Re: Conseco Finance - Posted by Tony-VA
Posted by Tony-VA on January 06, 2001 at 05:47:13:
I don’t care to go into all the details of Conseco but suffice it to say that they purchased a major mobile home lender and are quickly failing. Their lending practices have put them in great peril.
There are large numbers of newer and older repo homes that Conseco is having to contend with. You can obtain a list of wholesale and retail repo homes from them. It make take a few calls but you can get the monthly mailings.
On many of these homes, you simply fax in a bid. When buying repo’s from lenders, I suggest you consider a few things. First, check with the park manager to find out what the back lot rent situation. Many times, lenders will amount large lot rent deficits. You may or may not be able to negotiate with the park manager to forgive some of the money due. Yes, it is Conseco’s responsiblity to pay it, but if it is not paid, the park can make you pull the home. By knowing the lot rent deficit, you have a peak into the lenders motivation level. Outstanding balances on the defaulted loan are none of our affair. We make our money going into the deal by buying right. Their mistakes are their problems. They realize that they will have to cut their losses on these repos.
I find it better to play a strong offense. Talk with the park manager first. Get some background about the home. Find out how long it has been vacant. How long the lender has had possession. Has anyone else shown a strong interest in the home? Take a good look at the home and get an idea of the fix up costs.
Park managers may work out some back lot rent so as too keep the home in the park. Many of these repo’s are new, nicer homes. The park just wants to get the park lot rent performing again and will sometimes be willing to cut their losses.
Then I fax in a low ball bid. This is the only time that I name the numbers first and the only time I low ball. Since we are not dealing with Harry Homeowner, their is little emotion involved for the lenders. You will be surpised what they will sell these homes for at times. Fax in your bid and move on to the next deal. They may accept right away or wait till they get 3 bids.
Just keep in mind that dealing with lenders and homeowners you use two entirely different tactics. One responds to numbers, the other to emotion.
David Butler does an outstanding job of explaining the Conseco crisis and the ripples it has made through the lending community. I highly recommend his writing. He also hosts the paper forum here.