Deal of the Week
Back in Black
This week, Chris wanted to bring a little rock ‘n’ roll into the “Deal of The Week” (aging himself in the process).
🎸 Calling this one “Back in Black” (inspiration derived from borrower’s name, thus no photo of subject property) based on one of his favorite bands growing up – AC/DC… so the rest of us will apologize for all the AC/DC references.
🤘🏽 So, let’s get to the numbers. This loan was acquired in October 2022 for $40,500. The borrower owed approximately $69,000 on this loan and was ten months behind. Things were looking a “Whole Lotta Rosie” as the borrower was making payments from October through May. The borrower then stopped paying, but before we commenced with legal we gave it one more “Shot in the Dark” with the borrower before commencing with foreclosure.
😱 We were able to get in touch with the borrower and discover what went wrong. The borrower had the payments on ACH but the ACH feature on their account was turned off, so the borrower was actually unaware that payments were not being made as they had not checked the mail statements or their online (this happens a lot more often than you think).
🚀 The borrower, finally realizing this, agreed that “Money Talks” and instantly paid $6,500 (payments from June – October). We also agreed to a Trial Payment Plan with the borrower where they will make $1300/mo payments for the next twelve months.
🥳 Upon a successful completion of said Trial Payment Plan, we offered to modify the loan with the borrower and roll the accrued interest into the loan balance to avoid late fees. This is a win-win for both parties as the increased balance assists us when we liquidate the loan and the loan being current will assist the borrower with her credit while also allowing her to avoid penalties via late fees.
🤝🏼 So in our first year, the borrower has paid approximately $8,500 (20% of investment). Our plan is to hold this for another year, collect the $1300/mo payments, then modify the loan and sell it as a reperforming loan to enhance the funds returns.