How to buy a specific note from a bank

8 Replies

I'm going to be very honest about my situation. What I'm wanting to accomplish may be immoral but I'm looking for a legal way to get my bank to sell my mortgage to a trusted 3rd party. My soon to be ex-wife and I are both on the deed but only I am on the mortgage. I would like to sell the property, split the proceeds and go our separate ways. She has decided to move back in and refuses to sell. My idea would be to go into default on the loan, have my trusted 3rd party purchase the distressed note from the bank(not for a discount), and then refinance my mortgage through them with only my name on the deed so that I can sell. Any thoughts?

Well that is an ambitious plan, but if your lender is one of the large Banks your partner will not be able to purchase the distressed that directly. Once your loan goes through loss mitigation and if there is no resolution then the bank will either foreclose or sell your loan in a very large pool to a hedge fund. 

@Casey Speerschneider The odds of you being able to do this are about as likely as you Winning the lottery. If you could convince the bank to sell one note how would you control who they sell it to?

Appreciate the replies. @Bob Malecki What if during the loss mitigation I let the bank know that I have a party interested in buying the note at fair market value? I'm thinking even if I got the note into the hands of the 3rd party they would need to foreclose on me, purchase the property at auction and sell it back to me to clear her name from the deed.

@Account Closed Your scenario is not realistic. Your trusted 3rd party has almost zero chance of buying your specific note. He has to have the contacts and relationships to buy NPN's in the first place. If you defaulted on your loan, the bank may not decide to sell your loan or, if it does, there's no guarantee they will do so any time soon. There are too many factors that have to line up perfectly to make this work.

Your best bet is to work something out with your ex-wife. If she is completely uncooperative, you'll be headed to divorce court. Hopefully, you can reach some kind of agreement before it goes in front of a judge. I suggest trying to find any other alternative to the one you laid out. Sorry.

Originally posted by @Account Closed :

Appreciate the replies. @Bob Malecki What if during the loss mitigation I let the bank know that I have a party interested in buying the note at fair market value? I'm thinking even if I got the note into the hands of the 3rd party they would need to foreclose on me, purchase the property at auction and sell it back to me to clear her name from the deed.

 Don't waste your time, if you have equity they will most likely foreclose. If they don't foreclose it could sit for years on their balance sheet until they sell it in a pool of distressed debt. 

This is not going to happen.....find a different, more realistic solution.

Attorney time, maybe a Partiton suit, where if you guys can’t agree on a buy out between yourselves, the court sends it to a public auction.  Hopefully you guys can come up with a better solution.

@Account Closed

I'm no expert in notes so take my advice with a grain of salt, but here's an idea...  *hold my beer!

If your "friend" is willing to buy the note at par, then why don't you give him a note and mortgage in return for paying off your existing mortgage...  similar to a refinance...  He/She may have to use a RMLO to draft this new paper to be dodd frank compliant...  not sure talk to an attorney.

Next, you may be able to do a quit claim deed  or Deed in Lieu over to the lender for your interest in the property.  This should put the lender in the position to foreclose on her interest in the property...  may take some time depending on the state and some capital.

At foreclosure sale, there is a chance that some other bidder can out bid the lender and take the property for themselves...  so there is a good amount of risk in this plan to loose the house entirely.

On the other hand your friend the lender could end up with the property as an REO and then re-deed it back to you. However, your ex will still need to be evicted and may have some choice words when you meet her in eviction court and she realizes what has transpired.

I gotta say this is a crazy plan...  not even sure it would work.  Also, that would be some friend to do all that for you.

Is there not a way to handle this in normal divorce proceedings like force a liquidation of the property and pay her half, or pay her half to keep the property, or have her pay you half and you walk.

Lots of other viable options here....  If nothing more, hope someone has been entertained by my ramblings.

I'm in no way endorsing this plan...  just a mental exercise on how could one accomplish this....  but what do I know :P

Jeff V