Can you use a promissory note at a foreclosure proceedings

[Quiche Lynn]

My friend is going through foreclosure. Can you go through the process with submitting an affidavit of your mortgage by also supplying a promissory note? 

Can this help the homeowner? 
or do you need someone to buy the note before submission? 

I am curious about any process other than bankruptcy 

[Chris Seveney]

@Quiche Lynn

If a home is in foreclosure the options are to work something out with the lender, pay them the amount that is past due or file bankruptcy

How they get the money to pay the lender what is owed can be from any source, but unless that lender is brought current or has some type of arrangement they typically do not stop foreclosure

[Wayne Brooks]

@Quiche Lynn  not sure what “process” you’re trying to do or what an “affidavit of your mtg” means. Highly unlikely anyone would be able to buy that particular note, and if they could, it wouldn’t necessarily be at a discount.

[Quiche Lynn]

Quote from @Wayne Brooks:

@Quiche Lynn  not sure what “process” you’re trying to do or what an “affidavit of your mtg” means. Highly unlikely anyone would be able to buy that particular note, and if they could, it wouldn’t necessarily be at a discount.

My friend is sending an affidavit with a note stating how her note got behind and her situation. She want to settle in a proper manner 
Without the drama of a foreclosure. She wanted to send the note as a settlement. 
but I read someone need to buy the note. If she can’t submit the note. Is there other any other options?

[Chris Seveney]

@Quiche Lynn

I think your confusing the term note

The note is a promissory note - meaning the document that she signed stating she will pay this person this much money.

What it sounds like is she wants to send a settlement offer to try and renegotiate the deal?

[Jay Hinrichs]

Quote from @Quiche Lynn:

Quote from @Wayne Brooks:

@Quiche Lynn  not sure what “process” you’re trying to do or what an “affidavit of your mtg” means. Highly unlikely anyone would be able to buy that particular note, and if they could, it wouldn’t necessarily be at a discount.

My friend is sending an affidavit with a note stating how her note got behind and her situation. She want to settle in a proper manner 
Without the drama of a foreclosure. She wanted to send the note as a settlement. 
but I read someone need to buy the note. If she can’t submit the note. Is there other any other options?

if this is an owner occupied property and the loan was used by the owner to buy the property to live in.. then they are by federal law able to request a 3rd party mediator to meet with them and a representative from the bank and try to work out a re pay plan

the issue is many in foreclosure never follow up on this and basically waive their right to this meeting. that would be step number one get into the federally mandated mediation if the owner and the property qualify.

[Quiche Lynn]

Thank you ☺️ 

[Jeff S.]

Wow. Your question is confusing, @Quiche Lynn. I think you stumped the crowd.

My take is that your friend is trying to walk away from the property by handing over the keys and avoid a foreclosure. Yes? This is called a Deed in Lieu Foreclosure or Deed in Lieu (DIL).

As an option to avoid a long drawn-out foreclosure process (more painful for the lender than the borrower), your friend might be able to negotiate a deal with her lender to accept the property and wipe the slate clean. Sort of.

When a lender agrees to a DIL, they will own the property subject to all other loans, liens, possible lawsuits, and taxes due. If the property is a disaster, well, too bad. Tenants? They get to evict them. No surprise, but most lenders won’t touch a DIL.

On the other hand, some lenders also flip houses or hold properties, so if the home is in good shape with equity or the potential to drive equity, they could be interested in owning it. Despite what you might read on this board though, it’s a rare lender that wants the property.

One of the many disadvantages to agreeing to a DIL is that your friend will have to pay taxes on any amount that the lender forgives over $600. Plus, like a foreclosure, DILs get reported on her credit report, though I understand they get treated less severely.

The basic requirement of a DIL is that it has to be 100% completely voluntary. A wise lender won’t even mention it unless your friend suggests it first. Have her write a letter to her lender suggesting it. If all the stars line up, they might agree. She should read up first though, since a deed in lieu might not be in her best interest.