There are various types of notes including promissory notes, mortgage notes, and deeds of trust.
Selling your note is not difficult, however, depending on your state and county, there are certain legal guidelines for selling your note.
Simanda Investment is a reliable real estate broker that can help you sell your notes. The experts at Simanda Investment will advise you on the legal considerations for selling a note.
3 Types of Notes
There are various types of notes available, depending on the type of loan. Here are three of them:
1. Promissory Notes
Just as the name suggests, promissory notes are written promises from the borrower to the lender. The note promises to repay the specific amount of money and applicable interest over some time.
2. Mortgage Notes
These are a type of promissory notes, specifically tied to a mortgage. A mortgage note grants the lender a lien on the property, which gives them the ability to foreclose on the property if the borrower defaults on the loan.
3. Deeds of Trust
These are similar to mortgage loans however, they involve a third party, known as a trustee, who holds the legal title to the property until the loan is paid off. If the borrower defaults, the trustee can initiate a non-judicial foreclosure sale to recover the loan amount.
3 Legal Considerations for Selling a Note
Here are three legal considerations that govern the sale of promissory notes:
1. Federal Regulations
At the federal level, the Securities and Exchange Commission (SEC) requires issuers of securities, including some promissory notes, to register with them and provide financial and other information about the issuer and the security under the Securities Act of 1933.
2. State Regulations
At the state level, the sale of notes is under “blue sky laws” which are designed to protect investors against fraudulent sales practices and Ponzi schemes.
Most states require registration of promissory notes, as well as registration of individuals and entities selling them.
3. Local Regulations
Depending on your county or city, there may be additional local requirements like taxes or fees on the issuance or sale of promissory notes within their local territory.
You may be required to record or register the payment of documentary stamp taxes with the local land records office.
Let Simanda Investments Help Sell Your Promissory Notes
Simanda Investment is a trustworthy real estate broker that deals with the buying and selling of real estate notes and business notes.
Visit their official website to sell your promissory note, today!