how to see if developer is making note payments

have your lawyer ask their lawyer?

If the note was securitized I have heard you can find its performance on a Bloomberg terminal. Cannot personally attest to the validity having not performed such a search myself.

GCondo- I have noticed that when asking questions like this (sensitive, and developers don't like it and can lie), it sets the wrong tone for negotiating. It sets off alarm bells and may hinder my ability (regardless if payment has been issued or not)to negotiate the deal.

dledven: I agree about prying for details, but your attorney might be able to get a general representation from the other side, such as, "As of August 31, 2009, the Sponsor was current in meeting all financial obligations to the condominium and any creditors."

west- thanks, just a little nervous, about coming out in the open. i was hoping there was another way to follow up on the info.

dledven, I was under the impression that this would be something you would check after you came to price agreement... maybe before signing or during attorney review, or the 7 day backout period w/e

G- I was thinking of using at as a tool to receive the lowest possible price. If knowing that a note is due or late, the bank may be willing to take less then the contract price between developer and bank because bank wants to be able receive some funds, and are willing to settle.

Well, you can look to see if there is a lis pendens filed yet.

Whether a loan is in default can be tough to find out. By your use of the word "developer" I assume that this is a new project, so there is probably a construction loan. Construction loans are really not securitized (can't really securitize future funding obligations) so it is unlikely to show up with the rating agencies as a defaulted loan. If the default has gotten to the point of there being a lis pendens, then that is a big red flag. Buying a condo where the bank is foreclosing is definately something that one would want to discuss with his/her atty. If the project has been completed for a while and there are still a lot of units to be sold, then there is a decent chance that the loan is either in default or heading there. Construction loans are underwritten based on a projection of steady sales. If not enough units are sold in a timely manner, then the loan does not get paid down as fast and the developer starts to burn through its interest and operating expense reserves. Regardless, it is unlikely that a potential buyer would be able to easily find this out for sure (but I would bet that the majority of completed condo projects in NYC that are not say 75% sold out are in trouble).

I agree, i don't believe that a lis pendens, (not enough time), i looked at the note payable and the first payment was due a couple of weeks ago with a second payment due in less then 2 months. I am going to assume that developer is waiting for closings so that he can make the first payment due, but the 2nd payment is the bigger payment and follows the first, which really means that the developer has to go into contract and try to schedule closings ASAP, because if developer misses both payments, i think bank will file. having said that, developer isn't at the 50% mark, so i am trying to really set a low price (maybe even one developer will have to ask permission from the bank) or maybe i'm dreaming? i don't know.......