Posted by TRandle on November 04, 2001 at 22:54:04:
Here's my disclaimer for anyone who responds. I know you're not an attorney and that I need to have an attorney in Texas review and modify the language as necessary to conform to the laws of Texas.
That said, I've been through many of my courses and have a beginning from combining my reading of one of Bronchick's and Behle's courses, but I was hoping someone might share their preferred subordination and substitution clauses for promissory notes secured by a deed of trust.
The situation is that our company will sign a promissory note (2nd lien) in the amount of 14k due in a single payment upon being cashed out by our TBer. The seller did not request this security. I offered it and I want to provide it, but in a manner that allows me the most flexibility.
Also, is it recommended to have the clauses in both documents?
I would also be interested in how those of you who have done this before have worded the payment verbiage in the promissory note.
Here's what I currently have:
"2. PAYMENTS
A single balloon payment will be due at the time that a lender places a purchase money lien on the property located at 404 Arrow Head, Round Rock, Texas 78681.""5. SUBORDINATION AND SUBSTITUTION
(A) The Deed of Trust securing this note, together with extensions or renewals thereof, shall remain junior and subordinate to the existing first lien and any future liens secured by a Deed of Trust that satisfy or discharge the existing first lien.
(B) The Deed of Trust securing this note, together with extensions or renewals thereof, may be transferred to any property with sufficient equity to adequately collateralize said note."Thanks in advance for any responses.