Rocklin Short Sales – Short Sale Promissory Note

Rocklin Short Sales – Short Sale Promissory Note

As a Short Sale Expert in Rocklin CA, I’m negotiating for my clients against big banks.  During the short sale negotiation, some banks will ask the seller to sign a promissory note in order for the bank to recoup some of their loss. 

Here is my advice regarding short sale promissory notes:

If you’re a Rocklin short sale seller with a 1st loan ONLY, don’t agree to a promissory note or cash contribution.  Your short sale agent should be willing and able to tell the bank NO WAY!  Here’s why:  Starting January 2011, the banks have no recourse on a 1st mortgage.  That means that if the short sale closes, they can not come after you for the short amount.  Also, if the home forecloses, they can not come after you for the short amount.  Both ways, they aren’t going to get any money so don’t volunteer to give them money in the form of a promissory note!  A short sale on a 1st mortgage is the best situation for both the bank, and a seller with hardship.

If you have a 2nd mortgage, and the bank wants you to sign a promissory note,  you should consider it.  If the bank insists on a promissory note in order to approve your Rocklin short sale, have your short sale agent negotiate the lowest amount possible.  Threaten to foreclose if the bank is not reasonable.  Remember, banks sometimes come after you for the short amount on a 2nd mortgage after a foreclosure so consider a compromise in order to avoid foreclosure and save your credit.

Asking for a promissory note or cash contribution is a step the bank often takes.  In my experience, it’s actually like a game of Cat & Mouse.  The bank doesn’t want to foreclose, yet they want to net as much as possible from the short sale.  Their initial offer is a bluff.  An experienced short sale agent knows the short sale game and how to win.  Less experienced agents don’t have the skill and are sometimes scared off by the bank’s requests.  Pick an experienced Rocklin short sale specialist to play for your team.

Rocklin Short Sales – Short Sale Promissory Note