Profiting From The Economic Collapse: Kondaur Capital

 

foreclosure sale

I originally found out about Kondaur Capital  when I read this article about how Wall Street is planning on creating securities of delinquent mortgages to sell to investors.  It made me curious about the company and so I did some digging around and what I found out isn’t pretty.

Kondaur  is a debt collector who specializes in purchasing delinquent mortgages on residential property.  There is apparently a market for “bad paper” because servicers and lenders are overwhelmed with delinquent mortgages right now. Some are willing to sell off some of the notes they hold for a few for pennies on the dollar in order to get them off their books.

Like any debt buyer, Kondaur hopes to recover more than it has paid to purchase the paper.  It does this by aggressively approaching homeowners and demanding that they essentially give up their home for a little cash, or face foreclosure. While Kondaur’s CEO, Jon Daurio, claims that his firm works with borrowers, what he really means is putting pressure on them  to get out so Kondaur can list the home quickly and sell it off.  Since it has bought the underlying mortgage for a fraction of the face value of note,  the market value of the home will  almost always be higher and it will profit on the sale.

Interestingly, Mr. Daurio is a former Ameriquest Mortgage executive. Ameriquest was one of the more egregious “subprime” lenders, roping people into mortgages it knew they could never afford.  Now he wants to profit off the backs of the very same people he fleeced while he was with Ameriquest.

Kondaur is no white knight, as it seeks to classify itself in press releases like this one and this one. A Wells Fargo customer was going through the modification process had his loan sold to Kondaur in the middle of the process. He had this to say: (emphasis mine)

I went 8 months through the modification process with WF in court. When I was coming to the finish line, having provided all documentation including financials they sold my note and servicing to Kondaur Capital just before my modification was to be setup. Kondaur Capital will not do modifications they say my only option is foreclosure. They keep pushing a "fresh start" to me and my wife. Now they want pictures of the inside of my house. Why? What the hells wrong with this. I don’t see anyway out of this mess for this country. Is there any class action suit that I can join?

Other complaints about Kondaur:

Posted by sly, ohio on 2009-3-13 7:8:25

This company is very agressive, before I knew what was going on, I was sold to them by National City, just days after I received the paperwork about the servicing I immediately received calls from one of the reps, and all of them appears to be threatening in some form, and also very agressive, while I was 30 days behind om my Mortgage, all he talked about was Foreclosing, and taking my home from me, a lot of double talk, and kept me from sleeping, At the end of this year, I hope to be able to leave this company and go back to a reputible lender. My falt put me in the business with this company and I want out. a lot of promises over the phone and double talk, just like a strait out collector> i feel sorry for anyone who has to deal with these people.

 

Posted by personal, TX on 2009-4-12 18:40:31

If Kondaur bought your note, they will foreclose if you don’t short sale FAST!!! They don’t negotiate. Loss Mitigation is your right but it won’t come easy with them.

Tony Linton, a Real Estate broker who works with Kondaur describes its business model: (Emphasis mine.)

OK, here’s the deal with Kondaur, think "reverse short sale". Kondaur buys the bad paper, and they open communication with the owners and map out a plan, plan "A" is a Deed in Lieu of foreclosure and much like REO they will do CFK to vacate the property and this is what they push for, it is there business model. How it is reverse is, now the bank and the agent are approaching the owner for short sale, not the owner and the agent trying to sell the bank on a short sale. Plan "B" is simply foreclosure, they do not want this.

Now since Kondaur is the 1st lien holder they have already determined the price so this is not an issue, they also do not expect a promissory note for any balance due like most lenders which is very attractive to the seller/owner.

Now…agent responsibility….When you are contacted to do the free BPO you are actually part of the "Due Diligence". Here’s how it unfolds…..I’ll give good numbers for the 1st deal I worked with them, keep in mind they buy bulk paper. They started with 2500 loans, which means 2500 BPO’s. they decide which properties they want, this number was approx 2200 of the 2500 original. They determine per property what to offer as a group…with me so far? The Due diligence period is usually 4-6 months, in that time some properties sell, some foreclose and some are saved from foreclosure and settled by the original lender. In this example they ended up with close to 1800 out of the original 2500. That means 700 agents will not get a property.

Now when you receive word that Kondaur has purchased the paper and it is assigned to you, you handle it very similar to an REO property; you approach the homeowner and work out CFK. Re-key, clean out ect… The difference is that you still must view as a short sale because you will still sign a listing agreement with the homeowner and you actively get involved in negotiations of 2nd mortgages, liens and unpaid taxes and so on. The good news is that Kondaur does want this to close as fast as a normal or REO sale and will pay out of closing to clear title. Also they do not charge a referral fee, so you are looking at the straight 3%

From its own website, Kondaur will buy loans with origination fraud and regulatory violations! It wants the crap loans; those loans that if the besieged homeowners had the resources to properly fight them in court, could possibly get the loan dismissed outright.

