Visit our page on Estate Planning for more information on that topic. A trust deed is always used together with a promissory note (also called “prom note”) that sets out the amount and terms of the loan.
A promissory note without a mortgage is unsecured, which means you have legal obligation to repay a loan, but no property to secure that obligation.
A promissory note can become invalid if it excludes A) the total sum of money the borrower owes the lender (aka the amount of the note) or B) the number of payments due and the date each increment is due.
It just says the lender can take the property should the homeowner fail to pay. Mortgages are filed in the courthouse as public record, and anyone listed on the deed must be listed on the mortgage. But that person doesn't have to be the same person listed on the note as the party responsible for the debt.
The Note is signed by the people who agree to pay the debt (the people that will be making the mortgage payments). The Deed and the Deed of Trust are signed by those who will own the property that is being mortgaged.
Can a person's name be on a deed without being on the mortgage? Yes, it is entirely possible for a person's name to be on the deed without being on the mortgage.
A promissory note could become invalid if: It isn't signed by both parties. The note violates laws. One party tries to change the terms of the agreement without notifying the other party.
In some circumstances, however, a promissory note is fraudulent and a promissory note scam is operated in order to improperly obtain investor funds. Promissory note fraud is a crime and those involved in a scam can face a lengthy prison sentence if convicted of fraud offenses.
Promissory notes are quite simple and can be prepared by anyone. They do not need to be prepared by a lawyer or be notarized. It isn't even particularly significant whether a promissory note is handwritten or typed and printed.
An unsecured promissory note is an obligation for payment without any property securing the payment. If the payor fails to pay, the payee must file a lawsuit and hope that the payor has sufficient assets that can be seized to satisfy the loan.
They are very similar, but a mortgage involves only the lender and a borrower, while a deed of trust adds a neutral third party known as a trustee. The trustee holds rights to the real estate until the loan is paid or the borrower defaults.
In California, the deed of trust is used in connection with a promissory note. A promissory note sets the terms of the loan and specifies the amount due. Under Code of Civil Procedure section 2936, a deed of trust must come with security. (CCP 2936) In most cases, this security is the promissory note.
The short answer is that you do. Your name will go on the title and the deed of the house. Your home serves as collateral on the loan, but you own it for most intents and purposes.
If a signature on the promissory note is forged or obtained without proper permission, the note may be invalidated. All involved parties must be legally able to make the agreement, and signatures must be genuine.
Demand for payment: The lender can demand that the borrower immediately repay the outstanding balance according to the terms of the promissory note. Legal action: The lender may choose to take legal action against the borrower to recover the outstanding balance, often by filing a lawsuit for breach of contract.
Answer and Explanation: The correct option is c: The incorrect statement is a promissory note is not a negotiable instrument. A promissory note is a promise made by the maker of the note to pay to the payee on a specific date or when demanded by the payee. These instruments are transferred and used as cash.
The promissory note focuses on the borrower's commitment to repay the lender. The deed of trust is an overarching document that specifies what happens if the borrower doesn't live up to that promise (i.e., defaults on the loan).
Changes Made without a New Agreement
Modifying a promissory note without all parties' consent can void the note. Proper documentation and agreement through a new contract or amendment are necessary to maintain the note's validity.
The note must clearly mention only the promise of making the repayment and no other conditions. After issuance, a Promissory Note must be stamped according to the regulations of the Indian Stamp Act.
If solely in the deceased spouse's name
The surviving spouse can often assume the mortgage, but this process may involve credit checks and lender approval. If the surviving spouse cannot assume the mortgage, other options must be explored to prevent foreclosure.
In other words, if your name is on the deed, you are tenants-by-the-entireties, and if one of you dies, the other owns the property entirely. If you are not on the mortgage for whatever reason, you are not liable for paying the mortgage loan. That said, you get your spouse's interest in the property if they die.
You can take legal action against them for breaching the agreement you both made or seek a court order to force the sale of the property. It's important to consult with a lawyer to understand your legal rights and options and to make the best decisions for your situation.