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Thursday, October 21, 2004

Step by step guide to buying preforeclosures

Many people just starting out in real estate investing work at buying preforeclosures (meaning they contact people whose house has had a notice of foreclosure filed against it and attempt to buy the house and pay off the mortgage before it goes to foreclosure auction). This is mainly due to the fact that large amounts of capital are not needed - you just find a good deal, get it under contract, then sell your contract to an investor who does have the money to buy the place. People who do this are called birddogs, since they find the deals and bring them to the investor, who pays them for their work (usually a couple hundred to a couple thousand dollars, depending on the deal). Since the birddog never buys the house, he or she doesn't need any cash. Easy though it sounds, people still have questions about exactly what they need to do.

Some time ago, on the discussion boards at richdad.com, a poster named UtahInvestor gave instructions on how to do this. Unfortunately, his posts often contained lots of typos, grammar errors, and tended to jump around. Often, all the pieces needed were scattered over several different posts. I went through and gathered these posts and distilled them down to a series of steps the birddog needs to follow. I wrote out the steps for two scenarios: buying the preforeclosure yourself and selling your contract to an investor.

This information is powerful! This is all you need to take your first steps towards getting out of the rat race of your 9 to 5 job. You can thank me later :-)

For buying a preforeclosure and reselling it yourself

  1. Check Recorder’s office for Notice of Trustee Sales filings. Find properties where first deed amount divided by the fair market value <= 75%. Don’t worry about second mortgages.
  2. Send out postcards or call owners found in step 1.
  3. For those people that are receptive, set up a face to face meeting.
  4. Before the meeting, search court records for the owners – find out about divorces, criminal charges, etc. Anything that might create a need for them to sell. Use this information to stop you from offering too much.
  5. Before the meeting, get a preliminary title report on the property from a title company to verify your findings of step 1.
  6. At meeting, find out their pain – listen to them, determine what they need, and offer solution. Also check out condition of house and verify that your FMV appraisal in step 1 is appropriate.
  7. Get quit claim signed by people on title. This should be notarized. Do not provide payment to owners at this time. They should move out immediately. Do not record the quit claim.
  8. If there is a second mortgage, negotiate with mortgage holder to buy it.
  9. When they have moved out, pay them. Meet them outside with their moving van. They give you the keys, you give them their money (or whatever they needed).
  10. Get place cleaned, carpet shampooed, etc.
  11. Place for sale ad in paper, post signs, get lockbox on door. (Or list with Realtor.)
  12. Make sale. Fill out sale contract. Sign and notarize contract.
  13. Take quit claim and sales contract to title company. Let them do their thing.
All above should take place in 30 days, more or less, to avoid getting more negative items on the owner’s credit report. If you need to do major repairs, you should insert step 5A where you find out the costs to bring the loan current, then make it current and keep it current until sold. In this case, you should not drag this out as the owners will not be able to get a new loan until their old one has been paid off.

For buying at preforeclosure and assigning contract to buyer

  1. Same as steps 1-6 above.
  1. Get sales contract with people on title. Buyer should be “your name or assigns”.
  2. Notarize document.
  3. Contact investor and negotiate price for contract.
  4. Write assignment contract assigning your rights of the sale contract to the investor. Contract does not list amount you are being paid. Notarize.
  5. Take both contracts to the title company.
  6. Investor pays you either when the assignment contract is signed or when escrow closes.
This method assumes you trust the investor, as there is no document forcing him to pay you. If you do not get paid, you can file a Notice of Interest or Notice of Lien against property. If you do not trust the investor, you can have a non-circumvent agreement stating you get paid x dollars at the close of escrow. In this case, give that document to the title company as well and they will pay you directly. But keep in mind, there is usually no reason not to trust the investor - he's in it to make money and the more deals you bring him, the more he makes. Thus, it is in his best interest to treat you well.

The most important step is step 6!!!! You must establish a rapport with the home owner. Be a great listener. Find out their pain, what they need from you. These people are being deluged with offers from other people like you. Make them feel comfortable with you and you will beat out all the other people trying to get their home.

49 comments:

Anonymous said...

Hi Shaun,

Thank you for compiling this information. (I got the link for your blog off of Rich Dad's discussion forum.)

I had a couple of questions... perhaps you could post a follow-up to clarify a few points:

In step #6: "and offer solution". I guess this is where the whole universe of "creative financing" comes into play. Can you post some follow-ups on various scenarios and the appropriate solutions for these?

