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The end of the affair

October 4, 2011 By

Well finally! The last payment check is cashed. The loan’s done, end of discussion, right?

Well, not exactly. As the beneficiary, it’s incumbent on YOU to make sure the loan is removed from the public records. The good old days of saying thanx & forgetting about it went the way of the tri corner hat. By law you are required to submit the original note & request for full reconveyance to the Trustee (listed on the Deed of Trust), along with the (maximum allowable) $45.00 plus the recording fee ($10.00, give or take) along with instructions to record the reconveyance & provide the address for the (ex)borrower for return mailing. You can charge the borrower for these fees as opposed to paying them yourself. That said you need to document your file with the request for $$ & hold off returning his note & T.D. directly to him. The mortgage burning party just pollutes our precious environment.

Perhaps you prefer to collect the $45.00 yourself. You fill out (& have notarized)  a Substitution of Trustee & deed of reconveyance, mail it to the recorder, & put copies in your file.

If for some reason, the borrower chooses to have you mail the original documents back to him directly. You need to have his request  in writing in your file.

Jeff-practice-VN810006 a nickle for every phone call we get asking about a loan that was paid off 10 or 15 years ago & never reconveyed, I would be a very wealthy hombre. The big problem here is with such a stale file, we have nothing left to do with it, nor can we get ahold of the beneficiary. The borrower has a big problem he shouldn’t have to solve.

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Late Charges for fun & profit

September 14, 2011 By

While on the face, it is a simple topic, as with most anything in the land of fruits & nuts the devil is in the details.

While the regulations mandate a minimum 10 days as a grace period; you need to be sure you use all your fingers.

The payment is due on the 1st, late on the 2nd, 10 days later is the 11th. This example illustrates the grace period is actually 11 days.

Here’s some more good news. Per our benevolent fathers, any payment received within 10 days, either before or after the due date is considered a current payment. Again, the payment is due on the 1st, the payment shows up 50 days late. The payment being made is considered the current installment as to the late charge due. Taken a step further, every subsequent payment is made within the grace period; you can only charge one late charge. Beware of “rolling lates”

As to a late charge on a balloon payment. The same rules apply as to the grace period. Additionally, the amount charged can’t be any more than any other late charge called for on the note. No more unreasonable late charges.

In order to be enforceable, YOU MUST PROVIDE WRITTEN NOTICE MONTHLY OF THE LATE CHARGE INCURRING meaning either the payment coupons you use or the payment book you send back & forth must show the date the late hits.

One other item to consider; don’t file a notice of default within the grace period of the 1st payment late (as if). The grace period will negate the filing.

Be careful out there.

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