Modify or Foreclose? What’s Your Go-To Strategy for NPNs?

Question

💭 Question for Note Investors:

When buying non-performing notes, do you prefer to rework/modify the loan or go straight for foreclosure and property? Curious what most investors are doing in today’s market.

Chris Seveney · Answer

we always start with the legal process as that is the fastest way to get the borrower to the table to allow you to rework or modify the loan. Our goal is to rework or modify the loan, we are not real estate hungry where we want to own the assets - we want to remain the bank and not a real estate owner.

Rick Pozos · Answer

I dont do a whole bunch of notes, but when I do it is usually np. I try to talk with the homeowner. If they want to work with me, I will. If not, I know what to do.

I would much rather get the note performing and double my money in a year or two, but foreclosure works too. Sometimes, it just takes the threat of foreclosure to get the homeowner to the table.

Modify or Foreclose? What’s Your Go-To Strategy for NPNs?

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