Written Homework #2
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  • make "homework-2" the first part of the digital file name
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    Personal Guaranty

    Background:
    • George Homebuyer is purchasing a home from an old family friend named Peter Homeseller.  Mr. Homebuyer can't pay the price in cash and he can't get a bank loan because of his poor credit.  Mr. Homeseller is willing the finance the purchase.  To do that Mr. Homebuyer will give Mr Homeseller a promissory note ("Promissory Note") in exchange for the deed.  As collateral the buyer will give the seller a mortgage ("Mortgage") encumbering the property being purchased.

    • In addition to the mortgage Mr. Homeseller wants further assurance.  He wants Bill Berry, Mr Homebuyer's uncle, to execute a personal guaranty ("Guaranty") obligating him to pay the entire outstanding balance on the Promissory Note in the event of default.

    Description of the Guaranty Contents:
    • The loan to George Homebuyer ("Borrower") from Peter Homeseller ("Lender") will be evidenced by a Promissory Note.  The principal amount of the Promissory Note will be $100,000.00 with interest accruing at 7% per annum with a term of 10 years.  All of the documents will be signed on the same date in about two weeks)

    • The person signing the Guaranty is Bill Berry ("Guarantor")

    • The Guaranty is to be unconditional wherein the Guarantor will be obligated to pay any and all amounts owed on the Promissory Note in the event of default (including any resulting attorney fees and court costs incurred by Lender).

    • The obligations of the Guaranty shall shall not be affected by any extension of time or other forbearance or indulgence granted to Borrower nor by any release or modification of the Mortgage or by the failure of the Lender to foreclose on the Mortgage

    • The Guarantor is to waive all requirements of notice, demand, or presentment in case of any default by the Borrower on the Promissory Note and to waive any right which the Guarantor might otherwise have requiring the Lender first to proceed against the Borrower before proceeding against the Guarantor for the enforcement of this Guaranty.

    Writing Assignment
    • Prepare the Guaranty.  Do NOT prepare the Promissory Note or Mortgage

    • Do not include any other covenants, representations or requirements that are not specified in this writing assignment.  At your option you can add a limited number of common sense boilerplate type provisions BUT DO NOT add anything that will impose substantive burdens upon the parties other than what has been specified in this homework assignment.

    • Prepare a document that requires no further editing and is ready to sign