In step #8: Could you clarify what you meant by "If there is a second mortgage, negotiate with the mortgage holder to buy it". Are you saying that the mortgage company should buy back their note for the second mortgage? What if this doesn't work? What's plan B?

For step #10: What is the reason for the assignment contract not stipulating the amount the bird dog should get paid?

Thanks!

Anonymous said...

Thanks for clarifying! Keep posting! Good luck with this blog!

Anonymous said...

Shaun,
I'm pretty new at all this so please excuse me if my question is stupid...
When you make a deal with someone who is about to go into forclosure, are you simply agreeing to buy the mortgage from them? If that is so, why wouldnt they just sell the home inorder to make more money?

I apoligize for my ignorance :')

Thanks,

Mike

Shaun said...

You are not buying their mortgage from them. You are buying their interest in the property from them.

The thing to remember is that people who are going to foreclosure are not thinking straight. They are in denial. By the time they accept what is happening, it is too late for them to sell the home - the foreclosure auction is usually just days away and that is not enough time for them to list the home, sell it, and close escrow. You, as the investor, can solve their problems. They assign all their interest in the property to you (via the Quit Claim deed). You then deal with the mortgage company to pay off their loan or bring it current to stop the foreclosure.

Anonymous said...

Hi Shaun great site, I really enjoy it! I am a newer investor and saw the link to your blog from the RD forums. I am currently pursuing a deal where the home owner is in pre-foreclosure until January the 7th. Given the situation, (FMV of 100k, house in decent shape, 77K owed on second mortgage, first is paid off) would it be beneficial to me to get the quit claim and take over the mortgage or should I wait for foreclosure take place then try and buy it at the steps? Also, what does one have to do to buy a house at the steps? If I didn't give enough details on the deal I apologize. I can give you any info. necessary. Sincerely, Jonathan jonathan1982morden@yahoo.com

Shaun said...

Thanks for the kind words. I feel it is usually better to get a house at the preforeclosure stage than wait for the auction. If you wait until the foreclosure auction, you will have many competitors also trying to buy the house. If you get the house before it goes this far, you've eliminated your competition.

Be sure to check for back taxes owed and the costs to bring the loan current. Those fees could be high enough to make this an unattractive deal. But if this is the case, keep watching it. Maybe when it goes to auction you can get it cheaper (any back taxes will still be due, but the fees to bring the loan current will not be present).

As to how the auction actually works, it depends on your state and how foreclosures are performed in your state. Are the judicial or non-judicial? I would suggest attending a couple just to watch before bidding. Keep in mind buying at the steps usually requires payment in full within 24 hours.

Shaun said...

Probably the best thing for you to do is call the county recorders office. Tell them you are interested in buying a house at the foreclosure auction and ask how you go about doing that. They are there to help you.

Shaun said...

I have no experience in short sales.

I worked preforeclosures for a while, going the postcard route. I got a 1-2% response rate. I have since funded an LLC for investing and think a better use of my time is letting others birddog for me and I will concentrate on fixing and reselling the properties.

While working preforeclosures, I did develop a database for tracking preforeclosure leads. It's pretty much geared towards the Phoenix market though (with links to Maricopa county's website for looking up deeds and notices). Organization is a big key when working preforeclosures and you need a system for tracking your work.

Anonymous said...

HI shaun , how do you find birddoggers and how to get lists to track preforclosures? Thanks

Shaun said...

Finding birddogs: Place an ad in the paper. Be sure to do it in the real estate section and not the pets section :-)

Preforeclosure lists: See Step 1 above.

Anonymous said...

Shaun,
This is a great keypost to get potential investors started. Bravo!

I have the book knowledge, but have just been too hesitant to jump in the market with hard earned dollars from my day job. Your posts are helping me to understand the the market from someone who has done it!

Keep up the great work!

Jack


Jack

MonkeyPig said...

Hi Shaun I look at your site from time to time. I look for foreclosures in the tampa-bay area and pay for a subscription to a daily foreclosure web site. I do have access to public records but its to time consuming. I pick out good deals and put a rout together and go knocking on doors on sundays. I have gotten 3 deads that way at 20k each flipping them. Acouple of deals I did a short sale, and fixed the place up myself. I put the house in a corp then put it in a landtrust so ther is no record of me owning it. Forclosures are gold mine with endless oppertunitys I hope I didnt say to much.

