PROMISSORY NOTES AND SHORT SALES| CHICAGO SHORT SALES| PRUDENTIAL RUBLOFF| PRUDENTIAL RUBLOFF SHORT SALES
Promissory Notes is todays Chicago Short Sales Post Topic! The Chicago Short Sales market has seen a few trends pop up over the last few years. One of them being the increase in the amount of promissory notes being requested by PMI companies and Lenders. This basically means that alot more home sellers are not walking away scott free after a short sale any more. A promissory note is a writeen promise to pay back a loan or debt.
With the increasing amount of Chicago Short Sales and Foreclosure properties, its not a complete shock that PMI companies and Lenders are asking the borrowers to sign Promissory notes to pay back a certain amount of money. In many instances, promissory notes are for reasonable amounts, can be paid back over a number of years (usually 5-10 yrs) and are unsecured loans.
It is important to let a seller know that it is getting more and more difficult for homeowners to walk away completely free with short sales now, especially if PMI is involved. The PMI companies are notorious when it comes to asking for Promissory Notes. The reason PMI companies ask for Promissory notes is that there is no risk to them in asking. The PMI companies will have to pay a clain regardless if you short sale or foreclose! it would be ideal to walk away completely free from your short sale, but signing a promissory could be a much better option than a foreclosure.
My personal take on Promissory notes is this. If you had to short sell your home and the lender took a $100,ooo loss on the property don't be surprised if a lender/pmi company agree to want you to sign a promissory note to help recoup some of their losses. In many cases the promissory notes are very reasonable and signing a promissory note is a much better alternative to a foreclosure in most instances.! Yes there are instances where PMI companies and Lenders ask for a ridiculous amount of money for a Promissory Note (these are the promissory notes that are getting all the bad press)
We recently closed on a chicago short sale property for one of your clients. The lender agreed to the short sale and incurred a $90,000 loss. The PMI company wanted our client to sign a $8000 promissory note to be paid over 6 years at NO INTEREST. My client happily signed the note and was able to get on with her life!
If you do agree to a promissory note, there is one very important aspect to consider. If you default on the promissory note, then your credit could be affected as much as if you actually foreclosed!
Senior Broker--Chicago Short Sales Expert- Certified Short Sales Expert
PRUDENTIAL RUBLOFF SHORT SALES
Office 312 264 1176
Cell 630 327 9136