Posted by JohnBoy on September 07, 2005 at 15:19:17:
If you just want to give it back to the seller then just talk to the seller and see if they would be OK with that. Some sellers will just let you walk away and some may not.
As far as selling the property, yes, you can sell it. Upon closing of the sale all proceeds will go to pay off the seller and any extra left over would go to you. But you are probably going to have to record your contract first. Why didn’t you record it? Without a recorded contract you have nothing to protect your interest in the property and no one would ever know you had an interest in it unless your contract is recorded.
Hello, I would like some clarification of the two paragraphs listed below, thank you in advance for your assistance. Peter
In the Prepayment paragraph below, does this statement mean all unpaid balance of principal and all unpaid interest, including all future interest that was due on the entire Note? It states the accruing interest shall be treated as unpaid principal.
In the Default paragraph below, does the statement mean all unpaid balance of principal and all unpaid interest, including all future interest that was due on the entire Note?
PREPAYMENT. In the event of any prepayment, this contract shall not be traeted as in default with respect to payment so long as the unpaid balance of principal and interest (in such case accruing interest shall be treated as unpaid principal) is less than the amount that said indebtedness would have been had the periodic payments been made as first specified above.
NOTICE OF DEFAULT. Noteholder may require Borrower to pay immediatley the full amount of principal which has not been paid and all the interest that Borrower owes on that amount.
No, it does not mean all future interest that would have been paid had the payments been made over the full term of the note. Accruing interest would pertain to interest accrued on any unpaid amounts owed that were still unpaid. As in, past due amounts owing.
Default is for any current unpaid balances owed and any unpaid interest that accrued on the unpaid amounts past due. It does not include interest on any principal balance owed that is not yet due.
If you were several payments behind where you were in default, interest accrues on that unpaid amount that is past due. So when the lender calls the note due you would owe all the unpaid principal, plus any interest that acrrued on any amounts past due. You would not owe future interest on principal that was not yet due.
ACCELERATION - A payee’s right to demand immediate payment of an entire loan balance, including payments otherwise due at a future time, if a promisor defaults under a promissory note’s terms. For example, a payee may require a repayment of all remaining installments if a promisor fails to make a regularly scheduled payment when due.
This is all future installments due which is all the remaining principal due, plus any back payments, plus any interest that has already accrued that was due and not paid. It does not pertain to all future interest that would become due over the balance remaining on the note. You can only collect interest on money that is due now, past due, and any interest that accrues on any past due principal. You can not collect on interest that would be due in the future on money that is not yet due.
Re: Land Contract Default - More Info - Posted by Ken Jenkins
Posted by Ken Jenkins on September 07, 2005 at 14:53:04:
Hello:
I had a question about an unrecorded land contract. I purchased a home on a unrecorded land contract. I have relocated to another area. I want to either sell the house, or give it back to the deed holder. How do I deal with this situation? Do I default on the unrecorded land contract? Do I have the right to sell the property?