A good friend who specializes in distressed real estate assets such as notes and REO just bought 27 second mortgages with a face value of $2,153,400 for $2400 – that’s TWO THOUSAND FOUR HUNDRED DOLLARS.
He does a lot of business with the bank seller and this package was in addition to a 12 unit REO package he bought for 36 cents on the new appraised value. Even though this is an exceptional deal, it is not too far off of the 5 cents on the dollar that Bernanke testified about when selling TARP to the House.
None of the first mortgages ahead of these seconds have a Notice-of-Default against them. Two of the seconds totaling $54,275 are current, paying on time.
The most interesting is a $540k second in Jersey Shore. The home was purchased for $1.8 million with the first mortgage being $800k. The current appraised value is $1.2 million. My friend can actually foreclose on the property and make a killing or just offer the owner a buy out of $50k on the $540k second, make a 2000% return and get the other 26 notes for free.
I wonder at what level the banks holding hundreds of billions of these have delinquent home equity loans valued? -Best Mr Mortgage
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