http://kevinandfred.com/power-hour/brian-gubernick/
Kevin, Fred, and and the INFALLIBLE Brian Gubernick speak about Promissory Notes. To check out our friends at Think Big, Work Small, CLICK HERE!
http://kevinandfred.com/power-hour/brian-gubernick/
Kevin, Fred, and and the INFALLIBLE Brian Gubernick speak about Promissory Notes. To check out our friends at Think Big, Work Small, CLICK HERE!
A short sale leaves a client better of than either a payment or a prom note in almost every instance. You need to put your client in the best situation possible when an ideal one is not possible, even if it is though servicer stupidity.
The only time I set upa client to have cash at close or to be ready for a Promissory note, is when it is obviously a strategic default and the bank can come back at them anyway (HELOC). We’ve only had one client close with a promissory note and that’s because they had tried a loan mod and the bank already had financials showing $10K in income and only $4k in expenses.
Love the ‘IDEA’ of negotiating the promissory note and the $$ at Close monies close to 0… or even to 0 for people that can’t afford it, but in some cases, they are really really strong options. Now, let’s be clear, I agree with negotiating them down or away, but ARE WE AWARE of the benefits of $ at closing, and promissory notes?
1st – deficiency – if they pay a $$ fee or promissory note at closing, even unsecured, they may possibly replace the existing note and deed of trust with the $$ settlement, and/ or new promise note…it could potentially be part of a strong argument against a potential deficiency in the future. Please very with an empowered real estate attorney.
2nd – tax benefits – if you replace a $200k debt with an $5k promissory note, it’s a strong likelihood that you would then not be forced to have a 1099 from the bank. This could be a really really strong tax strategy, although I recommend you talk with http://kingmanwinslow.com – really really strong tax accountants here in the valley!
Just a couple of thoughts… and Outback considerations!
I have a deal with Saxon Home Mortgage. Saxon is not asking for any cash at close, however, do you have any comment on MGIC (PMI company) asking for a contribution…. How do you get them to get out of the picture? On what authority are they demanding seller contribution?
They would rather have a foreclosure than get this short sale done…
Keep the Faith…
I’m seeing promissory notes requested by Freddie regularly. I’ve had sellers refuse and the bank cancels the short sale.
Painful.