staci86 said:EvilCapitalist said:Banks are not selling these for pennies on a dollar. The best recent deals that I have seen were around 48c on a dollar.
No one, i repeat, absolutely no one should be paying "service" fee to participate in a deal like this because to do a deal like that you will -still- have to pay money ( attorneys and accountants ).
Banks are selling these for pennies on the dollar.


No they are not. Please do not spread this fun/crock/rubbish. The best -ever- deal that was done in these was a sale from ML to Lonestar(?) a year ago and change. It was a VERY complex deal where Lonestar had the maximum exposure of 6c on a dollar. The securities in question were super smelly ubber nasty stinky shit of 2006 vintage. That vintage by now is done. Deal required Lonestar to put up 6c on a dollar with ML investing the rest of the money for sale at over 20c on a dollar.


The only problem is that they're completely underwater, and behind a first mortgage already in foreclosure and with a greater balance than what the property is worth.

The only way to make these notes pay is if the deadbeat can be fraudulently refinanced into a new mortgage after the credit has been scrubbed and the appraisal boosted, or if the deadbeat can be talked into having a family member bail them out.

Sorry, this is not how it works outside the classroom.

I like the way they picked 289%, instead of giving a potential range of return. For some reason people perceive numbers that aren't rounded as much more authoritative. Lots of people will pay more attention to the weatherman that notes a 68% chance of rain over the weatherman who says the chance is 70% based on nothing other than the number used.

Oh, another reason for the precise return rate is because this is being marketed to people that are used to 'investing' in bank CDs. I guess I think that alone tells me something.

EvilCapitalist said:
No they are not. Please do not spread this fun/crock/rubbish. The best -ever- deal that was done in these was a sale from ML to Lonestar(?) a year ago and change. It was a VERY complex deal where Lonestar had the maximum exposure of 6c on a dollar. The securities in question were super smelly ubber nasty stinky shit of 2006 vintage. That vintage by now is done. Deal required Lonestar to put up 6c on a dollar with ML investing the rest of the money for sale at over 20c on a dollar.

They are in circulation, but we may be splitting definitions. My boss showed me a proposal from some fund out of a midwestern state holding a pool of them. That company was looking for lenders to refi the people out of the firsts and the seconds together. He decided to have nothing to do with it because these people were giving off extremely bad vibrations about what had to be done to get the borrowers refinanced. He suspected these people were trolling for lenders willing to play fast and loose with the rules with no prodding from the current holder.

This batch of HELs were several years old and were exclusively FL, CA, and NV.

I may have misspoke. I do not know that the bank sold that garbage for pennies on the dollar, only that the loans had been acquired by a fund for pennies on the dollar. Someone else could have taken the loss in between.

EvilCapitalist said:
Sorry, this is not how it works outside the classroom.
You're going to have to explain that, because it is precisely what people have tried to do with these.

The real trashy seconds were either CO at the peak or behind an 80% PM first at the peak. Declining values have left these loans with zero security.

As the OP shows, people are trying to get these things refinanced, but it can't be done legitimately on almost all of them.

staci86 said:EvilCapitalist said:
No they are not. Please do not spread this fun/crock/rubbish. The best -ever- deal that was done in these was a sale from ML to Lonestar(?) a year ago and change. It was a VERY complex deal where Lonestar had the maximum exposure of 6c on a dollar. The securities in question were super smelly ubber nasty stinky shit of 2006 vintage. That vintage by now is done. Deal required Lonestar to put up 6c on a dollar with ML investing the rest of the money for sale at over 20c on a dollar.

They are in circulation, but we may be splitting definitions. My boss showed me a proposal from some fund out of a midwestern state holding a pool of them. That company was looking for lenders to refi the people out of the firsts and the seconds together. He decided to have nothing to do with it because these people were giving off extremely bad vibrations about what had to be done to get the borrowers refinanced. He suspected these people were trolling for lenders willing to play fast and loose with the rules with no prodding from the current holder.

This batch of HELs were several years old and were exclusively FL, CA, and NV.

I may have misspoke. I do not know that the bank sold that garbage for pennies on the dollar, only that the loans had been acquired by a fund for pennies on the dollar. Someone else could have taken the loss in between.



OK, if that's what you are talking about I'm withdrawing my comments. My impression was that the idea was to aquire some of the instruments based on the set of mortgage notes for pennies on a dollar and either sit on them allowing a large pecentage of them to default but recovering tons of money from the remaining ones -or- after acquiring entire set the instruments for pennies on a dollar cut the deals with the homeowner to change the terms of the loans to make a very large number of them performing (i.e. make the current holder eat the loss)

EvilCapitalist said:Sorry, this is not how it works outside the classroom.
You're going to have to explain that, because it is precisely what people have tried to do with these.
The issue is that the loans were not securitized individually so the portion of the same loan was held by too many different parties. Until the loan is re-assembled, there's no way for the holder of the security or the homeowner to negotiate with each other.

blok said:Where did they come up with 289%, Im pretty sure they just made up a number

290% is too much. 298% was too little. 298% was JUST right!

skip the 289%....and move on to the "unsecured" point

you need to understand what "unsecured" debt is. basically, it is debt with no collateral backing.

let's say a person wants to make widgets. they need the capital to both make AND market the widgets.

the widget maker is $1 million. the capital needed for marketing and G&A = $1 million.

The company would probably get a secured note that is backed by the widget maker (widget maker = tangible equipment which can be re-sold). They'd probably get an unsecured note for the marketing/G&A needs.

So, on day 1 they are $2 million in the hole. after 6 months, they have zero cash flow and have burned through their $1 million marketing/G&A money. They file chapter 11.

In the bankruptcy proceedings, the court finds a buyer for the widget maker ($800,000). The $800,000 goes to the owner of the secured note (getting back $.80 per $1.00 loaned). The money left over (read: $0) goes to the holder of the unsecured $1 million note. So, they get $.00 for each $1.00 loaned.

buying unsecured debt is about as good as lighting money on fire.

I'm glad this thread is here.

I miss the updates about Agape, especially in the days when people were still defending the scam.

iLoveTahoe said:Xnarg, that's your worst avatar yet! I was just about to eat dinner, but now....What, how dare you speak against Hugo Chavez, one of the Glorious Leaders of The People?

Xnarg said:iLoveTahoe said:Xnarg, that's your worst avatar yet! I was just about to eat dinner, but now....What, how dare you speak against Hugo Chavez, one of the Glorious Leaders of The People?

WTF Xnarg? I made the Honduran Presidente as my avatar last week and you had to copy my idea >.<

tripleB said:blok said:Where did they come up with 289%, Im pretty sure they just made up a number

290% is too much. 298% was too little. 298% was JUST right!
289 makes sense, it's 17 squared.
Apparently the math is sound ;P