Property Liens, Promissory Notes
& Security Instruments  

Q.  I was told that all mortgages are property liens and, as such, they
      have two integral parts.  If this is so, what are they?

 A.  Itís true:  they are the promissory note and the security instrument.
      The promissory note is the evidence of your debt.  Itís an I.O.U.
       that specifies exactly how much money you borrowed as well as the
       terms and conditions under which you promise to repay it.  (I am
       often surprised at how few borrowers know what a promissory note
       looks like: I routinely ask them to forward me a copy of their
      ďNoteĒ to see if they have a prepay penalty on their 1st when they
       are looking to refinance). 

      The security instrument component gives your lender the right to
       take whatever steps necessary to have your property sold in order
       to satisfy the debt.  The legal process triggered by the security
       device is called foreclosure.

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