If your note was purchased by Kondaur, do not allow them to pressure you. Kondaur’s number one goal is to get you out of your home as quickly and as cheaply as possible.  Kondaur representatives will likely refuse to discuss any other option with you but a “Cash for Keys” scenario. 

Despite this, you still have rights and you still own your house until it is sold at a foreclosure sale.  Truth in Lending and RESPA regulations require that you be notified when your loan is sold or transferred. If you did not receive such a notice, you can file a complaint with the FTC.  You can also file for bankruptcy to delay the foreclosure and bargain for more time to negotiate a the best “Cash for Keys” deal you can get out of them. Make them work for it and make them pay you for it.

In addition, there are organizations that will provide you with help if you want to stay in your home or you need assistance to make them “sweat” a little before getting as much cash out of them as possible:

NACA : A non profit group which is also a certified HUD counseling agency. They can help you to negotiate a loan modification.  All NACA services are free.

YouWalkAway : This company provides assistance to help you stay in your home for as long as possible. They do charge a fee.

Low Cost Legal Assistance : A national directory to help you find an attorney in your area to represent you for little to no cost.

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4 Responses to “Profiting From The Economic Collapse: Kondaur Capital”

  1. […] wrote about the debt buyer, Kondaur Capital, back in May. Remember those guys, the company that’s […]

  2. Kathy says:

    I have been reading the articles on Kondaur Capital and they describe my situation with Kondaur Capital. My husband has cancer and we have been trying to get Kondaur Capital to modifiy our loan. They have been dragging their feet stating that we do not qualify for a modication because our income to debt ratio is off. We have no other payments other than the mortgage payment now and we bring in $4,000 a month.

    They purchased our loan from Select Portfolio Services who was going to modify our loan but now it seems hopeless. My husband has cancer and we still have three children at home.

    Has anyone started a class action suit against Kondaur Capital?

  3. The government has been trying to keep housing prices artificially inflated.

  4. Mykels says:

    I have been in the middle of a Kondaur full frontal assault for a year now and all of these scenarios read the same, I am coming to the defense of my friend and his 6 year old son. Fighting on behalf of them, I have paid for the filing of responses to the complaints and notices that pour in from Kondaurs legal team, which I question, they file a “Substitution of Trustee” usually with a law firm as it goes to sale, they do this as a means to, from what I can figure, sell the property to themselves, giving them the means to skirt laws or create a smoke screen of some sort, confusing the homeowners, refer to a case out of Florida, Stern v Florida State Bar, Google, Anyway, I have met the REO Agents they send out with hollow promises like: cash for keys and or threats of a “Lockout Order” if the homeowners do not bow to the wishes of Kondaur, one of the reps actually told my friend that if he didn’t except their offers they would just give the money to the Marshalls to evict them from the property and put their belongings in the street…not kidding the agent showed up in front of the property in a fairly new Porsche 911, what a complete dick to show up like that to a man who is being threatened with the loss of his home, which BTW has been in his family for years and the only home his son knows, he is a true single father and has no help, he goes to work and takes care of his son everyday…
    I am finding many problems with these tactics of Kondaur and I am looking to gather everyone’s thoughts, perhaps file in federal court a class action suit to stop them from their pursuits, I am calling on everyone who has issue with Kondaur to write me so that I may educate myself to how many people have been pushed out of their homes without due process or with any real standing on these notes they purchased from banks with what they considered bad debt, I am under the impression that the banks are using foreclosure mills such as Kondaur Capital to literally drive people to the streets. I am not a attorney, I am someone who has been closely related to the mortgage and real estate business and know what they do to borrowers, owners, buyers and alike to get their money at any cost, even if it is illegal or borderline ethical, they do not care and I want to see about doing something about it and numbers speak volumes… I am not seeking fees or anything of the sort I am seeking information and if necessary I have the means to file and support such an aggressive move, David fought Goliath and was victorious, if all of the David’s come together as one voice then what a front we could mass…
    If you want to tell me your story I would like to read it I have set up an email for anyone who has a stressful and unpleasant experience with Kondaur…
    Let’s not forget that a Kondaur is a Vulture.
    Email: kondaurisstealingmyhome@gmail.com

    Look forward to hearing from all of you…

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