Anonymous said...

realestatemadman,
You said in your post " I put the house in a corp then put it in a landtrust so ther is no record of me owning it."
Can you please elaborate on the land trust part...your rationale?

Thanks
Tony.

Anonymous said...

hi shaun my name is jai i have a question can i quit claim the property to another invester to eliminate a regular purchase agreement

Shaun said...

jai - why? What are you trying to accomplish by doing this? A quit claim states that you are giving all your interest in the property to someone else. So, unless you already own the property, the quit claim from you is worthless. I can give you a quit claim for the Brooklyn Bridge, but I have no legal interest in the Brooklyn Bridge, so it's worthless.

If you are being a birddog, chances are you don't own the property, someone else does and you are selling your contract to buy the place to an investor. What you do in this case is use an Assignment Of Contract. That is like a quit claim, but it applies to a contract, not a property. Your contract must state the buyer is "your name and/or assigns" for this to work though.

Shaun said...

The standard real estate contract has a blank that you fill in with the buyer's name. In your case, fill it in with "Hoon and/or assigns" (but use your full real name instead of Hoon, of course). Talk to a Realtor to get a copy of the standard real estate contract in your area. An assignment contract is not really a standard form. Just write on a piece of paper something along the lines of "I, (your name here), assigns all rights and responsibilities under the contract between myself and (seller's name here), dated (contract date here), to (investor name)." Or talk with your title company. They probably see these all the time and know what it should say.

Anonymous said...

hi shaun,
I really enjoy your post. I recently got foreclosure listings from nationalvaluenetwork.com. Some contact informamtion has trust company and some has individual names. Can I still use your steps or do I have to deal with the bank or the trust company. I guess guess my question is, did this property already go through the foreclosure? if that makes any sence?, sorry I am new to REI and need some guideance.

Shaun said...

Anon.. I'm not familiar with that website and you need to be a member to see the details, so I can really only guess at what you are seeing. In a foreclosure listing, you generally see the name of the person or company holding the mortgage that is doing the foreclosing. This could be a company or a private party (person). You also see the name of the person or persons being foreclosed one - i.e. the people who didn't pay their mortgage. From what I can tell, that website provides lists of houses that will be going to auction, so they have not been foreclosed on yet - but they will be very soon. You can still use the above steps with these properties. However, I must say that services like nationalvaluenetwork.com tend to lag a bit in the timelyness of their information. You may find that the people on their lists have already been contact by multiple people all trying to do what you are doing. You generally get better results going directly to the source yourself - your county recorder's office. If they have their records on-line, just search there. If not, make a trip down there and do the research yourself. Often times, being the first to contact the people being foreclosed on is what allows you to make the deal.

Anonymous said...

Thanks shaun for the reply, made things clearer for me. I compared the prices on the lists with the market value on zillow.com, and it seems that the listed price on the foreclosure list is similar to the market rate. If it is going through foreclore why would they list it for that price? would I be able to negotiate somehting with the lawyers or realtor? I've heard its usually harder to do deal with them? I know these are all related questions, and I dont want to keep bothering you with it so if you can recommend a specific book on this type of investment would be greate. Again thanks again for your input.

Anonymous said...

Hi Shaun,
Just have one question..Is housing market in Maricopa city still a good buy???? Builder offering $75K incentives for their spec home.
Thanks,

Shaun said...

A good buy for what? An investment property? A personal residence? Only you can make that call. The answer depends on your objectives and financial situation.

Anonymous said...

Thanks Shaun for your quick response. Is it a good investment for flipping??? They also offer 10% co-broke..and I am a license real estate broker. I am just starting thinking about investing in real estate...(little late :) huh?).
Thanks, Dana

Shaun said...

I'm sorry, but I simply cannot answer that question for you. If you are a broker, you should have all the tools and/or contacts you need to do your research and reach a conclusion that is right for your situation.

Anonymous said...

I know...This will be my first investment..kinda nervous with doubt about housing market. I have a few houses that I list for sale...and no offer...Thanks!

Anonymous said...

Shaun,
Not sure if you already covered this or not. If you do attend the foreclosure auction, do you know if the owner can file bankruptcy up to the point of auction or is there typically a cut-off for this prior to auction.
Thanks for all your advice

Shaun said...

