PROPERTIES for PENNIES, CASH-FLOW and LUMP SUMSJoin Today
Please or Register to create posts and topics.

Zombie Mortgages are coming back to life

Interesting Planet Money Episode. Please take a listen and let me know what you think. Have any of you experienced this as a lender?

https://www.npr.org/2024/05/10/1197959049/zombie-second-mortgages-homeowners-foreclosure

Thanks for posting this Ben! I shared this in a Mortgage Note News post as well.

I reached out to one of the investors mentioned in the article and this is what they had to say:

Our companies have been very successful in doing modifications over the last 20 years with borrowers.  The other side of the coin is we are aggressive when borrowers do not respond.  This particular file in MA. Was a borrower who by way of her statements on the podcast was not accurate and did not come forward with the truth.  We tried extremely hard to work with her. Hopefully her attorney will work with ours.  I appreciate the fact you keep your following up to date and advised on current regulations.  The industry has changed dramatically but I still love it.

For the most part, my experience with borrowers has been positive. The majority of them know they owe the money and work hard to get back on track. A small minority of borrowers try to avoid paying their debts.

The biggest takeaway from the article for me is to make sure to respect CFPB Regulation Z and don't retroactively pursue arrears if the previous lender(s) weren't sending monthly statements (most likely the case with all charged-off loans).

And most importantly, approach non-performing note situations with the goal of helping the borrower, not the goal of squeezing every last cent or taking their home. I think this increased awareness of our industry is a good thing and will help more investors learn how they can ethically invest as value-add entrepreneurs.