Robert Lee of Foreclosure Trackers suggests that the purchase of discounted notes can help foreclosure victims. Lee and his partner David Phelps founded Foreclosure Trackers. Where politicians and bankers have failed, the duo has found solutions to the various challenges they are faced with. They are turning the dismal situation into an opportunity.
The purchase of defaulted mortgages at a reduced discount will enable many owners to continue to stay in the houses that are their homes. His company purchases the loans but not the houses. After having done so, they work out a viable positive solution with the foreclosure victims but do not kick them out.
Areas with the highest number of foreclosures will continue to grow unless the federal government takes the drastic step of a comprehensive bail out. Thus, the key to getting the market back on its feet may be the purchasing of discounted notes. Lee has nothing to do with conducting bus tours for potential buyers to view foreclosed houses because his firm is buying mortgage notes and not houses at bank auctions.
Initially, it seemed like a great idea to buy foreclosed homes that are going for dirt-cheap but the lack of equity is something to mull over. It makes these deals highly risky as well and, if the prices continue to drop, (in all likelihood it will) then it will be disaster to have bought these houses. It will set off another set of troubles.
Valuing approximately $3.5 trillion in mortgage equity, these houses has been wiped off since the spring of 2006. Foreclosures have reached record heights since the Great Depression of the thirties. Unless the government enables a massive writing down of these losses, the economy will not be able to move from the current position it is in.
Lee has been dealing with foreclosures and defaulted mortgages for nearly twelve years. That was the time when the boom was gearing for take off. Lee conducts free seminars to potential investors about the pros and cons of purchasing mortgages.
For instance, if he chances upon a property attached with a mortgage of $750,00 he will calculate with his broker’s mind and come to the decision that it is worth $510,000, according to the current market rate. He then offers $255,00 for the mortgage note. If it is accepted, he will come to own the mortgage. Next, if he tells the owner, the principal will be sliced down to $408,000 on the understanding that the original borrower is able to refinance with another lender within a stipulated time of 60 days.