Be Careful What You Ask For
 There is increasing chatter about the notion that banks may not have the right to foreclose on many of the loans that are in default because of an issue with the promissory note. So, what is the promissory note and why is it so important?
When you sign loan documents to secure a home loan in California, among the documents you sign are a deed of trust and a promissory note. The deed of trust (referred to in common parlance as the mortgage) is the document that allows the bank to take your home if you don't repay the loan. Essentially, it transfers title to a third party known as the trustee (you are the trustor and the bank is the beneficiary) and allows the trustee to sell the property in order to satisfy the loan in the event of a default (a.k.a. a foreclosure). This sale is known as a trustee sale. So, if you have ever had the nagging feeling that you don't really own your home, you are right.
The promissory note is the I.O.U. It is the document that says you owe the bank $300,000 at 5% interest for 30 years and you have to make monthly payments on that amount. The deed of trust ensures that you honor this obligation. Since the deed of trust is tied to the promissory note, the power to foreclose under the deed of trust is only as valid as the validity of the promissory note. And therein lies the problem. If it can be shown that the promissory note is invalid, then not only is the bank not entitled to foreclose, but in the extreme case the entire debt is wiped out and the house is free and clear.
So what would make the promissory note invalid? A promissory note is a negotiable instrument, which means it is a special type of "contract" for the payment of money that is unconditional and freely transferable to another party. Other examples would include a check because you can endorse it over or cash. I know this is getting very legal but bear with me. Negotiable instruments are special because you must hold onto them. A regular contract can be photocopied and the photocopy can be used to enforce the terms of the contract. With a negotiable instrument, you need the original with the original signatures.
The issue the banks are having right now is when they are attempting to foreclose, some borrowers are demanding that the bank prove they have the note in their possession. Because the notes have been bundled and sold so many times, some banks that weren't careful can't produce the original note. Not good for the bank. Without the original note, the argument can be made that the bank is not entitled to repayment on the loan and the deed of trust becomes meaningless.
This presents a much more serious problem. If this strategy is used on a large scale to convert encumbered homes into free and clear homes, the entire financial system could collapse. Individual homeowners might get a windfall at the expense of the overall economy.
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LOL - Laughs OnLine
"Okay class, now repeat after me!"
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Tomato Planting Perfected
Growing tomatoes at home is not difficult, but I have found that a few tricks that I've learned over the years can ensure healthy plants and high yields.
Soil - It all starts with the soil. Of course soil is different everywhere, but I've generally found that a 33% mix of natural soil, amendment (e.g. Kellogg's Amend) and manure works well. Chicken manure is best, but not necessary. Most home improvement stores now sell steer manure blends, which remove the danger of burning your plants if you plant right after soil prep. If your tomatoes are prone to get those nasty brown spots on the bottom, your soil may be deficient in calcium. Mix a little Gypsum into the soil which is calcium rich.
The Plants - I've experimented with dozens of plant varieties over the years including trendy hybrids and heirlooms from around the world and ultimately come back to this: for yield, size and flavor, you can't beat the classic "Better Boy". The only downside is they take a bit longer to mature than another classic, "Early Girl" but are superior in fruit size. If you're a cherry tomato person, my favorite is "Sweet 100". Just be aware that the vines tend to take over.
Planting - I buy my plants in the typical 4" pots, then transplant them into 1 gallon pots for several weeks. I do this for 2 reasons: my growing area is not in full sun until late April and I don't want to wait until then to get started; more importantly, it allows me to develop plants with fairly sizable root systems before final planting. Tomato plants will sprout roots from any place on the stalk, so you always want to plant your plants as deeply as possible in order to establish the strongest possible root system.
Watering - Make sure to build a "soil ring" around your plants so you can put a significant amount of water on each plant. The idea is to have the water go deep into the ground under the plant, which in turn draws the roots down to get to the water. Think less frequent, deep watering, vs. frequent, light watering.
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Share If You Care
Our goal with this newsletter is simple: Cover every important topic that might help homeowners and investors make more informed decisions concerning real estate. You can help in two ways:
1) Send us any articles or information you come across that might be of interest to other readers
2) Forward this newsletter to anyone and everyone you know that owns or plans to own real estate!
Sincerely,
Kwame J. Granderson
Equinaire
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Did You Know?
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The word "Checkmate" in chess comes from the Persian phrase "Shah Mat," which means, "the king is dead"?
Did you also know the way you appear as the buyer on the Purchase and Sales Agreement is an important decision that most people overlook?
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