Private Money Loan Doc Software

28 Replies

I want to know who uses loan doc software to create their NOTES and disclosures when they lend their own money?  Who do you use and why?  I usually have the title company create the NOTE for me with their generic programs, but looking for something a little better or more professional.  Thanks!

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@Andrew Sterling  

Hi, thanks for the response. I am familiar with DocMagic. I am a regular lender doing FHA, VA and Conv, but I also loan my own money privately, and pool money from other investors when I don't want to loan my own money. What I am talking about in this post, is software to generate the disclosures and NOTE for private money loans when I am the lender loaning my own money to others. I think DocMagic will work for that as well, but I had heard there are some better programs for private money lenders. I just don't know the names of the programs?

I primarily loan my own money in my area and to people I know who are other investors.

David, regardless of your source of funds, you will never be seen as a "private lender" you're a broker and always will be, your source of funds is not a matter to classify a loan. You're a hard money lender, not a private lender. For you, there is no distinction between one dollar and another, stick to your conventional disclosures but you can omit those specific to the retention of loans from a wholesaler (% sold) and provide your own (I'd say something like 95%, that gets deeper, but you can sell, assign or retain your loan).

As to your note, I'd begin by modifying notes that you usually create and agree, you need a better note than what title companies crank out. Good luck :)

Bill, I must correct you! I am by definition a private lender.  I am using my own money, sitting in my checking account, and loaning it privately to individuals who I deem qualified to borrow it.  This is not brokering.  I also work as a regular lender, but I am loaning the money of others when I am wearing that hat.  The two are night and day.  When I am brokering, I have virtually no risk of my own capital and the money is coming from institutional sources. When I loan privately as a private lender, I have complete risk of my capital, I make all decisions and I suffer the consequences or rewards of my actions!  I am also a flipper and wholesaler, and I use my own money as a private investor for those deals.  

I appreciate your insight, but wanted to make it clear to anyone who reads this thread to not be confused and think that a private lender is a broker, because there is a big difference.  I would imagine many of the people here with money are just like me. They are private lenders agreeing to loan their own money, with their own terms, and taking full risk.

Try this http://www.nortridge.com/nortridge-loan-servicing-software.shtml

By having our attorney update our docs, we're going through this right now, @David Oldenburg . The generic paperwork you get from title will guarantee compliance with the GFE's but it can't be customized. I'm sure you like this when you're brokering, but it's too generic for us, as private lenders like you.

It sounds like you're not looking for loan servicing software, but simply a way to fill out the loan documents easily and consistently? DocMagic is total overkill for this and way overpriced.

To my knowledge, MS Word alone will allow you to create fillable forms but you still have to fill out each document individually, typing the same information repetitively, which is not only self-defeating but risks errors. Assuming you have a copy of your documents, there is an easier way.

I use Word to convert all our documents into individual PDF's and then use Adobe Acrobat Pro to combine them in one long fillable PDF. I add a single page up front with the fields contained in all the documents. For example, a field called "Borrower Name" appears on page one once, and is copied as many times as necessary to the note and deed of trust, further down in the PDF.

All I have to do is fill out every field on page one and every field with the exact same name in the rest of the document automatically matches and in the correct position. I think I have about two-dozen unique fields. Then, I save this as a non-fillable PDF that can be sent to our borrowers or to escrow.

It takes time to format to make sure everything looks professional. But once you spend the time, the docs look great and are easy to fill out. Also, I bet there are other programs cheaper than Adobe Acrobat Pro and perhaps free.

Hope this is close to what you were looking for, David.

Jeff S Na - what you just described is quite similar to something called "mail merge" that is done with word processing software in conjunction with either a database or spreadsheet. The database or spreadsheet contains the variable items that are to be input into the blanks of the document. 

Jeff S Na I am familiar with mail merge, and it sounds like you are suggesting I use that for multiple fields with the same input?

@David Oldenburg  - that is what my thinking was. If you can only map one spreadsheet cell into a document blank once (I am not sure this is a limit but I will explain how to workaround if it is), then you can use cell references in the spreadsheet to copy that one piece of info into many spreadsheet cells; and then you can get by with a one to one mapping because you can have multiple cells. And you can even reduce the visibility of the cells that are copies by putting them way below the main screen area of the spreadsheet. 

Originally posted by @David Oldenburg :

Bill, I must correct you! I am by definition a private lender.  I am using my own money, sitting in my checking account, and loaning it privately to individuals who I deem qualified to borrow it.  This is not brokering.  I also work as a regular lender, but I am loaning the money of others when I am wearing that hat.  The two are night and day.  When I am brokering, I have virtually no risk of my own capital and the money is coming from institutional sources. When I loan privately as a private lender, I have complete risk of my capital, I make all decisions and I suffer the consequences or rewards of my actions!  I am also a flipper and wholesaler, and I use my own money as a private investor for those deals.  

