Should clients sign a soft note on a purchase money ...

Submitted by caloyd from CA - 03/27/2009 - 8:32am

Should clients sign a soft note on a purchase money second to get there short sale approved or let the home foreclose?

You are not watching this post, click to start watching

Comments

Submitted by pat - 05/06/2010 - 2:39pm

I don't know. can someone advise?

Submitted by Michelle - 05/06/2010 - 3:22pm

It is going to depend on their specific situation. This is a very subjective question that only your client can really answer once they have examined all options. The short sale is really the ability to negotiate with the lender to accept a short pay amount and release the lien on the property. If the lender wants some contribution in the form of a note (usually there is low or no interest charged) and the homeowner gets out of a bad situation and can restart their lives then it may be worth it. Many people who have signed personal promissory notes have also gone back and renegotiated that debt since it is unsecured debt once the property is sold. Other contributing factors would be whether or not the loan is a recourse loan (purchase money) and whether or not this is a first or a second mortgage. Also what is the amount of the note they are requesting and is the homeowner considering BK?
Under todays underwriting guidelines someone that has a short sale will typically be able to qualify for a loan faster than if they go through a foreclosure.
We always suggest consulting with an attorney and a tax advisor and getting all of your questions answered before you agree to anything.

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

More information about formatting options

Before You Post

All comments should be relevant to the topic of the post and are subject to the terms found in our User Agreement.

Asking a Question

If you'd like to ask a new question, please start a new topic.

Please no SPAM.

We nofollow all links and promptly remove unsolicited advertisements - spamming here is a complete waste of your time, so don't bother. Vendors who actually answer questions and provide value to our forums may include links to their company or service as part of their signature.