What is your experience so far with short sale where 1 lender is involved and PMI? Did the PMI company ask the seller to sign a promissory note?

Asked by Edyta Gryc, Naperville, IL Wed Oct 13, 2010

Have you been able to close such a short sale without owner being obliged to sign a promissory note for the difference owned? Thank you for all your tips and suggestions.

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Bob Galivan, Agent, South Miami, FL
Wed Oct 13, 2010
PMI company will usually want a promissory note, OR an upfront cash contribution. Recent situation was the owner had to either come up with $5k cash OR sign a 20 year, $50k promissory note.
If the note is the option taken, this can possibly relieved by bankruptcy, according to an attorney I work with.
Web Reference:  http://www.myriamsHomes.com
1 vote
Steven Epste…, Agent, Coral Gables, FL
Wed Oct 13, 2010
Lenders & PMI cos can do anyting they like & feel that they can negotiate. It's the "Golden Rule" ... they have the gold & they make the rules. So it always takes a willing, realistic seller & a willing, relaisitc buyer to close any deal.
1 vote
Debra B Albe…, Agent, Port St Lucie, FL
Wed Oct 13, 2010
Yes they can and I do not understand it, however, I have had the MI request a 40,000 note that effectively stipped the sale after the bank approved. I also had an MI at the 12th hour...I mean that the buyer is at the closing table and the MI sent a new HUD DEMANDING that each real estate company involved...buyer and seller companies, give up $1,000 each of the commission or they would not close. It felf like the "Old West" being held up at the closing table.

I do not like MI companies, as I am sure you could tell.

Debbie Albert
Web Reference:  http://www.ronanddebbie.net
1 vote
Don Kelbick, , Miami, FL
Wed Oct 13, 2010
I have had it both ways. It depends on the bank, insurer, investor and the financial condition of the seller. I have seen sales approved with the bank asking the seller for the entire deficiency..

Most recently, the bank asked for either $3000 cash or a $10,000 promisarry note with no interest. The seller said "No," my buyer said she was not going to be responsible for the seller and that would be a deal breaker. The bank dropped its request and we closed.

Some other interesting recent trends, beside the seller contribution, banks no longer paying any association fees, banks not paying any attorney fees. It is not getting any easier.
Web Reference:  http://www.DKRealtor.com
1 vote
Wed Oct 13, 2010
I was working on a BofA deal, where after literally a year of review the file, they finally sent it to the MI company that came back with a promisory note of 45K and wouldn't budge. We had to let this case go.
Hope you have better luck!

Andrew and Elena Ollick
Amerivest Realty
Latest Post: Foreclosure Halt creates Problems
1 vote
Miguel Soria, Agent, Miami, FL
Wed Oct 13, 2010
I have made lots of short sale and no promissory notes has been signed. If they send a promissory note at closing may not be a problem to deny it and ask the title company to reproduce a new HUD without the PN. However I suggest to have that negotiate before going to closing table.
It's all in the hands of good short sale negotiator upon your side.
There are lots of people offering short sales for low price. Who cares about the price if the bank agrees to pay the S.Sale negotiator let them go and problem resolved.
In my cases negotiator get approved to collect in between 1500.00 dls to 3500.00 dls but they work for your seller.
And this is going on with 4 big bad lenders..talking BofA, JP Morgan, WFargo, GMac, Pnc, Hsbc ...you name it.
No PN at all, no deficiency at all. Maybe 1099. But see IRS form 982
Miguel Soria
RE/MAX Advance Realty
1 vote
Dominick Mar…, Agent, MIAMI, FL
Wed Oct 13, 2010
The lender may not pursue a dificiency judgment , but typically yes the MI company will ask for a promissory note
1 vote
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