The seller can file for bankruptcy anytime before the foreclosure auction has a final sale. In fact, my Realtor's husband once bought a property at an auction the same day the owner filed for bankruptcy. They had to go check the timestamps on the auction and bankruptcy documents to see which was completed first. Luckily, he got the property because the bankruptcy was filed after the sale by an hour or so.

BlackBear said...

Shaun,

I've purchased homes at the foreclosure auction. I prefer to turn them into rentals. We still have strong appreciation here in Salt Lake. I'm young and prefer holding onto the properties. I am about to send out a mailer to home owners with a notice of default. Would I use the same process as stated above. Pay off the house and then refinance it? Is there an easier way if I quitclaim and assume the loan? I know many loans don't allow to be assumed. Is there a way for me to avoid the refi? When I refi the mortgage brocker looks at it as a "cash out" and it hurts my interest rate as well as I have to leave 30% loan to value in the house. Thanks!

Shaun said...

cs,

Yes, you would do it the same way. I'm not sure where you got the idea of paying off the house, but in general, that makes it harder to get a new loan. Banks prefer to deal with refis rather than cash-out loans, which is what you would have if you paid off a house completely, then got a new mortgage on it. If you have the funds to completely pay for a house and then want to mortgage it, it is easier to create a new company and have the company take a mortgage on the house. That way, you are still paying off the old defaulted mortgage and paying for the house in full, but from a paperwork standpoint, you have a new mortgage and you can refi that with a traditional lender easier than getting a new mortgage on a completely paid off house. This is exactly what I did on my Rental #1. Read those posts for more details.

Rhyne said...

Shaun, what I don't understand is once you get the deed to the property, essentially the interest in the property, what do you use to pay the people with?

You said you find investors to take over the property, so you continue making their payments or bringing it current? How are the homeowners paid and when?

This is one part that I don't seem to understand.

Thanks!

Shaun said...

As the birddog, you do not pay off the old owners. The person you sell your interest to does. This is why you do not record the quit claim deed once you get it. An escrow company needs to handle the recording of the paperwork and they will make sure everyone is paid off. Keep in mind the timeframe here. Once you have a property under contract (i.e., you have the signed quit claim deed), you should have an investor ready to buy the property from you or find one within days. The escrow company handles all the payment details. They take the cash from your investor, give you your small finder's fee, and use the rest to pay off the old owners. This whole process should be done sticking to a standard 30 day escrow period as possible. You do not want to leave the old owners without money after they have moved out!

Rhyne said...

So the birddog is the middle man, gotcha.

But if one wants to become the investor himself and not settle for the small birddog gains, what happens in that case? Assuming I have found such a case and have a QuitClaim in my hand, how would I proceed?

Thanks, Shaun!

Shaun said...

Then in that case, you really don't need a quit claim deed. You just need a standard real estate sales contract. You and the sellers each sign that, then you take it to a title company and they do all the paperwork. You'll need to get them money to pay off the seller's mortgage. Again, since the sellers are close to foreclosure, you won't have time for a standard bank loan so either you'll need to bring your own cash or use a hard money loan.

Rhyne said...

Thanks, Shaun.

So the total amount owed to the lender is paid off, not a portion of it? Who takes care of paying off the mortgage of that person, does title do that?

And lastly, the gain in that case is the difference between market value and the amount paid off, right?

Thanks so much!

P.S. Do you think someone with a pre-approval could get the job done?

Shaun said...

Yes, the lender has to be paid off in full. The title company handles all the money transactions. They will find out how much the old lender needs to be paid off. You give the title company that much money. The title company pays off the lender.

Pre-approval is not good enough. You cannot use conventional financing when obtaining property this way. Banks simply take too long. You need to use your own cash or get a hard money loan. After you have the property, you can refinance with a bank to pay off the hard money loan, but to stop a foreclosure, you cannot use conventional financing because it takes too long.

BlackBear said...

Shaun,

Please clarify: If I have the funds to pay off the defaulted loan. (I want to hold onto the property as a rental). How do you refinance the defaulted loan without the mortgage company looking at this as a "cash out" loan? If you pay off the old loan then get refinanced, and you only show record of owning the house for a few weeks, wouldn't the new loan be viewed as a "cash out"?

You mentioned using an LLC or some other entity to avoid this. (as on rental #1). I'm having a hard time getting specifics on this. Could you please clarify?

Also is it likely I could 'assume' the old loan and rate with the current lender of the defaulted home owner? How do you go about finding this out?

