Carried a 62k note with no amortization schedule, then lost the payoff argument

Before anything else, did the ten year balloon survive this or did he just refinance out at 26 months and end it? Wondering whether you got any of the interest you were planning on.

The late fee part is the bit I'd have gotten wrong too. I assumed a fee in the note is a fee you can collect whenever. Sounds like it's more about whether you ever acted like it mattered.

This is the whole argument for paying somebody 25 a month to run the loan. Boring, cheap, and the statement exists whether you feel like making it or not.

I had a version of this with a tenant, not a note. Paid partly in cash for two years, I kept receipts in a folder, and when we disagreed about a month in the second year I could not prove my side any better than he could prove his. Same failure, smaller number.

The notebook is the problem. Not the amount in it.

So 5,000 on a 62k note is roughly eight percent of the balance gone to a record keeping gap. That's more than a year of the interest. Puts the servicer cost in perspective for me.

Didn't know third party note servicing was a business you could just hire. Who are these companies, banks or specialty shops?

Starting from nothing here, so genuine question. When you say amortization schedule as an exhibit, does that mean a printed table of all 240 payments stapled to the note, with both of you signing it?

@beacon they're specialty shops, and there are small local ones in most states plus a few national ones. Some also handle escrowing for taxes and insurance. Licensing for servicing varies by state, so anyone thinking of doing it as a business should check their own state rules before taking a dollar.

The dispute wasn't about the money, it was about which document controlled. You had a note with a payment amount and no schedule, and a course of conduct that contradicted whatever the note implied. When those two disagree the party who wrote the ambiguity usually eats it.

Every note I've been on either side of has an amortization schedule signed as an exhibit and one sentence saying that any amount received above the scheduled payment applies to principal, or applies to the next installment, or is refused, pick one. It's a single sentence. It's the sentence that would have saved you 4,700.

@ember yes, literally the table, either printed out or referenced by a stated payment count and initialed. It also gives you a running balance you can point to on any date without rebuilding anything.

Who normally sets this up in a seller-carry deal, the closing attorney or the title company? Seems like something that should be part of the closing package by default.

I pay between 18 and 30 a month per loan depending on whether taxes and insurance are escrowed. Five years in I've never once regretted it, and the year end statement alone is worth it at tax time. My CPA used to charge me more than the servicer costs just to sort out my own records.

The clause you're missing has a standard name in most forms, prepayment application. Half the notes I read have it and half don't, and the ones that don't were almost always drawn quickly off a form.

One thing I'd add to your list. The note should also say what a partial payment does. If your buyer sends 300 in a bad month, is that a default, a partial credit, or nothing? Accepting it without saying anything is how you end up in the same argument you just had, one year later.

I'm still working out what an amortization schedule actually is. Is it just the month by month split between interest and principal, or is there more to it? Because the way you both describe it, it sounds like the schedule is the thing that makes the balance a fact instead of an opinion.

@vellum that's exactly what it is, and your last sentence is better than most explanations I've read.

halyard, my near miss was insurance rather than payments, but same root. I never asked for proof of anything after closing and only found out because I got curious. Carrying a note is a job with monthly tasks. I went in thinking it was mailbox money.

Filing this away. Everything is new to me and I would absolutely have kept the notebook.