I appreciate your insight, but wanted to make it clear to anyone who reads this thread to not be confused and think that a private lender is a broker, because there is a big difference.  I would imagine many of the people here with money are just like me. They are private lenders agreeing to loan their own money, with their own terms, and taking full risk.

If you are lending in California you are considered brokering if you originate 8 or more notes secured by re in a calendar year ... even if it's from your own funds (CA B&P Code 10131.1(C)).  And of course there is the usury issue to deal with when you go over 10%.

Unless you're doing volume, why not just download a note & dot from Fannie/Freddie, it's a .doc file so you can make changes.  Good note software can be $10-$20k.

@Ron P. Appreciate the input! I am very familiar with the NOTE and DOT that FNMA and FHLMC use. I will take a look at the link you provided...thanks!

@Ron P.  

 I am not bound by usury laws in California.  I actually meet several exemptions based on the type of lending I do, but here is one of them... I am a real estate broker and I meet all the criteria below.  All of my loans are also 3-6 months on average, and fall into multiple other exemptions for short-term or temporary financing.  Here is one of the explanations on a legal website operated by an attorney...

""If a licensed real estate broker, not a salesperson/agent, has “made or arranged” the loan, then the usury law DOES NOT apply. The broker must be actively involved in negotiating or otherwise arranging the loan, but this does not include merely filing out preprinted forms. The broker must also be acting for compensation or in expectation of receiving compensation. The broker exemption includes loans secured by real property in the form of promissory notes secured by deeds of trust.

The only limits on the fees or points that can be charged on a broker exempt loan are if the first deed loan is less than $20,000, or a junior loan is less than $10,000. Otherwise, there is NO LIMIT on the fees and points that can be charged, in addition to no limit on the interest rate.""

@David Oldenburg  

That's my understanding about usury as well...that a broker is exempt.

This doesn't apply to you because you are a broker but I was making the point that in California you need to have a broker's license if you make 8 or more loans even if it's from you own funds.  Folks sometimes think you can make as many loans as you want from your own funds without a license, that's not true, you need a license if you make 8 or more. 

@Ron P.  Good point!  Yes, I think a lot of people believe if it is their own money there are no rules! 

Hello friends,

I am in need of a note and mortgage doc I can use for a private lender. Can anyone please help me out. Thanks

Shawn 

@David Oldenburg I have had a lawyer draft a strong set of documents for me (about $600) who is familiar with hard money. From there you have a great template to use and can set up a simple mail merge in excel for future deals.

http://opencbs.com/

http://sourceforge.net/projects/mifos/

http://www.datamation.com/open-source/62-open-sour...

A favor for a favor, especially since all of you are private lenders, and Im trying to figure out what rates I need to offer to get old debt of mine restructured into a positive payment history.

What should I do? Currently Im offering 20% and 20 points, is that not a good enough return for my ~600 credit score?

If so, how high should it be so I can find my yes?

https://www.rocketlawyer.com/form/loan-agreement.rl

@David C.   I spent a lot of time researching and looking for a company to handle my private money docs, when I loan my own money.  I was referred to a company called Superior Loan Servicing, who handles the docs sent to title, the servicing of the loan, and any foreclosure services...if needed. I spoke with their Vice-President, Scott Hacker. He can be reached at (818) 483-0027 ... I don't remember their exact fees, but I think it was $595 for the docs and $20 per month for the full servicing. I feel bot of those are very affordable, considering the risk and liability if you mess something up!  Good luck :-)

Thank you David! I've already received a call as a result of your blog posting. I appreciate the shout out. Our business continues to grow thanks to our clients who love our services. Thank you David for the referral and your continued support! We know how important loan documents are in any transaction as they are the structure and foundation for the repayment of the debt and its security. Our documents are always up to date with the most current legal requirements and are specialized disclosures are designed to protect the lenders interest no matter what type of loan you are making. If you have questions, we are always happy to take your calls. Thanks again!

Originally posted by @Scott Hacker :

Thank you David! I've already received a call as a result of your blog posting. I appreciate the shout out. Our business continues to grow thanks to our clients who love our services. Thank you David for the referral and your continued support! We know how important loan documents are in any transaction as they are the structure and foundation for the repayment of the debt and its security. Our documents are always up to date with the most current legal requirements and are specialized disclosures are designed to protect the lenders interest no matter what type of loan you are making. If you have questions, we are always happy to take your calls. Thanks again!

 I noticed on your website you service loans.  Does that include monitoring insurance?

@David C. - Yes, we monitor Insurance as part of standard loan servicing. We even have a master insurance policy that we can force place insurance on a property for the lenders protection if the borrower allows his insurance to lapse.

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