Posted by David Alexander on July 11, 2007 at 11:49:33:
Convert it to a note and DOT
Can an Assignment secure a promissory note? - Posted by DavidGOR
Posted by DavidGOR on July 11, 2007 at 10:28:10:
I posted this on the Law and Financing Discussion forums but I wanted to post it here to see if anyone has experience with this…
I know of a family that has a Land Sale Contract on a house.
If I make a loan to them, can I secure the promissory note with an assignment of the Land Sale Contract? (I’d keep the assignment in escrow.)
Or is there a better way to secure a promissory note on someone that has a Land Sale Contract? (The note would be for $30,000 and their ‘equity’ is about $100,000)
-DavidGOR
Yes, but record all in deed records - Posted by John Merchant
Posted by John Merchant on July 11, 2007 at 14:37:14:
A REC contract can be assigned, IF under its terms it is assignable…which you can determine from reading the contract.
If it cannot be legally assigned then obtain a specific written consent for assignment (signed and notarized) from the Seller on the REC, then record the REC and your Assignment of same.
Make sure the original REC is recorded and if not, either make sure it IS recorded it…and if it’s note, then it’s not good security for your loan.
The Seller sometime doesn’t want a REC to be recorded as he can quicker rid himself of the non-payer by Contract Forfeiture action (at least here in WA State)and not concern himself with having to clear title when he sells it to somebody else.
Oh yes, and if you do get Assignment with consent of the REC seller, your document securing your loan is going to be Collateral Assignment which needs to be drafted by a lawyer.
Not a layman’s task.