Posted by John Merchant on January 21, 2005 at 21:55:40:
John’s right, and the WA Supreme Court held that such a new note with simultaneous sale of the note to the note buyer was in effect, and under WA law, a usurious and illegal LOAN!
The court ruled the note buyer was in effect a usurious lender and as such had to pay the borrower’s attorney fees, court costs and was NOT ablt to recoup its loan money.
AN UGLY DEAL!
And as John says, a smart note buyer won’t ever pay 90% on any note, and is going to use his money at much higher returns than that.
Creating a Note and Getting it Sold - Posted by Derek Whitner
Posted by Derek Whitner on January 14, 2005 at 13:47:22:
I need to create a note on a property that I own outright that appraises for 100K. I took title of this property in my LLC. I now wish to Cash out of this property and hate dealing with banks. Who can structure this note for me so I can recieve 90-95% of value. I plan on moving into the property later this year. I have credit scores in the 700’s. Any advice or should I just use a traditional bank. I hate banks.
Re: Creating a Note and Getting it Sold - Posted by John (OR)
Posted by John (OR) on January 15, 2005 at 16:00:04:
You want a high LTV and most note buyers will not go that high. The
risk is not worth it. Unless you can offer some other security you will
have a problem with a traditional note buyer. At least that is my view
as a note buyer.
Moving in later is not a good sign. You are effectively asking a note
buyer to be a direct lender to a consumer. This brings extra
requirements that most private lenders want to avoid. Hence they will
many times not consider OO loans unless they are buying a pre-
existing note that was created by a sale.