Non performing seconds

2 Replies

I am buying at sheriff auction. There is a deal coming up in which Wells Fargo is the plaintiff and there are two defendants, the homeowner and US Bank N.A. I want to know if is at all possible to purchase the "second" from US bank prior to the sale to give myself a competitive edge against other bidders.

1. Will banks sell individual notes to the public?

2. If so, how the hell to you get the right person on the phone? 

From a logic standpoint ( I know banks seldom use logic) they could sell to me for even 10 cents on the dollar or get nothing as all of the proceeds may get eaten up by the first lien holder.

Please advise

Ryan

Originally posted by @Ryan Janssen :

I am buying at sheriff auction. There is a deal coming up in which Wells Fargo is the plaintiff and there are two defendants, the homeowner and US Bank N.A. I want to know if is at all possible to purchase the "second" from US bank prior to the sale to give myself a competitive edge against other bidders.

1. Will banks sell individual notes to the public?

2. If so, how the hell to you get the right person on the phone? 

From a logic standpoint ( I know banks seldom use logic) they could sell to me for even 10 cents on the dollar or get nothing as all of the proceeds may get eaten up by the first lien holder.

Please advise

Ryan

 It's likely the answer depends on whether the owner is paying the mortgage on the second. It's odd but often people will pay the second even if they default on the first. If US Bank is getting paid and the amount of equity in the property covers the 1st and 2nd at a foreclosure sale then the second is less likely to deal. Since you can't possibly know the answers to all of that (it's protected information) you can start by asking the homeowner if they want to be "bought out" and deal with it from that angle. Or, you can make an agreement with the homeowner to get the information you need for the 2nd and pay them a "moving fee". It can be done, but it is a little too advanced and detailed to cover in a post. I've done such purchases very successfully and very profitably. You just have to know the numbers and who is willing to do what within the transaction.

@Ryan Janssen , while some smaller banks will sell NPN to individuals if you can get in front of the right person, it is so unlikely that a large bank like US Bank would that it is safe to say it is impossible. I mean, nothing is impossible, but it would never happen unless the individual's last name is something like Buffet.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here