How Do I Enforce a Promissory Note Collateralized with Real Estate?
Creating a Promissory Note backed, secured or collateralized with real estate may be a problem, as promissory notes are not fully structured for collateral. A holder of a promissory note is permitted to bring a lawsuit in court to collect money that is due and owing. However, if a promissory note does not also include a mortgage note on the real property “securing” the loan, the holder of the Promissory Note may not be able to foreclose on the property or take any action to remove the owner or tenant. Merely executing a promissory note, without substantially more legal documentation, does not create a lien on real property. A mortgage note is required to create such a lien. As such, a course of action may be to sue to collect on the promissory note, obtain a judgment and then initiate foreclosure proceedings (assuming that the person that promised to pay the money is indeed the owner of the real property). And prior to foreclosing on the home, the promissory note holder may need to tak
