buying a note

[flicker2]

What is the name of your state? MA
I am one of 4 guarantors on an SBA loan, my property and another's were collateralized for the note. The bank is calling the loan and foreclosing on my property only and the other partners won't communicate. If I buy the note from the foreclosing bank instead of paying it off will the note still be binding as it is now on the other parties and can I collect on the debt?
In particular will it still be a mortgage lien on the other property used for collateral.

Thanks

 

[HomeGuru]

What is the name of your state? MA
I am one of 4 guarantors on an SBA loan, my property and another's were collateralized for the note. The bank is calling the loan and foreclosing on my property only and the other partners won't communicate. If I buy the note from the foreclosing bank instead of paying it off will the note still be binding as it is now on the other parties and can I collect on the debt?
In particular will it still be a mortgage lien on the other property used for collateral.

Thanks

**A: without reviewing the actual note and lender's policies, can't tell.

 

[flicker2]

SBA loan?

MA
me again...
The lender told me it they do this all the time and that it will work but my lawyer said he had to do "research on it" because I might be 'paying it off'. I'm shakin' in my boots, I already spent 5K on that lawyer who truly hasn't gotten me much of anything except a pretty useless homestead and a fruitless 1 1/2 hour meeting w/ partners. I just don't know what to do.
Thanks again,

 

[seniorjudge]

Q: I just don't know what to do.

A: I would start with firing that lawyer.

 

[Tommy T]

Have you ever received a notice that your mortgage note has been sold to another lender? Happens all the time. This time, you have a chance to be the lender that buys a note.

You won't be "paying it off" if you purchase it from the lender (via an assignment), you will then become the noteholder, your cash would go towards purchasing the note, not paying it off. Buying the note won't change any terms of the note (BTW, did any of the borrowers have a first right of refusal in the event the note was sold?), and as the new noteholder, you will be able to take over and continue to pursue any and all remedies the previous noteholder had available as the terms of the note allow. Including foreclosing or seeking judgments against the slacker borrowers. As the new noteholder, you might elect to stop the foreclosure against your own property, though. : )

By the way, the lender would likely be happy to sell this note to a third party entity (not you personally as a borrower) at a discount. They prefer cash now, as foreclosing and owning real estate is not what they like to do, and causes them further problems and expense... as you can tell by their willingness to sell you the note. You personally could try to negotiate a purchase price for the principal amount only, good chance you'll get it.
For the lender, this is a "non-performing asset" on their books, and they do not like that. They'd prefer to get their cash back so they can lend it out to someone that will pay them every month.

So, would it be better to let the lender continue foreclosing on you, or to reposition yourself by buying the paper from the lender and proceeding from there?