Owner financing payment tracking app?

Question

Hello! Working on an owner finance deal and I'm curious what technology you use to keep track of payments and amortization schedules.

Caleb Christopher · Answer

I use OnePoint Lending as the servicer for our seller finance and wraparound deals (www.onepointlending.com). I've worked with several loan servicers, and no matter who you use, it's not fun setting it up, but I've had easier success communicating with OnePoint.

They have a login portal to track payments etc, like you mentioned.

Beth Johnson · Answer

@Marina Wong No. we just charge the servicing set-up fee at close. A monthly fee (typically around $5-20/mo) is added on to the payment. So if your interest payment is $1000 then the servicer automatically ACH debits your account that plus the servicing fee (assuming you set up automatic payments as @Christian Ehlers suggests). Any other fees such as close out fees or payoff demands are paid out on the back end when your loan is refinanced or paid off. You can see these charges added into your payoff demand by line item. They are all servicer charges and not lender fees.

Denise Carringer · Answer

Seriously, thanks so much for your thoughtful replies. I appreciate you!

Beth Johnson · Answer

We pass all loan servicing charges through to the borrower including set-up fee, monthly fees, and any servicing charges such as payoff demand generation, and loan close out fees.

Beth Johnson · Answer

@Denise Carringer

I'd suggest using a third party contract loan servicer. Plenty exist for private lenders (which is what seller financing is) and can track payments and am tables and also do automatic electronic withdrawal (ACH debit) which helps improve the likelihood of getting paid promptly each month. Additionally, most servicers will provide the tax documents needed at end of year (1099-INT, 1098-INT) and can also issue notices of NSF, late payments and support delinquency /default. Also, they do the payoff demands when the loan is being paid off and I appreciate not having to generate these myself. I think any seller without much knowledge of being the lender would appreciate the added benefits and hassle free approach using a third party.

Doug Smith · Answer

This might sound silly, but an old fashioned spreadsheet if you only have a deal or two. If you have more than 4 or 5 loans, then you might want to engage a sub-servicer to handle the billing and payments. It is an expense, but they keep it all legal and compliant. Once you hit a certain number of loans (check with your state dept of banking and finance or dept of business regulation), they might require you to have a license. If you get so large that you need to invest in technology, you'll likely need to get a sub-servicer anyway to do it for you and keep you compliant.

Beth Johnson · Answer

@Denise Carringer

My preference is to go local - some community banks offer this type of service or local escrow companies, which is what I found, because they offer a higher level of service than most national.

At the national level, it's the best of the worst in that industry - a lot left to be desired in the customer service department but still better than doing it on your own. Try Note Servicing Center out of California or FCI.

Brent Washam · Answer

I was using Zimplemoney to track 3-4 owner finance loans (not handle payments or escrow), the last 8 years, and last week they went up from $36/year to $23-47 per month.  This is simple math but the portal and reports are useful.  Does anyone know of a limited-support provider?  At this point I would pay $10 per month but I've seen much higher costs and the common requirement to process financial transactions, I just use the bank for that and check on taxes and insurance payments once per year using a calendar reminder to prompt me.  My customers are family or investors so escrow and payment handling is overkill.  Don't want to go to the spreadsheet model because 1.  Don't need the tool management and 2.  Like an independent party with on-demand loan data availability for myself and borrowers.

Josh Nix · Answer

We do all of our own serving in house and we use Mortgage Automators. Probably way to much for your situation but there were many good suggestions in the thread.

Aaron T. · Answer

Are they commission based, flat fee?

Owner financing payment tracking app?

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