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Promissory notes

Posted by Jeff Payne on September 29, 2009 at 8:05am in Short Sale Discussions
Question about promissory notes..... What happens if a seller signs a promisorry note for the PMI company and the seller never makes a payment? What can the PMI company come after them for? The full amount of the original mortgage or just the promissory note. We have a FNMA loan with Litton Loan servicing and FNMA wants a $24,000 promissory note paid back at 100 per month. The seller can swing it. I am just curious about what would happen if the seller signed it and then never paid it? NOTE: I AM IN NO WAY ADVOCATING FOR THIS TO HAPPEN, JUST CURIOUS IF ANYONE KNOWS WHAT WOULD HAPPEN

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Replies

  • Jeff Payne September 29, 2009 at 10:57am
    Great minds think alike :)
  • Bryant Tutas September 29, 2009 at 10:53am
    Far better. They may also be able to negotiate the note after the fact too. Make a few payments then offer a cash deal.
  • Jeff Payne September 29, 2009 at 10:48am
    Thanks Bryant, I would think that having an unsecured note would be much better than a mortgage in case of default..
  • Bryant Tutas September 29, 2009 at 10:45am
    Jeff, The remedies for default should be outlined in the note. It's an unsecured loan so not much they can do but send it off to a collection agency and report it to the credit bureaus.
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