CAN I JUST TYPE THE PROPERTY ADDRESS ON THE PROMISSORY NOTE AND SAVE MYSELF THE EXPENSE AND HASSLE OF A DEED OF TRUST OR MORTGAGE?
We’ve run across Promissory Notes recorded with the County, rather than a Deed of Trust or Mortgage. This is NOT a good idea.
The Promissory Note is a negotiable document. The Note discloses details of repayment that you might not wish to make public.
In the event the Borrower fails to make payments, there is no mechanism in the Promissory Note that provides a way for the Lender to recover the investment. The only recourse for the Lender is legal action, such as filing a law suit.
A mortgage or a deed of trust has provisions that sets forth a process for which the Lender is able to acquire title to the property in the event the Borrower reneges on the loan. The process as to how this happens will be fodder for a different blog post. Immensely