Payor Checking Account Drafts - Posted by John (TN)

Posted by Chuck on August 30, 2003 at 15:59:49:

Here’s one I’ve used, and haven’t seen mentioned here before (damm if I know why I waited till now either).

When the home is in a park, the buyer is also paying lot rent (no big duh there)… I’ve set notes up to where they paid the PM (what they owe me) at the same time that they pay their lot rent… and the PM forwards their payment to me.

This has a couple of benefits. They can’t say they forgot… because it’s due with the lot rent… and the PM is more likely to let me know of any problems much sooner (such as they’re in default on the lot rent and thus the contract).

Payor Checking Account Drafts - Posted by John (TN)

Posted by John (TN) on August 30, 2003 at 15:26:21:

Is anyone currently drafting payments from their payors’ checking accounts? I’ve heard mention of numerous techniques whereby payors are given a stack of deposit slips, etc., but relatively little is mentioned of checking account drafts.

If any of you are using this technique, how is it working for you? Does anyone see a downside that suggests this might not be a good plan?

It seems like there would be a lot of benefits. Payors need not be depended upon to remember where to send the payments, write the check, buy stamps, etc. If the money isn’t in the account at the agreed upon time, the draft bounces, returned check charges accrue, default language in the note could be triggered and so on. “I forgot” and “the check is in the mail” are removed from the list of potential excuses for non payment.

The only obstacle I see is that a fair number of MH note payors may not have checking accounts.

Nashville, TN