January 12, 2009
Dear Seller-Financed Note Holder,
Whoo boy! What a crazy market, huh? Property values are down, delinquencies and defaults are up, and your 401Ks and IRAs tanked big-time in 2008. Now you're trying to squeeze out some liquidity by selling your real estate note.
When you entered the voting booth last November, you elected a bunch of attorneys and lifetime politicians to determine your economic and financial fate. What were you thinking? Thatís like giving me a scalpel and asking me to remove a brain tumor; Iíll give it a go, but donít expect a pretty outcome.
For starters, we have all these poor homeowners who got upside-down on their mortgages. In fact, your borrower may just be one of them. These unlucky individuals bought at the peak of the market, and it just isnít fair that they would potentially have to pay more than what the durn homes are worth today, is it? Of course it isnít. So, hereís what weíre gonna do:
Those nice politicians in Washington are giving me some SERIOUS power. Once all these poor, over-leveraged homeowners file for bankruptcy protection, I ride in on my white horse and save their collective bacon. Is it fair? Well, for them it is. Oh, you mean for you? Weíre not talking about you, are we?
Back to that power I mentioned earlier. See that gavel right there? It might as well be a wand. With one wave I can make changes to a petitionerís mortgage debt (interest rate, balance, term, whatever I want) commensurate with what he tells me he can afford to pay and what his property is now worth. This could potentially cut thousands (or tens of thousands, or HUNDREDS of thousands, should my heart desire) off the balance owed. Iíll cram that decision right down your collective throats! Bwah ha haÖoh, the POWER!!!
Yes, I understand your borrower signed a promissory note that outlines how much he owes you. That's just a legal document...I'M THE LAW. What I say goes, and I say he owes you a lot less. Bet you didn't realize that unlike any other investment on the face of the planet, your borrower had every right to infer price appreciation when he bought your property. In fact, the government will essentially guarantee he won't lose money on the deal. Well, yes...you will, but why do you keep bringing this back to you?
Well, Iíd love to keep debating this with you, but Iíve got a full docket of downtrodden petitioners to relocate from Skid Row to Easy Street. Iím sure youíll be fineÖbesides, won't you just get the warm fuzzies all over knowing you helped out a fellow citizen in need?
All my best,
Your Friendly (and ALL POWERFUL) Bankruptcy Judge
This letter is obviously satirical in nature, although the consequences of currently proposed legislation could be cause for serious concern for you, the noteholder. If passed (and it most likely will be), the value of your note in the secondary market will be severely impacted. If investors know the borrower's debt could be modified sharply downward, they simply won't take the chance of buying the note in the first place. If you are in need of cash in the near term (one year or less), I urge you to contact us at 866-762-1415 to give you some options.
Our efforts stay focused on note holders. If you are a note finder, a note
broker, or anyone other than the actual note holder, please do not contact