Posted by River City on January 28, 2009 at 07:43:22:
I would be somewhat leary of accepting this as the “final” document. Generally, lenders would certify a copy of the original Note so they could get the loan insured by HUD or guaranteed by VA, etc. The original Note should always end up in the hands of the “owner” of the document. So, if you are purchasing the Note, you should have the original in your possession. If you are using the Note for insurance or guarantee purposes, you would use a certified copy. I suggest you hang onto your money until they give your the original.
I have been approached by a company that says it bought a portfolio of bank notes. They are trying to sell me a note they say is performing at a discount. When I asked for the paperwork, they sent me a “Certified Copy” of the note, but claim they do not have the original and it was not necessary because they have a certified copy. Is this correct?
Posted by John Merchant on January 29, 2009 at 18:45:40:
First, I’ve seen lots of trashy notes from these so-called bank portfolios and have yet to see a really good, well secured note in one of them.
Second, if I were to be sued on any such note, I’d demand the original signed note be produced at the trial and if the Plaintiff could not produce it I’d have the suit dismissed.
Also this “performing at a discount” sure sounds like the note debtor isn’t paying as agreed so the note is alreay in default.
If this is the case then you, as buyer of said note, would not be bona fide purchaser and you’d be subject to any legitimate defenses that debtor might have to pmt of the note…such as house is not as agreed, or house is on contaninated land, etc., etc.
And if the debtor were sued then raised tha defense you might never get paid on the note.
So I think I’d pass on this one.
Too many good RE investments to be buying into junk that’ll cause you trouble.