Posted by Rick, the Probate Guy on August 18, 2009 at 23:40:33:
When you say that you have a borrower, are you saying that you own the note or that the borrower is a client/customer of yours?
Please re-post on the cashflow board and clarify that part. I’m sure that you’ll get better responses. It sounds like you read a Behle or Morrongiello article (both guys post on that board, too).
Restructuring Balloon Payment Now Due - Posted by Jean Baptiste
Posted by Jean Baptiste on August 18, 2009 at 15:50:00:
I have a borrower who is unable to refinance a balloon payment that has become due. I read in one of the trade publication, during my research for a possible solution to this situation, that the note can be restructured by creating a new note and deed of trust which can then be sold to raise the money to pay off the old loan.
According to the article the new note could be structured as follows:
-Drop the interest rate
-Leave the payment the same
-Increase the PV
-Keep the same balloon
-Extend the term to whatever the borrower wants.
I am having problems understanding the note ownership structure? How can an investor restructure a note he doesn’t own? How is the situation as stated different from a loan?
What am I missing? Any help from the experts would be greatly appreciated.
Thanks.
JB