In this live group call, Chris Prefontaine leads a discussion with Avi, Matthew, Rusty, and others about a distressed mortgage case. The participants review the loan’s current status, including $31,000 in arrears, a $314,000 mortgage balance, a $2,400 trial workout payment, and a negative $10,000 escrow balance. They examine ownership issues—whether the girlfriend is on the deed and mortgage—highlighting the importance of deed vs. loan holder in divorce or split‑up scenarios. Chris advises immediate contact with the lender to clarify the trial workout’s length, how the arrears will be handled (e.g., rolled into the back end), and to secure permission or power of attorney to speak on behalf of the borrowers. The team debates whether to bring an investor (needed only if the arrears must be paid in full) versus relying on the workout plan. Matthew raises the possibility of loan recasting, but the group notes the current 3.6% rate and limited principal paydown make recasting unlikely to yield savings. The call concludes with clear “marching orders”: obtain deed ownership details, confirm trial workout terms with the bank, secure POA, and decide on investor involvement.
Chapters
3 or 4 deals to look at, like, between last night at 10 and this morning, and like all the high 6 calls today. Like, bring the damn deal. That's what we're here for.
I have a question. I have a deal that I'm working on. I sent you just a few minutes before the call. I put it in Slack. Let me find this.
Yeah, you guys, while Avi's doing that today— and again, I'm not— it's not this group even. I'm looking at everybody on it. But I got like 3 or 4, rest are united, 3 or 4 deals to look at, like between last night at 10 and this morning. And like all the High 6 calls today, like, bring the damn deal. That's what we're here for. So I'm gonna keep answering back in Slack saying, bring it. Unless it's like, oh, Chris, I need this help, like before the weekend or something.
Fine.
But certainly not the night before a High 6 call. That's crazy.
Mm-hmm.
We just can't get to it.
Wait, hang on. Here's my— okay, here's the deal sheet. And I also, I do have the mortgage statement which she sent me.
Let's go to the lead sheet first. I see the 3 things. That's cool.
Okay.
Uh, can you make that— can we view it?
What's that?
Can we view the lead sheet?
Is that— I sharing it? Is that not— are you not able to see? You're sharing only the vid.
Yeah. The folder's there.
Okay.
I see mortgage statement, mortgage statement main, and image.
All right. That's not working well. Let me open.
Come on, Rook.
Rook.
Yeah.
What can I tell you? Because it's opened up in my—
I got it. I got it.
Yeah. If you can, because it's not opening up as a PDF on my end.
All you do is open on your screen and then share it. You got it?
Did it was on my screen, but I don't know why I couldn't get it going.
You guys see it now?
Yes.
Okay. Yes. So we got that expired.
Cool.
How long was it on for?
I don't. I don't know. Okay. So in the rears there.
Okay. So expireds, guys, you always want to find out how long. Okay. Again, just piece of information because that's more pain. They're in arrears how much?
Uh, $31,000, almost $32,000.
Oh, wow. Okay.
Yeah, got it. Now on the mortgage statement, it does seem that they were offering them a— some kind of workout, uh, with a, you know, so the mortgage payment is supposed to be $2,578. They're offering them some kind of workout At about $2,400 and change a month, but it was due August 1st.
The first payment on the workout?
Yeah. And it does look like there was some partial payment that was sent in in July, but like $60 short of that amount. That if you— let me see what you're sharing. But I sent the mortgage statement as well.
I can look. I can call it up. So maybe before I put this down and pull That up. $314 owed. That does not count or does count the $32?
It does not count the $32.
So, Avi, right above that, it says, may I ask how much you owe? And it says $230,000.
And then you have $314,000 as a mortgage.
Yeah.
Oh, because they told me $230,000. And when I got the actual number, I only corrected it in the existing mortgage information. Thank you. Okay.
So it's $314,000. Okay. All right, uh, so they're only $100 grand off.
Yeah.
All right, uh, the girlfriend is not on the deed, correct?
She, um, she is on— she's on the mortgage, so she's probably on the deed. What's that?
You know if she's on the deed?
I don't know for sure.
Okay, see, 2 very critical things, you guys. This is about what we're talking about, diving deeper. Whenever there's a split-up or a divorce, immediately what comes to mind for me is who's on the deed, who's on the mortgage. And are you in agreement?
Okay, so they're not in agreement. That I know. Number 3 is the— I've only been talking to the girlfriend. There's a realtor involved. The realtor is connected to the guy, to this, um, Rodley, uh, but he apparently— Rodley's just throwing up his hands. He doesn't care. So I do, I do think that the realtor has enough sway on him that We got— the girlfriend seems to be on board with doing whatever we want to try to save it. Um, and I think the realtor can convince Rodney to go along.
Okay, so there's equity here. Aside from you needing to get some more info before we even pull the mortgage statement up, is this a deal that, uh, you want to pull in an investor for and you want to do this, or where's your head on that before I call the mortgage statement? I'm just generally speaking.
Okay, so I would— if, if we can get them to, to just be doing the payment plan that's been worked out, then I would not want to need an investor. If we, um, if we do have to pay off the entire arrears, then yes, I would want an investor.
Okay, so either way you want to pursue it, that's where I was going.
Yeah.
Okay, so let me stop sharing. Let me call the mortgage statement up. That'll be importante so we understand what you're saying with that. Whoa, can I make this bigger? Yep, I can.
Sweet.
All right, hold on one second. Share. Can you guys see it?
Yep. Yes.
Yep.
All right.
Interest-bearing principal.
No.
