets just say foreclosing would be the most favorable outcome.

You need to learn how a foreclosure works with a note. You don't just get the asset, it goes to auction and you are only entitled to your notes balance plus interest and costs associated with the foreclosure. Overages are still owed to the borrower since that is their equity that they have in the property.

Matt: any idea why this misunderstanding about foreclosing on a note keeps reappearing here on BP lately? Is it old school thinking about CFDs that has them believing lenders automatically get to "repossess" upon default?

I talked to a seller today that owes $25K and has over 50% equity. Like many, she assumed that upon foreclosure that the bank gets the house and she gets nothing. We have tons of third party investor buyers at sale here, so there is no way she wouldn't get an overage.