Promissory Note - Signatures / Enforceability Question

[Blake Carlile]

Hello!  I'm a private lender and recently received a signed promissory note from the borrower that looks well and good (based my research of all things that should be in a note), but it doesn't have a signature line for me, the lender.  My full name is clearly written in the agreement, but would just signing anywhere at the bottom make the contract legally enforceable?  I trust these folks I'm lending to, but don't have access to an attorney to answer questions over the labor day weekend.  The plan is to wire funds on Tuesday and I just wanted to check with this community to gather thoughts on this.  Thank you!

[Jeff S.]

Quote from @Blake Carlile:

I'll clarify:  I'm a private lender in that I'm just an individual (not a business).  It's a simple interest loan secured by a deed of trust for a property in Kansas City.  I'm additionally insured, and the note has a personal guarantee clause.  

Call yourself what you wish, Blake. Individual or business, there’s really no legal definition of a private lender (or hard money lender for that matter). It’s a distinction that’s unfortunately promoted here, which causes some to skimp on origination and loan docs. In the eyes of the law, you’re simply a lender. Period. This has no bearing on whether your loan docs are bulletproof and enforceable or not. A judge won’t care.

“I'm additionally insured …”

If I read this literally, it’s exactly what you don’t want, Blake. Being additionally insured, which is an insurance term, does not provide the same protection as being listed as the “Mortgagee.” Mortgagor is the “one behind the door,” i.e. the borrower. That’s incorrect too.

Seriously, Blake, I’m not trying to be a jerk and parse your every word, but you really, really ought to have a lending attorney either review your loan docs (and now perhaps your insurance requirements) or have them prepare a set for you. The latter would be cheaper.

These will also include a very important set of Lender Instructions (not Escrow Instructions), which provide your direction to Escrow, Title, and the Closing attorney, as applicable. These define your specific directions about how you want your documents handled, signed, and recorded as well as any other requirements.  These are different from Escrow Instructions, which are between Escrow, the Buyer, and Seller.

See if your borrower can get an extension to give you some time.