Two years into a note I carried, the county nearly sold the house for taxes

The servicer point is the whole post. I pay about 30 a month per note for servicing on the two I carry and it buys me escrow collection, tax disbursement, the 1098 paperwork, and somebody else's phone number for the buyer to call when he's short. I used to think that fee was me being lazy. It's cheaper than one 6,150 surprise.

Honestly quill, 6,150 that you can add to the balance if the note lets you is a light bill for this lesson. The thing that scares me in your post is the 14 months with no insurance. A total loss there and your collateral is a vacant lot with a slab, and your buyer walks away from a note secured by nothing worth taking back. The tax bill was recoverable. The insurance gap wasn't, you just got lucky on it.

Did you look at anything on him before closing? I'm reading everything about tenant screening right now and it sounds like carrying a note is that same job with a much longer tail. Two banks turned him down and I want to know what they saw.

hollow, do the servicers do the tax watching themselves or is that still on the note holder? Trying to understand what's actually in the fee.

Same principle on raw land, smaller numbers. Taxes on a 12 acre parcel I sold on payments run 340 a year, which is small enough that nobody escrows it and small enough that a buyer forgets it exists. I still ask for the receipt every January. Cheap habit.

Went through this twice. What does loss payee actually mean, is that different from being named mortgagee? I thought those were the same box on the form.

The part I didn't expect is that not paying taxes might not count as default. So a buyer can be perfectly current on the loan and still be destroying your security? That reframes what "on time every month" is worth to me.

The uninsured 14 months would keep me up. I've been in houses after fires and after a supply line lets go on a second floor, and the second one alone is 40 to 60k of work by the time you're done with the flooring and the drywall. Your buyer with no coverage and no cash isn't fixing that. He's mailing you the keys and you're the one holding a wet house.

Running cairn's number out, 30 a month for 20 years is 7,200, which is more than quill's tax bill. But the servicer also collects the payment, tracks the amortization, handles the year end statements, and takes the phone call. If I'm choosing between paying that and doing it myself on a spreadsheet, the spreadsheet is where the escrow gets forgotten.

Question about the balloon. You're three years from it now. Does the 6,150 you advanced get added to the payoff, or did you just eat it? And if it's added, is the buyer going to be able to refinance a balance that's higher than he expects? Seems like a small problem that turns into a bigger one on a specific date.

Also worth knowing if you ever want out of the note. I've been learning how paper gets bought and sold, and delinquent taxes on the parcel are one of the first things a buyer of the note checks. A clean pay history with two years of unpaid taxes behind it prices worse than a slightly messier pay history on a parcel that's current. anchor's question about whether the advance rides on the payoff matters for that too.

We manage for a couple of owners who carried notes and every single one of them found this out the same way quill did, by mail. One got the notice from the insurance carrier instead of the county, which was luckier. Nobody discovers it because they were checking.

Twenty years of holding land has taught me that the only obligations that get met are the ones somebody verifies. Your note said he shall pay the taxes and he shall keep it insured, and shall is a word with no teeth unless there's a receipt attached to it. escrow it and go back to not thinking about it, which is the reason you carried paper in the first place.