Purchase Date: 14 JUN 17
Payoff Date: 26 MAR 18
Closing of Books: 14 APR 18
Note Cost: $14,000
Note Value: $43,000
Total Workout: $1,507.41
In 2017, we bought a score of notes in Genesee County. Why? Because of job growth and the repair of the water infrastructure. One of the notes was on Dearborn. We got a very good price for this note because we made some very persuasive arguments on the true value of the property.
Over time, we managed to get the borrower to semi perform. In the last couple of months, she became a great borrower because she purchased insurance from State Farm and got current on her debt. The most amazing action on her part was that she got current after her house caught on fire. She didn't notify us, nor did the insurance company.
Once we found out, we refunded her most recent payment and told her that we wouldn't be charging her any interest or fees for not paying while we sorted everything out with the insurance company. She had hired a 3rd party adjuster who we started talking with. Within two weeks, the adjuster and the insurance company settled on a claim figure. The borrower wanted to pay off the loan. We were willing to settle for a lower price to get cashed out, so we settled on $35,000.
Why did we settle for an $8,000 discount? For one, we made some serious money already. She had already made about $3,600 in payments. She needed money to rehab her property and our payoff wasn't part of the total budget. If we didn't settle, we'd be in charge of the rehab draws since we were the bank. It's not something we want to do.
It didn't work out like we planned when we bought this note, but it did work out. With her payments and the insurance settlement, we made $23,103 in profit in a 10 month period.
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