Indy asking for $60k promissory note, HELP

Hey all, finally got the Buyer on this deal to increase their purchase price to meet the minimum net requirement to the lender, however they are now asking the Seller to sign a $60k promissory note on top of this. Here is the exact wording:

"MI is requiring the seller contribute to the loss in the following way. Please note this has absolutely *nothing* to do with deficiency rights. ***Fannie does not and will not waive their deficiency rights.*** <-- no matter if the seller agrees to the MI terms or not. These are totally separate. 60K prom note at 0.00% interest at 250 per month for 240 months."

Check this link out and let me know if you have fought a promissory note with them yet:

https://www.youtube.com/watch?v=lWRfoTyf47o&feature=related


Thanks!!!

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Permalink Reply by Laura Marshall on June 8, 2010 at 4:51pm
I have had -0- luck with MI companies. I have had 2 with Radian and 1 with PMI. All 3 fell apart. The sellers were not willing to carry the note. The note values ranged from $60,000 - $72,000. The funny part is in each case, the note amount far exceeded what they had to pay the servicer'/investor after foreclosure. One of my clients had $1100 per month income (unemployment). They wanted them to carry a 0% interest note with payments of $700 per month. Hopefully someone in this forum can give us "good news" about how the MI company worked with them.
Permalink Reply by Jeff Payne on June 10, 2010 at 6:57am
OK, my answer is probably not the popular answer or the one that anyone wants to hear....
Not sure how much the mortgage amount or the loss is but with a 60K prom note it is probably quite high...
Mr Seller already signed a promissory note in the form of a mortgage and as always they are expected to pay it back. Now Mr Seller can not pay it back and has to do a short sale. He is trading his higher promissory note (original mortgage) for a smaller one that only costs $250 per month. Seems like a no brainer to me. Forget about Fannie and Freddie and their threats to seek a deficiency, that will just cost Fannie and Freddie more money that they do not have to TRY to get a deficiency paid. What is the alternative, let it foreclose and be certain that you will be hit with a deficiency judgement and all of the attorney fees that go along with it?
Permalink Reply by Darlene Krause on June 14, 2010 at 6:13am
It does have something to do with deficiency rights. First, if the MI company wants a 60K note, then it will be difficult for Fannie Mae to go after a deficiency judgment until the 60K note is paid on or they default on paying. The deficiency would have to be adjusted by the 60K and if the MI company is requiring it then Fannie would just have to wait. So in Florida, they have 5 years to file a deficiency judgment. A 60 k note might take a lot longer to pay off than 240 months.

Just a thought.

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