Let’s talk about the importance of paying for licensed servicing companies to handle your loans.
There are some dangers that are involved with self servicing your loans. I know that a lot of note investors do, so let’s back up a little bit in case you might not know what servicing companies and servicers do.
Servicing companies are an integral part of your exterior team. They are licensed debt collectors, and they handle not only communication with your borrower, but they are the company where the borrower sends their monthly payment. The servicing company takes that payment and records it against that borrower’s loan, and then disperses that money, that payment, out to you every month.
It’s not illegal to self service your loans. However, sometimes you get a borrower that is going to challenge the accuracy of your records, and that can become complicated. When you have a servicing company that is a licensed debt collector, they have well documented records that will protect you.
Avoid the “he-said-she-said” situations that can cause you to lose the argument by servicing your own loans, and instead work with a licensed servicing company to secure your invested dollars.
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Paige Panzarello is the “Cashflow Chick”. Having been a Real Estate investor and entrepreneur for almost 25 years, Paige has experienced many facets of real estate investing. Her experience includes founding and running her own Residential and Commercial Construction and Acquisition companies, Buy and Hold residential and commercial real estate investing, Tax Deeds/Liens Investing, Fix and Flip (Residential Remodeling), and other forms to name a few. She currently focuses on Non-Performing Notes that she purchases all across the United States. Whether in notes, residential or commercial real estate, in California, Arizona, or nationwide, Paige has been successful in completing over $150 million in real estate transactions to date.