9% NOTE SECURED BY REAL ESTATE MORTGAGE IN NORTH DAKOTA

Description

Item Id: Kelley01
Case Name: Kelley, John & Dawn
Case Number: 17 30526
Trustee:
Starting Minimum Bid: $250,000

Description: Estate’s 100% interest in a Promissory Note Secured by a Mortgage bearing a 9.00% interest rate per annum. The original note was for the principal amount of $400,000. Since the date of the agreement, a $50,000 payment ($17,950.68 interest and $32,049.32 principal) has been made since signing and recording of the note, leaving a current principal balance of $367,950.68. The promissory note requires that interest only be paid annually on December 1 of each year. The principal amount due under the promissory note may be prepaid without penalty. The unpaid principal balance is required to be paid no later than June 1, 2028. The sale will not include an interest payment of $33,115.56 which will be due and payable to the Trustee on December 1, 2019.

Further information about this note:

Pursuant to a bankruptcy court settlement agreement (Exhibit A) dated June 1, 2018 (Bankruptcy case #17-30526), Erik A. Ahlgren,Trustee; Judy Keeley and the personal representative of the decedent’s of Eugene Kelley agreed to the following:

Judy Keeley executed a secured promissory note (Exhibit B) in favor of the bankruptcy trustee, Erik A. Ahlgren, in the amount of $400,000 bearing an interest rate of 9%. Since the date of the agreement, a $50,000 payment ($17,950.68 interest and $32,049.32 principal) has been made since signing and recording of the note, leaving a current principal balance of $367,950.68.

The promissory note is secured by a mortgage (Exhibit C) on thirteen (13) real estate parcels in Walsh and Pembina County, North Dakota. Those parcels are described in the mortgage payable to Erik A. Ahlgren as Trustee, which was dated March 5, 2019 and recorded in Walsh County on March 13, 2019 as document number 292007 and in Pembina County on April 3, 2019 as document number 255019. Judy Keeley signed the following documents granting further security to the Trustee: (1) A general security agreement (Exhibit D) which is secured by a UCC filing by the Trustee (Exhibit E) and (2) A Notice of Security Interest in American Crystal Units Dated January 8, 2019 (Exhibit F).

As further security, Judy Keeley assigned a mortgage (Exhibit G) to the Trustee on October 25, 2019 and was recorded on January 18, 2019 in the office of the Walsh County recorder document number 291754. This assignment originates from a promissory note in the amount of $400,000 that was signed on May 16, 2013 between John Keeley and Dawn Keeley as mortgagors and Bell Bank fka Bell State and Trust, as mortgagee and was recorded on May 27, 2011 as document number 274355, as amended by that certain Modification of Mortgage, dated July 1, 2015 as recorded in the Office of the County Recorder in and for Walsh County, North Dakota, on July 7, 2015 at document number 284304. This same mortgage was later assigned by Bell Bank fka Bell State and Trust to Eugene Kelley (now deceased) and Judy Keeley by an assignment of mortgage recorded on March 1, 2018 as document number 289746.

The Priority position of the $400,000 promissory note secured by a mortgage signed by Judy Keeley in favor of Trustee, Erik Ahlgren is second (2nd) behind North Star Community Bank as follows:

North Star Community Bank of Grafton, North Dakota, is Judy Keeley’s primary lender, and is in the number one (1) priority position with respect to all of Judy Keeley’s real and personal property.

The mortgages between Judy Keeley and North Star are as follows:
(a) Real estate mortgage, recorded November 16, 2017 as document number 289193 securing a promissory note in the amount of $2,320,000;
(b) Real estate mortgage, recorded November 16, 2017, as document number 289194 securing a promissory note in the amount of $550,000. The mortgage indicates a maximum mortgage amount of $4,350,000;
(c) Real estate mortgage, recorded February 15, 2018, as document number 289691 securing a promissory note in the amount of $600,000. The mortgage indicates a maximum mortgage amount of $4,350,000;

The total amount of the promissory notes secured by the three (3) mortgages (Exhibit H) to North Star Community Credit Union are $3,470,000. Pursuant to the North Star Community Credit Union balance sheet dated February 28, 2019, the balance owed by Judy Keeley to North Star was $3,290,309.

