Recording Payments for Note Seasoning? - Posted by PatrickMD

Real Estate Investing
#1

Posted by PatrickMD on April 11, 2000 at 23:16:09:

Thanks, John, that sounds just what I was looking for. I asked the bank teller if a photocopy of the check was appropriate and she thought it would be, because the name of the person as it appeared printed on the signed check matches the name on the mortgage as well as the note. She meant well, but it didn’t sound like it was enough. So, I thought I’d ask the pros. That’s a warning I’ll heed, too. When I was a teenager, one of my best friend’s father was a top Realtor with his own company. He collected escrow for clients as well. One weekend he didn’t come home. Not only did he take all the money, he left a wonderful wife and four of the most prescious kids to pick up the pieces! I didn’t understand the financial end of it at the time, but I sure understood the pain he caused! Thanks for the heads up.

#2

Recording Payments for Note Seasoning? - Posted by PatrickMD

Posted by PatrickMD on April 11, 2000 at 10:35:36:

We read in Judy Miller’s Note Structuring articles about being careful to record monthly payments to you so you can prove seasoned payments for future note sale. What are the details? Is there a minimum seasoning threshhold? Do payments have to be made a certain way, like notorized or on a bank cashier’s check? Is there a special bookkepping technique? Are payments deposited into a specially noted account? Sorry for all the questions. The checks are piling out of our mattress! We want to keep it all straight for note creation and for IRS scrutiny. We appreciate your knowledgeable input. Thanks.

#3

Re: Recording Payments for Note Seasoning? - Posted by John Behle

Posted by John Behle on April 11, 2000 at 12:42:02:

The best way is probably to pick up a copy of John Moren’s computer program “Notesmith”. Not sure if it is available here, but if not, there is a link to John’s site at mine. It is an excellent tool for keeping track of the payments, late fees, interest, printing 1098’s, amortization schedules, etc.

That program would provide an acceptable payment history, but you can also accomplish the same by using an escrow company to collect the payments and keep the records. The escrow company’s records may be more acceptable and believable to potential note buyers. In the long run, the escrow company gets pretty expensive and you still have to watch them carefully. Many escrow companies have run off with client funds in the past.