So your friend is struggling to make her mortgage payments and you would like to buy the loan off of her lender at a discount. How did that go for you? Let me guess, they quoted you the payoff on the loan including back interest and fees with no discount. There is a reason for that.
It’s not impossible, but highly unlikely you’ll get a discount on the deal. With Castle Rock, we routinely buy loans at a deep discount, but we are buying the loans that lenders are wanting to give rid of. If the lender comes to us and says “We have these 50 loans that we would like to sell…what will you give me for them?”, we can usually get a reasonable discount off of the value of the underlying collateral. If we go to the bank, however, and say “I want to buy the loan on 123 Main Street,” they will likely come back and say, “sure, here its he payoff including interest, late fees, and legal fees.”
Banks, particularly large institutions, will usually not budge if you approach them about a specific property. Sometimes you will be lucky enough to speak with a knowledgable Special Assets Officer that actually has the authority to negotiate a discount, but those are few and far between. The way we usually get a discount is from specific portions of a portfolio that an institution has already marked down on their books and they put it out for sale. Unfortunately, the prospects of buying it at a discount aren’t great.
I would, however, try to find out from your friend who the person is that is handling the collection of the asset. I would try to climb the ladder a bit and find out who that person’s boss’s boss is and reach out to them directly. It is highly unlikely that a collector on a consumer mortgage has negotiation authority.
If the loan has been transferred over to a foreclosure mill, it’s even more difficult. These foreclosure mill law firms get paid more if they complete the foreclosure, so it is normal for them to ignore attempts to pay a loan up to date or to buy the loan. There have been many firms in the past 15 years face legal action over ignoring requests to work out a solution in favor of jamming a foreclosure through, which is normally more lucrative for the law firm. In this case, your best bet is to still reach out directly to the institution that owns the loan to seek someone up the ladder that has the authority to make a deal.