Here's the background:

I've been investing in real estate for 16 years. I have gotten hundreds of loans from several sources over that time frame. When I get loans, the loan officers will usually go over the loan terms with me including interest rate, time frames, if anything adjusts during the loan, late fees, prepayment penalties, and default rates. Basically anything that is important for me to know about the loan.

Now I normally pay my mortgage payments on time or at lease close to on time (sometimes systematic issues may come up at the beginning of a loan where some thing's get over looked and then missed but then they get corrected right away). I have paid late fees on loan payments before which I don't like but I can understand when it is my fault. 

Now for the current situation:

I have worked with a nationwide lender for the past 5 years and this lender has given me probably 30 DSCR loans and at an average of $5,000 profit to their company per loan they generate, I have personally paid $150,000 or more to their company in fees (this doesn't include the fees my real estate coaching clients have paid them over the years).

I have a few different LLCs that hold properties. One LLC only has 3 single family homes in it. Unfortunately I had 2 vacancies and repairs come up unexpectedly near the same time. This LLC did not have very high reserves in the account. So I had the reserves go to the repairs instead of paying the mortgage on time. This was a conscious decision. I know I was going to get some tenant buyers into the home that would each give me $4,000 for an option fee plus the rent and that would get enough reserves in the account for me to get caught back up on the payments and have some money left in the account.

After I got the properties filled and I called to see what the late fees were and to find the total amount on the 2 loans, I found out that when the loan goes past 30 days late, the default interest rate of $18% kicks in automatically so my payments goes from about $1400 to $2800 and they are retroactive to the interest that accumulates since my last payment. And in order for the default rate to go back I need to pay everything up to day. So what I was expecting to be a $2800 payment plus a some late fees turned out to be around $7000 - $9,000 for one and then around the same for the other one (I don't have the specific numbers in front of me right now). I called the loan officer to figure out what in the world was happening. He said that the 18% was standard practice. I told him this was not standard practice and I called up past banks to confirm this and they stated that their default rates did not kick in until the property goes into forcluse at like 90 days late. This was the first time I had ever gotten into a default rate and that he never verbally told me that it would be 18% on day 31 of being late on a loan. He told me that it was not his responsibility to tell me what the default rate was.

The loan officer transferred me to another person in his bank who called up the servicing company to see if they would take away the default rate. It took them 3 weeks to get back to me and told me that the investor was not interested in doing that. 

Now I know that the default rate is in the loan documents somewhere. But since I have gotten so many loans and they are almost always the same, I have stopped reading loan documents years ago and I count on my relationship with the lenders to afford me some flexibiiity and for the lenders to verbally tell me if there is any term in the docs that I need to be aware of. Again the loan officer told me that the information was in the docs and I should have read them. I asked him to go to the last 5 people he generated loans for and to ask them if they knew what the default rate was and when it kicked in. I wanted to see if this was more of a "me" problem or if this was a "messaging" problem. He said that he wasn't going to do that. 

So, fully understanding that this is my responsibility; after all I am the one that signed the loan document. I told him that he has made a lot of money on me over the years and he stand to make a lot more money on me and and my coaching students and that he should verbally go over any default rates with borrowers so they are well informed. I then told him, in not so many words, that if the investor wouldn't change the default rate back to the normal rate, that I wanted his company to cover the additional interest costs and if they weren't willing to do that then I would stop getting loans through them. 

Now before you commment, I realize my responsibility is to read what I sign and to bring the loans current. I know I could have dug up the loan docs or called and asked him the default rate before I decided to let the loans go past 30 days. Those are not in question, my question for you all is in 3 parts:

1. Do your loan officers go over your default rates with you verbally before you sign for a loan. 

2. From the perspective of a lender, is the relationship, or the amount of deals I bring to the table, let's say around $50,000 in fees personally and another $50,000 to $150,000 for my coaching students, worth the $11,000 that I want his company to pay for to cover the increased interest from the default rate for the 2 loans?

3. If you were in my situation how would you proceed moving forward?