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It is very important to take certain safety measures to ensure that
your note stays as valuable as possible over the life of your note. The following list contains some of the safety suggestions
you will find in the Note Holders Manual. Contact our office to get your free copy now. - Note Safety-Loan-To-Value Ratio
A low loan-to-value ratio makes your note safer and increases its resale value. The loan-to-value ratio for your note is the sum of the current loan
balance for your loan and all senior loans divided by the current market value of the property securing the note.
- Storage
It is important to keep your
original note in a safe place such as a safe deposit box or a fireproof safe in your home. Make a photocopy to keep with your
trust deed and other escrow papers. There are two reasons for this
precaution. First, the note is not recorded in the county recorder's office. The deed of trust is. If you lost your deed of trust, you could simply get another copy at the recorder's office. This is not so with your original note. Second, your note is a negotiable instrument which means it can be endorsed on the back like a check. You wouldn't
keep an un-cashed check lying around, so think of your note like a check and take good care of it.
- Maximizing Note Value-Payment Records
Keeping a detailed,
well-organized and legible payment record showing the date each payment was received, and a breakdown of the principal, interest
and late charge for each amount received. This is important to maintaining the value of your note. If you ever decide to sell your note, you will be required to show the payment history to a prospective note buyer
so the note buyer can verify the payment patterns of the note payor.
If the payments on a "seasoned" note, which is a note with a payment
history over an extended period, have been made consistently on time, the value of the note will be greater than if the payments
have been late or delinquent because the perceived risk is lower.
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