Is it legal for a lender to make you sign a promissory note?

fernanda · Joined: 16 Jul 2007 Posts: 3 2.32 Dollars($)

Subject to the approval of a deed in lieu my mortgage lender is requesting that I sign a pormissory note of substantial amount to be repaid in 72 months because "they' re having a big loss".
Is there anything I can do to avoid signing another loan?
If I don't sign they will cancel the request for deed in lieu and go for foreclosure.

miller_st · Joined: 17 Jan 2007 Posts: 917 168.82 Dollars($)

Fernanda, with deed in lieu of foreclosure lender agrees to take the property in return to whatever balance is left on the mortgage. How could be ask you to sign a promissory note to accept a dil?

You can complain to the department of banking in your state about it. Have they provided any written document which states this?

Consult any foreclosure prevention counseling agency working in your area to talk with your lender about acceptance of the dil without any conditions to be fulfilled. Such an agency will try to convince your lender to accept the house in return for the balance left on the mortgage.

And don't sign on any promissory note.

Miller

blue · Posted: Mon Jul 16, 2007 2:39 pm Post subject:

Hi Fernanda,

Welcome to Mortgagefit discussion board.

fernanda · Joined: 16 Jul 2007 Posts: 3 2.32 Dollars($)

They have sent me the Deed in Lieu of Foreclosure agreement, which references the Promissory Note, from their lawyer for me to sign and the Unsecured Promissory Note for me to sign as well.

I also received a letter stating that the Deed in Lieu has been approved subjects to terms and conditions.... and one of the conditions is acceptance of the promissory note.

I then sent them an overnight letter stating that I could not bind to another loan, and they told me that we have had discussed the issue on the phone and that if I wasn't accepting to sign they would cancel my request for a deed in lieu without further notice to me. Confused

Thank you for your advises, will do.

Niicss · Joined: 03 Oct 2005 Posts: 1047 156.15 Dollars($)

As Miller said you should talk with counseling agency about this. They will try to convince your lender to agree to a dil.

If you tell me which state you are in then I can provide you with the agencies working in your state.

You have to decide if you would be able to make payments on this new loan or not. If you are not in a position to afford it then you do not have many options left but to accept foreclosure.

fernanda · Joined: 16 Jul 2007 Posts: 3 2.32 Dollars($)

Florida.

Thanks

Samantha

Hi Fernanda,

Welcome to the forum.

I haven't heard of a lender asking a borrower to sign on a different promissory note just to pay a certain amount of money even after the deed in lieu. What generally happens, is after a borrower has gone for deed-in-lieu, the lender may seek a deficiency judgment on the part of the unpaid balance. And, if approved by the court, the borrower will have to pay for the deficiency. But you are in different situation completely. I mean if you're unable to pay, the lender would go for a foreclosure and you'll lose your home. Your credit will also be ruined.

However, I don't think there's any other way out. But let me tell you something – it's not a loan that you're going for. This is because you aren't taking out any more money nor are you paying the interest. You are in fact, promising to pay a certain amount in return of the lender accepting a deed-in-lieu.

Hope this helps...

God bless you.

Samantha

Niicss · Joined: 03 Oct 2005 Posts: 1047 156.15 Dollars($)

This is the list of HUD Approved Housing Counseling Agencies working in Florida which can provide you help and guidance regarding avoiding foreclosure. And can discuss your situation with the lender to try out plans by which some payment option can be accepted instead of foreclosure - http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&se archstate=fl

All times are GMT - 7 Hours

Page 1 of 1