ING Steps Up & NFCU Waives Promissory Note

This post is a follow up to my recent one (which you can view here) regarding a short sale with active military personnel.  Another military couple in a new transaction were forced to sell their home due to NFCU’s (Navy Federal Credit Union) refusal to help them keep their home.  NFCU then forced them to accept a Promissory Note when selling their home.

Navy Federal Credit Union logoING Bank, who held the first loan, did not require any money from the seller–after I demanded that the seller would provide no contribution. This references the new California Law, SB 458, which allows the lender to collect for closing costs to the transaction only from the seller. However, this is still a gray area and only an agent who has the necessary experience to negotiate with banks, like myself, is obviously worth more than his weight in gold to anyone who may need to sell (paticulary those with assets to protect).  Those agents experienced enough in this area will make sure that the seller or buyer will not be required to make any contributions. 

The buyer, who was also being forced to contribute in the same transaction to the second loan with Chase, was also permitted to not contribute because of my negotiating ability. Even the buyer’s agent, having seen my emails to the lien holder, confided that he couldn’t believe how much I was able to do on behalf of the buyer. 

The commission was reduced drastically as a result of my negotiations, but more importantly, the banks were able to save money by me negotiation an above-fair market price on the property.  My hope is that more people will realize that I do my utmost to keep buyers’ and sellers’ interests (and assets!) above my own–and if they believe that, that they spread the word that I strive to be the best of the best.

This new short sale with NFCU had a requirement: that to be considered for the short sale, the seller would be required to take back a promissory note (which in this case was $30K after the seller took out over $80K cash when the market was booming). A seller, in this sort of case, by letting their property go to foreclosure, may create a battle for a settlement on that second loan of over $80K, due to there being no equity in the second loan and the first loan being the foreclosing entity.  In cases such as these, a short sale becomes the best alternative to avoiding hiring an attorney to settle this.

On this transaction, this promissory note was approved prior to the passing of SB 458 (which allows no contributions from the seller to the loan that would pay it down, reflecting a deficiency judgment). My persistent communication with this lien holder resulted in a complete forgiveness of the total debt–saving the seller $30K!

Without a properly experienced agent working in the best interests of the seller and buyer, this would have spelled disaster.  Even with working with some of the more experienced agents out there.

For the Best of the Best to represent you–whether selling or buying–call me at (619) 890-3648.  Thank you for reading!

2 thoughts on “ING Steps Up & NFCU Waives Promissory Note

  1. john Urban

    John

    I had a difficult time getting a shortsale of my Condo. I lost three buyers before I was able to get Navy Federal to agree back in July 2010. Orig. bought for 405K in 2005 and Sold for 283K . BofA waived the 325k on the 1st but the remaining 69K on the 2nd was with NFCU . I refinanced with them in 2006 when the my original 80 k HELOC rate was increasing. I only refinanced to lock in a non variable interest rate. I did not take a loan out for more than my Loan. NFCU would only agree to the Shortsale if I agreed to a 26K Promissory Note. At the time it seemed to be my Best Option given that I would have to foreclose if they did not accept. THe payment terms required I pay $141.00 /Month no interest. THis seemed ideal so I agreed. WHat I didi not realize is that NFCU reports to the 3 credit bureaus that I still owe 69k until I pay off the entire 26K in the promissory note. I have been searching for a loophole . NFCU denies receiving any bailout $ . They say they are looking out for the interest of their members which I was until they dumped me because I was high risk. Is there anything out there that might assist me . Is thee a way to prevent them from reporting I still owe 69K? It seems unethical when I actually owe jst the Promissory note. Is there any hope for a bailout? It seems my decision to refinance using them was a very big mistake. Consider if I just accepted the foreclosure I would not have had to pay almost $300 or double the minimum payment /month. and in the same time (7 years ) my credit would be clean again. I’d appreciate any suggestions. Currently I have 19 years of service and I am looking to leave the service and use my VA loan for a home in PA.

    Reply
    1. John A Silva Post author

      John

      Thank you for your question and comment. At the time you did your short sale, your loan became a recourse loan(lender legally able to go after you)when you refinanced as the laws allowed. Because of all the problems this created there was a change after you sold. You have an unfortunate situation regarding your 2nd TD in that you were forced to sign that promissory note without proper legal counceling and there may be a chance that you can get that note forgiven for this reason or based on language of the promissory note and including making it retroactive to the SB 458 Bill that was passed for 2nd TD’s in a short sale on July 15, 2011 because it was within a year of your closing. This California bill paved the way for short sales of Residential Property 1-4 Units with a 2nd TD to be foregiven in its entirety. Before this bill was passed, NFCU was unfortunately requiring all borrowers to take this promissory note in a short sale and even if you had let it go to foreclosure, there was a high probability that this same loan would have pursued you again with legal right to pay the whole balance or negotiate another promissory note. Then your most effective way of eliminating the whole debt would be filing a Chapter 7 Bankruptcy, which is also another avenue now, however, that would not serve you in order to buy another home now.
      I do know that there is legal remedy out there, especially in how a TD holder reports your account after a short sale and I can recommend an attorney for you to speak to. There is known recent court judgements against TD holders after a successful short sale to report the loans on the borrowers credit report as paid in full(debt satisfied) and or remove them completely from the report, however in your case your note and all documents of the sale will have to be reviewed by an attorney.
      Please call me at your earliest convenience to discuss.

      Reply

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