Would You Buy a Note Where the Borrower Hasn’t Paid in 15 Years?

[Chris Seveney]

We recently came across a non-performing note that really made us pause.

It’s secured by a property in a lengthy foreclosure state (you know the ones), and the borrower hasn’t made a payment in 15 years. That’s not a typo—fifteen.

In years past, we might have jumped at this kind of asset. The payoff potential is obviously huge if you can bring it to resolution. But lately, we’ve become a lot more discerning (maybe “battle-hardened” is a better word?) when it comes to reviewing these types of loans.

Because here’s the thing:

After 15 years of non-payment, this borrower is either:

At the end of the road and out of maneuvers...

or

seasoned expert in dragging things out, filing appeals, loss mitigation requests, BK filings—you name it.

So here’s the question:
Would YOU buy this note? Why or why not? What would be your main considerations?

[Russell Brazil]

Depends on the price. Ill gladly pay $1 for.