Real Estate Investor · Washington D.C. · Member since 2010 · 63 posts · 3 votes
Happy New Year Everyone,
I am holding the note for a property I owner financed. The buyer has begun making payments and I am seasoning the note for a note buyer. I have a servicing company that is handling the payments and dispersing them to the appropriate accounts related to the house.
Can anyone give me advice on how I get the payments reported to the credit reporting agency?
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
15y
You may try looking for a new servicing company. I don't know all of the ins and outs of setting up accounts with the bureaus, but it really isn't an efficient use of your time. Find a servicer that will report for you guys and specialize in what you are trying to do best.
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
15y
You may try looking for a new servicing company. I don't know all of the ins and outs of setting up accounts with the bureaus, but it really isn't an efficient use of your time. Find a servicer that will report for you guys and specialize in what you are trying to do best.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
15y
Hi, it's very important to deposit the checks when they are received. Better yet, see if you can have your bank accept the payments for deposit to your account and allow the borrower to mail it in or drop by and make a deposit. If your bank gives you any flak, (because they will not want to "service" you loan,) Give the borrower a stack of deposit slips to an account set up for the loan. They can mail in checks with a deposit slip.
It really would be bettwer to have a servicer, but if things are going smoothly, and you want to sell the note soon, just make sure the payments are deposited timely.
You, as an individual, can not report to any credit agency as you must be a member to report.
Your borrower will be required to show whren payments were made to their next lender to refi your deal. Any record you make will not be accepted, since the holder of a note has an interest in it being paid off. The checks will be deemed to have been paid by the cancellation date on the check as deposited, not the date they were written, so it is important you make sure they are deposited immediately.
Real Estate Investor · Washington D.C. · Member since 2010 · 63 posts · 3 votes
15y
Thanks for the reply Financexaminer. But I do have the note with a servicing company. That is not my deal. I need the payments recorded with a credit reporting agency as I plan on selling the note. Seasoning the note as I understand is the allowing of time for the buyer to make timely payments to show the note buyer the credit worthiness of the person selected to purchase the house. In turn gives me leverage on the asking price of the note to be sold.
I am not just an individual. I have an LLC. Is there anyone that has had my experience on this forum? I am really trying to get firm explaination as to this process. I dont want to guess and find that it should have been done a diffent way.
As the company holding the note it would seem that being such a large purchase for the buyer they would benifit from me listing thier credit worthiness in the report.
Has anyone seasoned a note before?
Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
15y
you don't need to report to the credit reporting bureaus to sell the note...just have to provide proof of their ontime payments...the servicing company should be able to provide proof of yoru buyer's payments
Real Estate Investor · Washington D.C. · Member since 2010 · 63 posts · 3 votes
15y
Thanks Bryan. Have you had the experience of selling a note? If so how long did you have to hold it? Was it in this market?
Just trying to get an idea of what I may be infor in the near future.
Thanks a gain.
Residential Real Estate Broker · Grand Blanc, MI · Member since 2008 · 885 posts · 316 votes
15y
Bryan is exactly right.
I've sold several notes and I had to provide proof with every payment made. I held the notes for 12 months before selling them.
Currently I have a note which the buyer is asking me to report to the agencies, but I don't have the means to do so and have told him accordingly. I indicated to him that all I can do is copy the monthly check or money order, and that he should do the same. There's not much more that can be done.
Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
15y
I just sold on a note a week or 2 ago to Amerifunds. Dan Butcher is a notebroker on here who connected us. They wanted 2 month's seasoning, but after all the paperwork, it ended up being a little over 3 months I believe. Biggest thing was knowing what the notebuyer would want. Sounds like you have the processing place, but they'll also want to see credit scores, downpayment, etc. They may also want to interview your buyer who would be their borrower. If you sold on a contract for deed, they'll want that converted to a deed of trust and mortgage as well.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
15y
Monica, I owned a mortgage company, yes, I have experience.
If you have a servicing company, which I had for seller financred notes and installment contracts, they should be reporting.
What I meant by individual was that unless you have say, 1,000 loans + you won't have enough business running through the system for the agencies to fool with you, most mortgage brokers don't service loans and are usually not a reporting agency. Credit agencies have "members" report that have enough business to report or have significant balances. For example your neighborhood furniture store may not report credit for leased or installment sales. That fact that you have an LLC is probably not going to meet the threshold......but
A mortgage/loan servicer should be reporting. What makes you think they do not report?
Now, I think too that you might be somewhat mislead about the seasoning, as payments are made, the proof of payments can still be shown as I mentioned above, by cancellation date.
In a short period of time, most buyers will want that anyway, since a credit report only shows deliquencies over thirty days late, at 30/60/90, over 90. If a loan is only 6 months old, I would want to see the day they make it. A note that is 2 years old or +, I'll look for late payments. New notes are practically underwritten at purchase, six months is nothing into a mortgage.....so it's not that big of a deal.....good luck.
Real Estate Investor · Washington D.C. · Member since 2010 · 63 posts · 3 votes
15y
That was definately the meat and potatoes of it. ThAnKs Guys.
That was eactly the information I was looking for.
I will call and reconfirm with the servicing company that my partner is correct in stating that they do not report. However they are handling the entire process less our division of distribution of cashflow. I will also shop around myself to compare vehicles out there other than the servicing company I am using. Have a wonderful evening.