Discount on Mortgage Payoff

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  • Has anyone had luck with negotiating a discount for paying off a mortgage at a big bank like Wells Fargo?

    As a thought experiment, I just tried and got nowhere, but wondered if I just didn’t say the magic words to enough people in the hierarchy. None of the employees know anything about the time value of money. 🙂

    Otherwise, has anyone walked a mortgage to another property on a loan like that?

    HI Bill

    I have been successful at getting a substantial discount from Wells Fargo (and other big name banks) BUT only when it was a short sale situation with the loan in default.

    Usually the bank only services the loan but the note is actually held by a hedge fund on wall street somewhere. So, a discount has to go up the ladder to get approved. If the loan is in default, ask to speak with their loss mitigation department.

    Here’s the number to call —

    If the loan is not in default, I think you’ll have a hard time getting a discount unless you can show that the value of the property has dropped a lot compared to the mortgage balance.

    With short sales, they send out their own appraiser to evaluate the condition of the property. And the seller/borrower has to prove a hard ship on why they could not make their payments. To make it even more complicated, the seller cannot get more than $1000 in cash for moving expenses ( the bank does not want to take a hit with the defaulted seller gaining a windfall profit).

    I doubt that you can get anyone to agree to walk the mortgage on an institutional loan.

    Let us know how it goes.

    It’s a non-starter. I had actually thought they owned the loan, but I believe they are just the servicer.

    It was a “fun” conversation, though.

    For what it’s worth, this advice lifted from Jimmy Napier, but I’ve heard of the technique from a variety of sources. Jimmy’s original advice involved a Savings & Loan which seems more negotiable than someone like Wells Fargo or any big institution.

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