Restructuring a Now Due Balloon Payment

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Posted by Jean Baptiste on August 19, 2009 at 13:00:39:

I have a borrower/client(does not own the note) who is unable to refinance a
balloon payment that has become due. I read in one of the
trade publication, during my research for a possible
solution to this situation, that the note can be
restructured by creating a new note and deed of trust which
can then be sold to raise the money to pay off the old loan.
According to the article the new note could be structured as
-Drop the interest rate
-Leave the payment the same
-Increase the PV
-Keep the same balloon
-Extend the term to whatever the borrower wants.

I am having problems understanding the note ownership
structure? How can an investor restructure a note he doesn't
own? How is the situation as stated different from a loan?
What am I missing? Any help from the experts would be
greatly appreciated.

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