Money order in the mail!!!???

Question

So yet another new (to me) dilemma in real estate investing.  I have a mobile that I have crwated a note on and the lady has yet to miss a month.  She has been late a time or two but always pays the late fee.  However this month she claims that she sent the money order in the mail as usual and doesnt know why it hasn't arrived.

Her money order usually arrives around the 6-7th yet this time she cliams to have sent this on the first or second.  I find this questionable becuase how do yiu not know what day you went o the post office and a calender does the rest.

I would like to know if anyone else has been in this situation and if so how do you verify one way or the other.  I said we'd give it until the end of the week and after that I'd need to see the receipt for the money order.  My thought o  that is that it'd be fairly easy to get a money order then return it and then you have a dated receipt.

Any advice guys

Account Closed · Answer

The new regs allow an individual or estate to seller finance one deal per year and it's exempt from Dodd Frank and CPFB regs requiring a licensed mortgage originator and from ability to repay requirements.  Then there's 3 deals per year an entity can do without licensed origination, but you must document borrower ability to repay.  None of this addresses the servicing issue and collection requirements in the new regs.  I haven't found anything that makes these deals exempt from the servicing and collection regs.  The regs are quite specific and IMO it is unlikely a seller financing individual could properly notice and communicate with the borrower, provide the correct and timely statements, have the required toll free 800 phone line, etc.

I'm not confused about the exemptions and am planning to use them.  But the servicing and collection requirements on these loans does not appear to be exempted.  If that's so, you can't just call the borrower and ask what's up. If someone has a different take, I'm all ears.

Leslie A. · Answer

Ivan,

I would ask for a copy of the money order receipt.  If she produces it, I would wait a while and see if it comes, then check the postmark date and charge late fee accordingly.

If she can't produce the receipt, I would assume she is lying about sending the payment.

Also - on the SAFE act - isn't it true that you can have up to 3 loans per year under Dodd-Frank? And under SAFE Act - here in Texas I believe we're allowed 5 per year.  So, why can't I do 3 loans per year?  I hear a lot about how we can't do them, but no one talks about the exceptions.

Jon Holdman · Answer

No.  She should go file a claim TODAY if you're going to cut her any slack on the payment.  You should ask for proof the claim has been filed and a copy of the receipt for the original money order.

I realize there are risks, but I have tenants deposit the money directly.  There are several services to do this.  I would insist the tenant uses one of these services.  If she refuses, she takes on the risk of using the mail.  My lease says the payment must be in my hand by the due date (the 4th) or else its late.  All risk for using the mail is on the tenant.

Jim Johnson · Answer

we get hundreds of payments every month via mail, and sometimes things get sideways and the mail is late. We operate on a postmark rule, where we call the payment good if it was postmarked one day prior to the due date, unless the due date was a weekend or holiday, and then it is postmarked the following business day.

So- our payment is due the 5th, which is maybe a Monday. We would then allow for the following- The tenant mailed on the 3rd, late in the evening- the mail does not run on Sunday- so it was processed on Monday. So if the postmark is prior to Monday (the 5th in this example) we call the payment on time. I can not hold a tenant liable for the actions, or inactions of the post office.

One thought on certified mail- sometimes the line at the post office to be serviced is... well- LONG. Very long. Think- Christmas. If you are lucky and have lots of properties, for instance we get checks almost every time we visit the post office- you can look forward to standing in line- every visit.

So prior to imposing a new rule or requirement- know the mail arrives, the post man prints a slip, puts it into your mailbox telling you of mail waiting for you at the post office, and now you get to wait in line for the mail he could have delivered when he delivered the notice...

Jordan Thibodeau · Answer

Sending it certified mail would prevent this from happening because she can give you a tracking number to verify the location of the letter. Either way, it's her responsibility to get the rent to you, so if it's not in by the end of the week, she still owes you the rent plus late fees.

Wayne Brooks · Answer

Kristine Marie Poe

I'm not sure exactly how the Safe act dealt with this before 01-10-14, but I'm guessing the OP needs to do some research.   I just thought I'd drop the grenade and run.

Ivan Burley · Answer

Thanks everyone for the advice.  I admit that I have more learning to do when it comes to real estate in general.   I'll be gettin a receipt for the money order and will be takeling the necessary steps to handle the issue.

Rachel H. · Answer

I've experienced this issue before. The best thing to do is get a copy of the receipt and have them call the customer service number to make sure the money order has not been cashed. If not, set a date to see if it turns up. After that date, you'll have to make arrangements with them to make another payment if the prior payment has not been received.

Hope that helps!

Bryce Y. · Answer

To add to this, there is a number on the money order you can call and check on the status, whether it has been cashed or not.  I had this problem once before, and now I am trying to get away from snail mail as much as possible.

Brian Gibbons · Answer

http://www.biggerpockets.com/forums/517/topics/126483-california-mlo-is-available-for-seller-financed-deals

Here's my RMLO

In California, contact Terry Lewis.

Money order in the mail!!!???

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