I purchased this non-performing second mortgage back in 2014 on a property in Sacramento, CA. At the time the property was valued at $270,000. Shortly after I purchased the mortgage, I hired a law firm (Trustee) that manages foreclosure cases. The Trustee sent out a legal demand letter. Since I didn't hear from the borrowers when the legal demand letter expired, I moved forward with the foreclosure process. We eventually set a sheriff sale on the property in early 2015. About a month prior to the foreclosure sale, the borrowers filed for Chapter 13 Bankruptcy (BK) protection. The borrowers had a 1st mortgage balance of $270,000, but there was no equity in the property covering my 2nd mortgage loan balance of $97,414. The 2nd mortgage unpaid principal balance was $97,414, plus they owed another $16,000 in past due interest, late fees & lender recoverable legal expenses (owed arrears). With a total payoff on the 2nd mortgage of $113,414. I filed my Bankruptcy Proof of Claim with the BK Court in the amount of $113,414. A proof of claim is a form submitted by a creditor in order to receive money from a debtor who has filed for Bankruptcy. The Proof of Claim document provides notice of the claim to all of the other relevant parties involved in the bankruptcy, including the court, the debtor, and any other creditors. Shortly after that, the borrowers filed to have a hearing on the Motion to Strip the Junior Lien (my 2nd Mortgage). I knew there was no equity in the property covering my 2nd mortgage, so I didn't contest it. I was going to be at the mercy of them completing their Chapter 13 BK Payment Plan, and if they did complete their Chapter 13 BK Payment Plan, the Motion to Strip the Junior Lien would be granted by the BK Courts wiping out my 2nd mortgage. Meaning the 2nd mortgage would be no longer valid, no good and uncollectable. If the borrowers didn't complete their Chapter 13 BK Payment Plan, and got dismissed from the Chapter 13 BK, my 2nd Mortgage would be valid again. So, since I didn't contest the Motion to Strip the Junior Lien, the BK Court allowed them to file their Motion to Strip the Junior Lien. The borrower's Chapter 13 BK Payment Plan was a 60 month payment plan. My Junior Lien became an unsecured debt in the Chapter 13 BK Payment Plan. As an unsecured creditor, my Junior Lien was the highest balance debt owed.

Anyone hve success finding seller financed notes?

As I mentioned in a previous post, I just purchased two reperforming 2nd mortgage notes. That's my weekly business win. Personal win, my daughter was invited to the University of South Florida’s Financial Accounting Banquet and received recognition of her academic success. My why!!!! Curious to hear about your weekly wins?

I purchased my first non-performing second-position HELOC in May 2024 through Fixnotes.com.The property is a SFR located in Luzerne County, Pennsylvania. There are two borrowers — a married couple working as handymen. Considering their trade, it was surprising that they couldn’t keep up with such a small loan. When I bought the note, the first mortgage was already in foreclosure by PNC Bank, so I initially assumed the process would take care of itself.The first lien payoff was about $30k, my second lien UPB was roughly $3,6k, and the BPO came in around $100k, showing strong equity in the property. To confirm, I hired someone through Craigslist to take exterior photos — the house looked well maintained, freshly painted, and clearly occupied. The Twist In August 2025, just days before the scheduled sheriff’s sale, the borrowers reinstated their first mortgage.The foreclosure auction was canceled, and suddenly I realized that the statute of limitations for my HELOC would expire in November 2025 — leaving me very little time to act. I started contacting attorneys licensed in Pennsylvania who would handle a small-balance second lien foreclosure.Out of roughly 20 inquiries, only one firm responded — LOGS Legal Group LLP, represented by Samantha Gable (and later by Heather Riloff). After weeks of document review and back-and-forth emails, they agreed to represent my company. Challenges and Lessons English is not my first language, and my accent makes phone conversations difficult — people often misunderstand me.That made direct communication with the borrowers or their attorney nearly impossible.I even tried hiring a Service companies, but they required full servicing rights to the note, which made no sense financially for such a small UPB. In September 2025, I paid the retainer, and the firm started preparing demand letters and (as I think) pre-foreclosure notices. However, instead of filing for foreclosure — which was the only realistic way to preserve my rights before the November 4, 2025 statute of limitations deadline — Attorney Heather Riloff proposed proceeding as a “debt collection” or “breach of contract” action under the promissory note.

Hi all, so I have never bought notes directly from a bank or credit union. I have been doing some networking and next week I have a meeting at a local CU about buying their NPLs. They expect me to tell her how them work. LOL. If any of y'all have bought directly from banks and/or CUs before, I'm all ears! @Robert Hytha, is there any training around this in the Classroom section or on YouTube?