Additional information provided:

Exhibit A – Bankruptcy Court Approved Settlement Agreement
Settlement-Agreement-June-1-2018

Exhibit B – Secured Promissory Note Dated June 1, 2018
Secured-Promissory-Note-June-1-2018

Exhibit C – Real Estate Mortgage Dated March 5, 2019
Real-Estate-Mortgage-dated-March-5-2019

Exhibit D – Security Agreement Dated March 21, 2019
Security-Agreement-dated-March-21-2019

Exhibit E – UCC Filing Dated April 16, 2019
UCC-Filing-dated-April-16-2019

Exhibit F – Notice of Security Interest in American Crystal Units Dated January 8,2019
Notice-of-Security-Interest-in-American-Crystal-Unit-dated-January-8-2019

Exhibit G – Assignment of Mortgage Dated October 25, 2018
Assignment-of-Mortgage-dated-October-25-2018

Exhibit H – Three (3) Mortgages to North Star Community Credit Union
Three-3-RE-Mortgages-to-North-Star-Community-Credit-Union

Real Estate Tax Statements from Walsh County
County-Real-Estate-Tax-Statements

Ownership and Encumbrance Reports and Updates
Five-5-Ownership-and-Encumbrance-Updates-dated-May-2-2019-March-21-2019

Estimated Market Values Vorachek Farm Appraisal
Estimated-Market-Values-Vorachek-Farm-Appraisal.pdf

Trustees Worksheets of Property Values
Trustees-worksheet-of-property-values

Trustees Memo Regarding Settlement Agreement
Memo-for-Settlement-Agreement

We do not know of any other liens (see above on known liens)

Notes: A closing cost fee of $275 will apply. This is all we know about this item. Any fees/liens owing on this item are not part of the final bid price. A bid submitted by a buyer is an agreement to our Terms. Buyers should not bid unless they fully intend to complete the sale in accordance with our Terms (to view terms, click “Terms” tab in Seller Store header at top of ad).

Bidders should familiarize themselves with BKAssets.com policy regarding ‘Proxy Bidding’ (see ‘Bidding Guide’ on www.bkassets.com Home Screen). BKAssets is not responsible for connectivity issues, or Internet transmission times, when submitting an auction bid near the close of auction. The auction process does not extend past the set close time of the auction and bidders are solely responsible for the timing and receipt of their bids if they elect not to utilize Proxy bidding.

Title and Escrow: A title search was NOT performed on this property. BKAssets does not provide title insurance. If title insurance is desired, the buyer is responsible for obtaining it through a title company. The title company must comply with the terms of the sale as ordered by the court. Because this is a US Bankruptcy Court ordered, as is where is sale, BKAssets.com is not permitted to use an escrow company, or provide any warranties or guarantee, implied or stated.

Legal Info: By Order of the United States Bankruptcy Court, Bkassets.com sells this and any other property “AS IS, WHERE IS”, with no warranties implied or stated. This means that the Seller and the trustee are not responsible for problems (if any) with the title, the condition of the property, or any liens or encumbrances against the unit. The buyer will be entirely responsible for this Note after the sale including but not limited to: paying any fees/costs associated with this Note, paying all fees/liens (if any), recording/transferring the title and gathering any paperwork/documentation necessary for that process. BKAssets and the trustee shall be under no obligation to buyer except to provide buyer with an assignment of the Promissory Note and all security agreements. All the information as to the item description has been provided by the trustee and debtor attorney indicated above. BKAssets cannot guarantee that all the information is accurate. BKAssets recommends all bidders perform their own due diligence prior to bidding. As with any bankruptcy sale, this sale may be subject to court approval.

Payment Info: Certified check, cashier’s check and or bank wire “only”.

A closing cost fee of $275 (payable to seller) will apply. Full payment must be received within (7) days of winning bid. Any bidder who does not complete the sale within 7 days from the close of auction will be considered in default. Seller has the right to proceed with the next highest bidder.

Shipping Info: Shipping is included to all buyers in the United States. International bidders are welcome, please contact BKAssets for shipping costs to countries other than the United States prior to bidding. Shipping costs to locations outside of the US will be calculated at the close of auction. Please be advised that because this is a US Bankruptcy Court Ordered sale, and subject to approval, shipping can take an average of 3-6 weeks.

Bidding Guide: Please review the bkassets.com bidding guide for terms of auction prior to placing a bid or making an offer..