All Forum Posts by: Account Closed

not a cpa, but first if he is a corp/llc you don't need to issue a 1099 at all.  Second, once you issue 1099 what do you care what he does, you've done your part.

@Matthew Holtry

Good point.  I've done it both ways...money to borrower directly and through title.  Nothing wrong with either.  Going through title costs a little more and there are two wires involved.  I like going through title, that way there is a very good record about if/when/where the money went.  If borrower ever says (s)he didn't get the money I would turn to title and say, hey, it's your problem.  Although, if you keep a good banking trail showing money went to borrower that's probably okay too.

1.  Funds are distributed by title after mortgage is recorded, usually the same day.  I would wire money, not cashier's check, cashier's check will delay closing by a few days to clear.  You can send your money to title in one of two ways, (1) wire $25k and title will send you a check (or wire) after closing for your points/fees, (2) net funding: wire $24k ($25k-$1k) and you don't have to wait for your $1k check.

2. I get a ALTA Lenders Policy with whatever endorsements come standard.

3. Attorney once, template forever more.  You fill in the blanks, email to borrower, borrowers signs, in front of notary for mortgage, notary not necessary for note, borrower overnight mails originals to title, title records mortgage after your funds arrive at title, title distributes net proceeds to borrower and whatever if any proceeds to lender.  Borrower will usually have to bring money to closing to pay down payment, fees, liens, taxes, etc above and beyond what lender funds don't cover.  If borrower doesn't bring money to closing you as lender lent too much ... borrower doesn't have skin in the game.

@Lois S.

Good to hear borrower is going to pay the interest :)

There is no Release of Promissory Note.  A recorded Substitution of Trustee and Reconveyance (Sub & Recon) terminates the note and deed of trust.

Odd that title said they were done.  I don't think I have ever had to prepare a sub & recon myself.  I would call them and ask, maybe title expected escrow to prepare one.  I've done quite a few loans and escrow has prepared the sub & recon every time, they say they can't close without one.

Just answer the questions on the form.  Nobody cares about your life history.

Title/escrow can rely by law on your signed statement as to the 'Total amount to pay off contract in full', you should have included interest+plus other charges, not just principal.  If you say payoff is X and later after payoff say it is Y, what are they supposed to do, other than tell you to take a hike.

I would as you suggest talk to borrower, explain the mistake and hopefully they will pay.

@John Thedford

To introduce your services at the REIA don't YOU have to be a MLO?

Looks like this thing is law now:

https://www.flsenate.gov/Session/Bill/2018/00935

@Wai Chan

A lot depends on your relationship with the borrower.  Some of the people I deal with are very confrontational, others we have a drink and write checks to make the numbers work out regardless of the paper work.

I'd say if there is a good level of trust why doesn't the borrower just pay you for Y note from the proceeds of the sale without anything extra on the payoff demand.  That way the world is in balance and who gives a hoot what the paper work says.

You could get borrower to execute another deed of trust against the same property as X deed of trust submit to escrow, recorded or not, and add to payoff demand.  But if borrower is willing to do that, why won't (s)he be willing to just pay you for Y from sale proceeds.

@Wai Chan

Regardless of the technical answer, you can always ask borrower 'Hey, now that you have the money how about paying off both notes?'  Most people would jump at the opportunity to rid themselves of debt.

You are allowed to add monies above X on the payoff demand if that money was spend on things related to the X deed of trust...taxes, insurance, property maintenance.  This is a long shot (because you don't say what Y money was used for ) but if the Y note is for money you spent protecting X deed of trust then as a non lawyer I'd say yes, you can put it on the payoff demand.