bank wants home owner to sign promissory note

[Michael Soriano]

I received the following message from a Wells Fargo Negotiator regarding a short sale I am working on.

I received a reply from the MI company on this short sale request. They are requiring the seller sign a promissory note to approve the short sale. The terms would be as follows:

Amount of note - $75000

$416.66 OVER 180 MONTHS, 0% INTEREST

WE WILL NEED THE BORROWER(S) FUTURE MAILING

AND PHONE NUMBER(S) TO SET UP THE PROMISSORY NOTE IF THEY CHOOSE TO ACCEPT.

Please review with the seller and let me know. Thanks!

I let him know that she couldn't pay that much per month & that I would speak to her and see if she could pay around $200. Negotiator reply:

The MI company does not negotiate their requirements. If the borrower is unable or unwilling to sign the required promissory note, we will not be able to move forward with a short sale. Please advise

Does anyone have experience with negotiating these away. Can the home owner after signing the note then negotiate terms later on down the line.

[Ayo F.]

I have had negotiators tell me that my Homeowners should sign a promissory note in order for them to grant a short sale.

It's up to the homeowner is they want to remain in debt all their lives or if they want to fight.

If the house is sold, the the note becomes an unsecured debt. Hence, can easily be wiped out in a Chapter 7 as stated by Joel.

I have seen instances where a homeowner has got a letter from a BK attorney stating that they will qualify for a Chapter 13 and a 7. Then the bank came to the negotiating table.

Homeowners can win if they decide to fight but many decide to just let the banks have their way NOT knowing that they will get a deficiency judgement esp in states that allow it. At the end, they either have to short sale the judgement or file a chapter 7.

If the bank bank is willing to accept a short sale, it means they will make more than if they foreclose.

I always say that's not a problem, we will just file a chapter 7 and wipe the debt out. The last time I tried that, this bank came back and offered my client $5,000 move out incentive...It's all playing hard ball.....The homeowner will lose the home in any case but they don't go down without the bank bleeding tooo and they making something....it's all negotiations..... LOL