Thanks Again!

Shaun said...

cs - I think you are very confused. Think of the new company you make as a bank. It just happens to be a bank you own and control.

If you have the money to pay for the house in cash, then do this: Create a new company - LLC, S-Corp, whatever. Consult with your tax adviser for the best entity for you. Put the cash you have to buy the house into the new company as equity, starting capital, whatever. Treat this new company like a bank. You, as an individual, will buy the house. The new company, which you own and control, will lend you the money and create a mortgage for the house. The old, defaulted loan gets paid off with your funds from your new company. Wait a couple of months and make mortgage payments to your company. You then go to a regular bank and refinance the mortgage your company created. The bank doesn't need to know that you own the company or that it was your money to start with. They just know it's a mortgage that needs to be paid off. They pay the escrow company, the escrow company sends the money to your company, and you've got your money back.

I'm afraid I really can't be any more detailed than that. If you still have questions, talk to a tax adviser.

As for assumable loans, those pretty much don't exist anymore, so don't even bother worrying about them. You'll probably never find one.

Anonymous said...

Shaun,

It was nice to find your blog on the first search. Here's the deal. I'm very interested in doing this pre-foreclosure investing but i'm scared to death. I'm having problems understanding how to make the very first deal without any money out of pocket (i don't have enough to make the first transaction) but, I digress. What is the first thing I should do to get the ball rolling?

Shaun said...

Read this post. I list the steps right here.

Anonymous said...

Shaun,

Okay, but is this legal? I mean, does simply having a Quit Claim enough to make one in control of the property?

You state: "Fill out sale contract. Sign and notarize contract.Take quit claim and sales contract to title company. Let them do their thing." What happens at the title company? So, I i find a preforeclosure, offer the owners an opportunity to avoid foreclosure by paying new rent deposits etc. Then I put the place on the market for nearly what it's worth, sell to new buyer-take the Quit Claim deed and new contract to title company and they cut me a check? Seems to easy....

Shaun said...

If you have no money, you should be doing the second set of instructions - assigning the contract to an investor. Remember, time is of the essence. You need to sell quickly (usually less than 1 month) to stop the foreclosure. Only cash buyers or investors can buy this quick. You do not have time to wait for a bank approval on a buyer's loan. This is legal. As long as the people on the quit claim are the same as the people on the title to the house, you are fine. It sounds easy, but it isn't. You have to contact lots of people to find ones that are in such sire straights they need your help. You need good people skills. You also need to have investors lined up. Contact ones in your area and find out what type of properties they are looking for and concentrate your search on those types of properties.

Shaun said...

Oh, and I think you are a bit confused. The people being foreclosed on move out (step 9 in the first set of instructions). They do not pay new rent deposits. You have to make them realize they have to move out and that they have lost their home. You are giving them a chance to get out with their credit rating intact and no foreclosure in their file.

Max&Penny said...

Hi Shaun,

I'm new in the pre-foreclosure business and already found some properties thru Realty Trac (trial period). Since we're interested in one particular property for us, I did a lot of researches and most info are good except for the owner's phone number which is unpublished. Would you recommend going thru the Trustee instead? I'm planning on sending a postcard to the owner to start the contact and go from there? Do you have any specific set of postcards you prefer in dealing with pre-foreclosures. I could use some examples to give an idea.

Thanks.

Shaun said...

Max and Penny:

Don't bother trying to contact the Trustee. At this point, they still don't own the property and can't really do anything.

The postcards I used are here:

http://shaunsre.blogspot.com/2005/04/marketing-postcards.html

If their number is unlisted, your best bet might be stopping by to visit in person. They have probably already gotten a lot of postcards. If you don't want to stop by in person, a personalized letter might be better. Just something to make your letter stick out from all the others they are likely receiving. (If the property is in Realty Trac, lots of other investors know about it as well.)

Justin H said...

Shaun,

Been an awesome read so far! ALOT of good info that helped me feel much more comfortable! Still, I have a couple questions.

Bird dogs are typically people with no capital to start and are working on getting money together by doing this. In your first reply comment, you say:

"Find out why the person has to sell or what the source of their money troubles are. Maybe they had their car repossed and don't have the money to buy a new one. They'd probably really like it if you could get them a car, so go buy them a used one. That may be all they need to sign the house over to you. Or maybe they don't have anywhere to live after they are foreclosed on. Take them to an apartment complex and pay their deposit and the rent for two or three months. This is why it is important to listen closely and figure out what they need."

