I’ve seen stories of individuals buying up a bunch of debt for cents on the dollar then just forgiving it. Why can’t this been done on an individual scale?
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There have been other good answers. This answer covers some territory they did not (so far).
First, to buy a loan, you have to come up with the cash for it, even if the total amount is discounted against the current value of the loan. If you could do that you wouldn’t be in a loan delinquincy situation.
There is a possible alternative in certain circumstances. If your loan is with a major commercial lender such as a bank or large mortgage company, this probably won’t work. They are very bureauocratically streamlined about their loans and usually can’t make independent decisions about them.
But. If it is with a small local bank or even a private lender, there are private businesses that buy loans and are experienced at negotiating with original lenders.
Because they do get the loan at a discount they are likely to be willing to re-negotiate the whole thing. This can be especially helpful if the loan has already been paid down to some extent. They want a steady cash flow, so failures to make payments will result in quick foreclosure.
You can try internet searching but some don’t have websites because they are small and don’t need them. Many work by word of mouth. Many are family-run, or run by a very small group. Ask around local real estate investors if you know where to find any. Look for REIA and REIC meetings that may have loan buyers at their meetings. “REIA” = Real Estate Investors Association, “REIC” = Real Estate Investors Club.
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