Getting a Discount on Your Second Mortgage Part 2

Comments (3)
July 17, 2008

Part 2 in our video series outlining how would can take steps to buy back your second mortgage for significantly less than when you currently owe.

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3 Comments, Comment or Ping

  1. liza woelk

    hi Brian,
    weve spoken and emailed a bunch already. i just watched this discount on the second mortgage video today. sounds revolutionary. is this what you do if you short sale and the 2nd mortgage still remains (if its not considered purchase money)?
    this seems like it would work if you short sale or short refi.
    let me get this straight….once you short refi and some of the first is forgiven, could you do this to have some of the second decreased as well?

    Liza

    Sep 3rd, 2008

  2. liza woelk

    thankyou

    Sep 3rd, 2008

  3. Brian Kurtz

    Liza,
    This concept of getting a discount on your second mortgage is not really a short refi, nor is it a short sale.

    The idea is that you “buy back” (either directly or more likely indirectly through an investor or LLC) your second mortgage at a discount.

    If you have a 2nd with Citi that is current, they might sell it to Countrywide, who may sell it to Wacovia. The mortgage (paper) is being sold as an investment just like stocks or bonds.

    Most of the time the investment is sold at (or close to) face value. So if the 2nd mortgage is for $100k and Citi sells it to Countrywide…it’s usually sold for close to $100k. The benefit to the buyer is they get to collect on the interest in the future.

    However, if a loan goes bad they start selling these notes at a discount.

    The idea that I had (and others have had LONG before me) is that if Citi might sell a second mortgage to Countrywide for say $5,000 (5 cents on the dollar) then why can’t the homeowner buy it back for that amount?

    The simple answer is because “They” don’t want that to happen. People do NOT need to get the idea in their heads that they can buy back their own debt at a discount. That’s what they would like you to think.

    But they will sell at a discount. So the trick is to find out how YOU can create a work-around and enable yourself to buy the debt back at a discount…forgive it to yourself…and then never report to the credit bureaus that you closed it out at a discount.

    Not an easy thing to do….but possible.

    Sep 3rd, 2008

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