Individuals, families, companies, and nations all make economic decisions. All have limited amounts of money, requiring each to make hard choices on how to spend their financial resources. Each carry their own system of dispensing their finances:
Households make a decision between paying the rent and buying medicine;
Making a decision involving entertainment--it's a choice between buying a ticket to a movie or a football game;
Companies make decisions based on using their savings to purchase more merchandise, take a vacation, or pay bonuses;
Nations too, have to make a decision between spending on natural defense or building highways
In economic terms, families, storekeepers/businesses, the nations--all must economize in order to satisfy their most important needs and wants.
An economy grows when it produces more goods and services: factories, machines, farming, and education. An economy must grow to provide people with an increased standard of living--more and better goods and services. The faster an economy grows the faster the standard of living increases.
Four elements are recognized as productive resources:
natural resources: soil and water;
capital: factories, tools, supplies and equipment; capital also means money to buy things;
labor force: people who work and people who are seeking work, and;
technology: scientific and business research and inventions
Of the four elements listed, capital, the money to buy things, is our subject. Capital is an asset or resource from which one can buy or sell.
A promissory note is an asset or capital. A promissory note is a documented written agreement (sometimes a legal document) that states a promise to pay, and the terms which include the total amount due, amount to pay and frequency (i.e.: weekly, monthly, semi-monthly, annually), interest rate, and the length of time to fulfill the commitment.
Banknotes have evolved over time. Original money was based on precious metals. Banknotes were seen as an essential IOU (a promise to pay note but without a specified payment to pay or payment plan). With the removal of the precious metals from the monetary system, banknotes evolved into the credit card system we know today.
With the increase of technology and computers, the money system now includes credit/debit cards, prepaid credit cards, and online banking.
The value or devalue of the dollar is driven by our economic system as seen by the ups and downs of the Wall Street market (stocks, bonds).
Known types of notes: real estate (residential and commercial property); structured settlements (involving lawsuits with an injured party, and a final judgment, order, decree, deed, lien); and wills (estates, trusts, probate and inheritance).
Terms of a note: principle amount, payment plan and frequency, interest rate, if any, and the maturity date. In the event of a default for failure to pay, language is included on behalf of the payee's rights if foreclosure of assets is involved.
Demand promissory note: Notes that do not carry a specified date of maturity are due on demand by the lendor. The lendor will usually give a few days notice before the payment is due.
Promissory notes when sold, can serve to solve a financial crises to families, companies, or nations to satisfy a need.
Once sold, the promissory note is sent into escrow for safekeeping and monitoring of payments processed.
An escrow can also be referred to as a trust account, or trustee (a financial institution).
The process of an escrow is a documented written agreement given by one person to another person for delivery to a neutral third person after a financial transaction has taken place (i.e. a contract or promissory note). This third person is referred to as an escrow agent.
The agent receives the document from the grantor (the seller-receiver of payments), and holds it for the grantee (the buyer--maker of payments) for handling the paperwork and transfer of funds.
The agent creates a ledger (record of payments), containing the details of the installment of payment schedule:
creates the principle amount due; records the amount paid, and the interest rate;
calculates late fees, if any;
the ledger is posted with any overpayments or adjustments;
accommodates for any custom language, ie. balloon payment;
calculates any early payoffs or balloon payment;
handles any "insufficient funds" checks and forgeries;
sends out any notices as needed to parties;
deposits funds received and transfers to seller;
holds and distributes any funds for property taxes or homeowner's insurance fees;
the agent can deduct an escrow fee for processing and handling activities, including paying off liens, clearing titles and other debts associated with the account
This processing continues until the conditions of the note have been met, thereby protecting both the seller and the buyer.
Most escrow documents are deeds to land. Stock certificates, stocks, bonds, and even cash may be placed in escrow. The terms of most escrows are stated in the promissory note.
An escrow cannot be changed unless all parties agree by modifying the original promissory note.
If parties are intent on creating their own promissory note, and if unusually large amounts of money is involved, it's to each party's interest to discuss it with a reputable attorney.
Ultimate Cash for Notes Network -- Where Solutions Matter
Works with private buyers who invest in buying promissory notes.
Come, visit the Resource Shoppe which has been created to provide any interested consumer on the different types of books on a variety of notes.
Thank you for your interest.
Ms. Mary Pacheco,
Creator/Founder:
[http://www.Ultimatecashfornotesnetwork.com]
Safe, Secure, Confidential
No comments:
Post a Comment