Yes. Lender paid overdue payments. Partial payment. Reinstatement amount due. Trial workout payment. Okay, so Bobby, anyone can fire in questions here, but my question would be trial workout payment amount. You have to find out, get who's on this loan. They're both on this.
Both on it. Yeah.
So you gotta get on the phone with the bank, like, ASAP, in my opinion, and they give you permission to talk to them. And you gotta dig into this a little bit. Is this trial 6 months and then they roll that $31,000 into the back end? Like, what— how do they perceive this working? Unless you already know.
I don't know yet.
So you got to find out that. And you also have a negative $10,000 escrow. So I would get on, I'd have this in front of me, and I'd get on with the bank and just, you know, as a realtor, just drill a little bit. Like, okay, I see a $2,400. In theory, if they— my— I'm here to help my friends. If in theory my friends can make that payment, what happens? The next 6 months, like, and let the bank tell you what's going on.
Okay.
Unless, again, unless I'm not tracking, if someone else has a comment yet, that's where I would do next. You guys with me?
I have a quick question as a Canadian on the call here, um, for my own benefit. What does it mean when there's an escrow balance that is negative?
Uh, there was hypothetically a tax or something went up and They're behind in the payments. So even if it didn't go up, they're making payments on behalf of the borrower, and the borrower's behind. So the escrow account's screwed up. It's behind.
That's true, because your lenders, they pay taxes and insurance, right? Most of the time.
Not always, but this looks like escrow amount for tax and insurance. Yep. And this one, it's both.
Okay. I understand. Thank you.
So, you know, a few months worth of payments and that gets asked backwards. So, Avi, unless Rusty or any other members have a comment, that's where I would go next and then come back.
Okay. Sounds good.
Rusty, thoughts or you think we're there? Yeah, no.
Yeah, we're good.
Okay.
We—
so we need to know who's on the deed and then how this bank crap works here. Hypothetically, hypothetically, you— if Claudia is the only one on the deed, you can't bout with Claudia. He doesn't have to sign off, right? Okay. If they're both on the deed, highly likely they are because the bank probably made them, right?
Yep.
Then you got to deal with them both.
What?
And then how long is the trial, right? And then does it go back up to the $2,500?
When does that end?
Yeah. And then where does the 31 go if the trial works good? Like, and what determines that? Okay. Point, Ivy. If that trial, you can do 6 months. Say, look, these are my friends. If I can help them, tell me what happens. So, so if you make it for 6 months and that I'm making this, this, this, this thing up, if you made it for 6 months and the bank then says, okay, now the 32 goes on the back end. With no interest. Okay. We just closed a payday 3 that had a 65 grand back end that just sat there, no payments, no interest from bank workout. Now we paid it off at payday 3. We had it, right? But the whole time the tenant bought it, it's the house you did with us. That's what happened there.
Okay. All right. Cool, cool.
Now I'm a million percent sure you guys have questions. I'll take a breath. What do we have for questions? On this besides what Matthew asked. Good question. Nothing. Everybody, what is this? I actually, I actually had, I had some questions. So when it says trial, my head immediately went to like it was a trial, like a trial where you have a plaintiff and a— No, no, no. I think it's like a— I don't think so. I think it's a trial to do a loan mod. Like a test, work it out.
Yeah. All right.
So how's that gonna look if the first payment of that workout was due on August 1st? Well, not good. It's because now they have 2 due. That's why I'm saying get on the phone now, Avi. Yeah. And be like, you got to tell them why. You got to tell the buyer and seller too. Look, I— this is— you got to bring me in as a friend here. And then you say to the bank, I'm trying to help them, but I need to understand if it's going to be worth my while. Like, be honest with them. And then they hear you saying that, the buyer and seller— I mean, the sellers. So it's true. Like, you're going to see if it's worth your while.
Okay. And realistically, I'm only going to get her on the phone to speak to the bank.
I would think she can get permission as a guarantor.
As one of them. Yeah.
Try it. Okay.
Yep.
Can also tell them you own a real estate company, like throw some credibility at it. But you— but they shouldn't give a rat's ass. If you have power of attorney or them giving you permission, you should be able to talk to them.
Right. Well, at least initially on the phone, I'll just have her on the phone to give me permission, but then we'll have to get it signed up. Power of attorney, right?
Yeah. The second— yeah, for the future. The second you find out that, let us know because it sounds like— I hope you're not too late for them, for their sake, but let's see what they do.
Right. Okay, good.
Thank you.
I can see how it's almost impossible to do that deal without doing it live with you, right? So it's always good to bring them to these calls. Yeah, go ahead, Matthew. Sorry.
Um, depending on the structure, is there, uh, would it make sense to look into recasting that loan? Like, you know, if you catch them up, can they recast it? And then, like, I don't know, Abby, have you done, like, rental comps in terms of what the, the payday structure would look like? So I figure if you're already talking to the bank, if talking to the bank is part of the deal to begin with, would they be open to recasting?
I'd be concerned about that because their interest rate right now is 3.6%, and if they recast, they would probably close to double that.
I guess they change the interest rate when you recast. Good to know. Okay.
I think every bank's different, but I don't see them not doing that in this case. The recast too is if there's a lot of paydown already. What did this loan get taken out at? Matthew brings up a good valid point, Avi. Like, if this loan got taken out hypothetically at, I don't know, high 3s, then there may be a lower payment to be had.
It was taken out on the low— it's not far below the original principal balance.
So it's not going to be much gain there even if they did keep the rate. Okay. So good point, Matthew, to double-check it. But it sounds like we don't have any wiggle room there, even if they keep the rate. All right. Good show, Avi. You got your marching orders, right?
