Questions about NOTE - Posted by Mary-VA

Posted by Jeff M on February 10, 2002 at 07:48:14:

Mary:
I am no expert, but I read part 1 as simply saying that if you are in arrears with your interest payments on the loan, and then attempt to prepay, the lender will apply the prepayment FIRST to the interest arrears, and then to principle reduction. Part 2 I have no idea of. Part 3 is, I believe, a “due on sale” clause, which means that if you sell the property, the lender has the right to demand immediate payment of the ful amount of the loan. There may be places where this is illegal, and “Applicable Law” would prevent it, but I don’t know of such places. Part 4 I have no idea. Good luck!

Jeff

Questions about NOTE - Posted by Mary-VA

Posted by Mary-VA on February 09, 2002 at 17:03:40:

Having nothing better to do this afternoon, I decided to actally read the NOTE I received after my last refinance and I have some questions.

  1. The NOTE says I can make full or partial prepayments without paying a prepayment charge but then says,

“However, the Note Holder may apply my Prepayment to the accrued and unpaid interest on the Prepayment amount, before applying my Prepayment to reduce the Pincipal…”

Huh?

  1. NOTE says I waive rights of Presentment & Notice of Dishonor, (these I understand) but what does I “waive the benefit of the homestead exemption” mean?

  2. NOTE says, “If all or any part of the Property or any interest in it is sold or transferred…without Lender’s prior writen consent, Lender may require immediate payment in full of all sums secured…However this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law.”

Are there any Applicable Laws that prohibit this exercise?
State? Federal?

  1. Finally, What is an “ALLONGE” to Note?

Thank you for this wonderful Website!

Re: Questions about NOTE - Posted by William Bronchick

Posted by William Bronchick on February 10, 2002 at 10:24:05:

Homestead protection prevents a creditor from forcing the sale of your home. Every lender requires that you waives this homestead as to THEM. I believe Jeff answered the rest.