But how can someone with no capital offer these things and how can they come out on top if, in the end, they are basically only getting a "finder's fee" if they are helping the current owners like that?

How much success or experience do you have negotiating a second mortgage payoff? Will they even seriously talk with you unless you already have the house in contract? If not, how will you know if that second mortgage would make the deal unprofitable before signing?

Who can perform title searches to find out outstanding liens on it and what legal permission do you need to obtain to do it?

Is it worth paying for the background information you mention that may indicate their reason for foreclosure?


Thanks for your help so far and the help yet to come! I'm glued to your blog, reading it from the beginning!

Shaun said...

Thanks for the kind words.

Re your bird dog question: Those are all just examples. What is all boils down to is "where there's a will, there's a way." Found out what the sellers need and find a way to get it. If I can get a house for $20,000 under market value, I have no problem buying a car for the sellers for $5,000 or paying $3,000 for apartment rents and deposits - even if it means getting a cash advance on my credit card. If I'm just a bird dog, add those costs to your bird dog fee. Instead of selling the contract to an investor for $1,000, sell it for $3,000. If the deal is good enough, the investor won't care. Note that it is very helpful to have potential buyers (investors) lined up before you do this. Make sure the property you are buying is of the type the investor likes to buy.

I have never negotiated a second mortgage payoff myself. I have brought properties from someone else who has done it. Bascially, you tell them the property is in foreclosure. They will probably not get their money back when the property is sold. Offer to buy the mortgage from them for whatever price you calculate makes sense. They may not go for it. They might. You never know. For them to talk with you, you may need to get a signed authorization from the owner of the property stating you have permission to discuss the mortgage. It all depends on the bank holding the second mortgage. Call them and ask.

Anyone can perform title searches and no special permission is required. These are publically recorded documents, which means anyone can view them. Where I live (Maricopa county, Arizona), the County Recorder has all the documents online, so it's real easy to search and view them. Lots of other states also have the info online. Check the Recorder's Office in your area.

I would not pay anyone to get any background info on someone. Again, most of this stuff will be publicly recorded, so you can find it yourself. This includes not only mortgages and stuff, but legal judgments, liens, civil lawsuits, etc. When researching properties, I have often found records showing people have unpaid hospital bills, homeowner's association payments, unpaid taxes, etc.

I think most of your questions will be answered as you read more of this blog and as you try to do things yourself.

Justin H said...

I have another one for you that I've come across as I make progress.

I was researching properties in preforeclosure and have found a few that recently (within a month of the foreclosure filing with the court) have an "Assignment of Mortgage or Deed of Trust or Security Deed" on file. I can email these files to anyone willing to help. They are public information so there are no security concerns.

My question is: Is a quit claim and this "Assignment of Mortgage" the same? I don't see anything on file about the satisfaction of mortgage like I usually do for paid off properties. In all cases, the owner or MERS (Mortgage Electronic Registration System) was assigning the mortgage to a mortgage company. This mortgage company is the one filing for foreclosure on the property even though they just took assignment of the mortgage or deed about a month ago. What does this mean??



Justin H

Shaun said...

An assignment of Mortgage is not the same thing as a Quit Claim deed. An assignment of mortgage is a document showing that the original lender sold the loan to a third party. This happens a lot, especially with foreclosures. The original lender (usually a bank, MERS in your case) will sell the non-performing loan to a third party. The assignment of mortgage assigns all the rights of the original lender to the new party, which is what allows the new party to initiate or continue the foreclosure. Note that the borrower is not even involved in this transaction. The new mortgage holder will send a letter to the borrower telling them a new address to send payments to, but that is the extent of the borrower's involvement.

Shaun said...

By the way, you'll often see this a lot on new purchases. Many lenders make the initial loan, then immediately sell the loan to someone else. If you've ever got a mortgage in the last couple years, you should have been given a piece of paper that states what percentage of loans your lender keeps and how many they sell. When I bought my house, the document I got showed the lender sold 100% of their loans. Sure enough, within months of closing, I got a letter saying my loan was sold to another company.

Justin H said...

Thanks Shaun! That makes sense. I think I found a pretty awesome potential deal then, I just have no investors or buyers :( It's not for lack of trying though. I'll keep looking and once I find one, I'll be more comfortable with contacting the homeowner.

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