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Unlike a mortgage or deed of trust, the promissory note is not recorded in the county land records. The lender holds the promissory note while the loan is outstanding. When the loan is fully paid off, the note will be marked as paid in full and returned to the borrower.
Beside this, who is the holder of a promissory note?
A written promise to pay money that is often used as a means to borrow funds or take out a loan. The individual who promises to pay is the maker, and the person to whom payment is promised is called the payee or holder. If signed by the maker, a promissory note is a negotiable instrument.
One may also ask, who holds the promissory note while it's being repaid?
As the loan is being repaid, the lender holds the promissory note. When the loan is paid off, it's marked as such and the note is returned to the borrower. Promissory notes are not the same as mortgages, either, although when buying a home, the two often go hand in hand.
To “secure” a promissory note means that you identify some specific property and attach it to the note. Then, if the borrower defaults on the loan, you will be able to repossess the collateral as compensation for the loan.