Buying defaulted paper

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Posted by J.T. on February 28, 2002 at 00:16:20:

Institutions seem more willing to do short sales than allow you to buy the defaulted paper in pre-foreclosure. However, you must deal with buying the property through the seller in this scenario and distressed owners usually have little motivation when they realize that they have nothing coming out of the sale.

I was told ( by a mortgage company representative) that the process for getting approval on a short sale was much shorter (days) as compared with (weeks) for a sale of the defaulted mortgage. He also said that institutions are not selling to the individual investors like they used to. I ended up with a short sale, but dealing with the distressed seller was more than I bargained for. It's very difficult when they realize that they're not getting anything from the deal.

Buying the defaulted mortgage could possibly keep the seller in the property and give me more options.

Based on current experience is it still feasible to go after defaulted paper from the institutions?


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