I’m considering using a note serving company called Note servicing Center out in CA. They charge $25 per month with a $50 set up fee. I an currently using Terra Notes and as I build my note portfolio I am sick of managing it. Plus, I am too nice and tend to feel sorry for people. LOL.. Unfortunately, people take advantage of that and I’m done.. Definitely considering handing it over to one of these companies. Anyone have experiences they can share?
Note Servicing Companies (collect payments for notes you are holding)
Madison Management
FCI Lender Services (very well known)
Evergreen Note Services
Note Servicing Center
I’ve been using FCI. They charge $20/note for their baseline fee. It’s kind of tedious to get set up. But once you do get them set up, they are very professional. I’ve also found that note buyers really like it when you use a service like FCI instead of a DIY service.
I currently use 4 servicers: Note Servicing Center, FCI, Madison Management, and Allied.
If you are creating notes yourself have the borrower pay the monthly servicing fee. I haven’t had any borrowers push back on this.
I second Madison - we’ve been using them for a couple of years now and they’ve been great!
Yes, I have used Pioneer Title Agency in Arizona. They have their own note servicing and collections. They set up the note and servicing for me when I closed the property sale through them, and my buyer pays all the fees. I’ve had no issues so far, I just see a deposit in my bank account every month.
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Is your property in California? If so, you could try Del Toro Loan Servicing. It’s been many years since I used them, but I had a good experience when I did.
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One of the biggest reasons to use a note servicer rather than a DIY is that you have third-party verification of payments in case you ever decide to sell the note. Also, they send the 1098’s at the end of the year automatically.
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I usually charge $9.99 for a servicing fee when using Terra Notes. Note Servicing Center charges $25.00. I’m a little nervous to tack this on since I didn’t add it to her contract. Do you prepare them beforehand?
I charge $15/mo as a servicing fee for my seller financed deals. It’s totally reasonable for you to do this. If you didn’t mention it anywhere in your loan docs, you’ll probably want to find a place to mention it on future deals (even if it’s a separate, standalone disclosure statement where you can point back to it and show them that they agreed to it).
As for this one deal, you could just tack it onto the monthly payments and show the breakout of how much they’re paying in P&I and how much of it is the monthly servicing fee. If they throw a fit about it, you could explain what it’s for. If they decide to go crazy and start a war over it, you could remove it and just take it on the chin for this one deal.