My mortgage company agreed to do a short sale on my residential property and want me to sign a promissory note to pay back 1/2 of the loss ($30,000). I don't understand the note. I have tried talking to them to explain and they just threaten me that they will not accept the short sale, nor will they let me talk to anybody that can explain this. Here's what it says:
DEFAULT: I will be in default if any of the following happens (a)I fail to make any payment when due; (b)I die or become insolvent, a receiver is appointed for any part of my property, I make an assignment for the benefit of creditors, or any proceeding is commenced either by me or against me under any bankruptcy or insolvency laws.
LENDERS RIGHTS: Upon default, Lender may declare the entire unpaid principal on this Note immediately due, without notice, and then I will pay the amount. Lender may hire or pay someone else to help the collect the Note if I do not pay. I also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether there is a lawsuit, including attorney's fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunctions), appeals costs, in addition to all other sums provided by law. This Note has been delivered to Lender and accepted by Lender in the State of Texas. If there is a lawsuit, I agree upon Lender's request to submit to the jurisdiction of the courts of Dakota County, the State of Minnesota. This Note shall be governed by and construed in accordance with the laws of the State of Minnesota.

Does this mean that if something should happen and I need to file bankruptcy before it is paid, that I am still liable for the amount?:confused:

They are also saying they are going to send me a 1099c for the full $60,000.:eek:

You are being screwed basically, first 1/2 of the 60,000 is 30,000, and the taxes on the 60,000 will be close to 20,000 in taxes, so you will end up still paying about the 50,000 between taxes and loan.

The idea of a short sale is that they just accept the property back for the offer.

You are must better off just dong a bankrupty if you meet the other requirements since you are most likely still heading there, with all of the debts you are getting into in that deal.
I would let an attorney see it first.

But on the bankrutpcy sounds like you will have to pay their attorneys to try to fight against you being able to file if you decide to file latter.