Monday Real Estate Market Myth: Promissory Note for a Short Sale

Myth: A seller has to pay a promissory note for an approved short sale.

True and False:  A promissory note is a written promise to pay a fixed amount of funds, and an agreement may pay back some funds in order to avoid foreclosure.  Every mortgage transaction is different, and no one can say if a lender will or will not ask a borrower to pay back a certain sum of money.  However if a lender adds a promissory note to the short sale approval and the borrower does not want to pay it, then the foreclsoure process will continue.  The borrower could counter the lender with a different amount, but the lender has the option to deny the short sale completely or change terms again.

Make sure a seller speaks to a real estate attorney and Certified Public Accountant prior to agreeing to the short sale approval letter.  The lending industry has very specific verbiage about repayment or canceled debt, and sometimes there may be taxes on the forgiven debt. Rules and regulations differ from state to state as well as household to household.

For more information and to find a reputable lender contact local real estate agent Kristen Jurevich at 831.635.6719 in the Hollister, San Juan, Aromas, Gilroy, Salinas, Monterey, or surrounding areas.

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