Posts

Showing posts from October, 2016

What's New for the 1098 Form

Get ready for a few changes for tax year 2016… at least when it comes to your 1098 (Mortgage Interest Statement) form. For people who manage and service loans, new reporting requirements will be in effect. Luckily, they're straightforward:
·Starting January 1, 2017, all 1098 forms given to payers MUST include the address or description of the mortgaged property.
·Also new to the form in '17:
oReporting the outstanding mortgage principal (as of January 1, 2016)
oIncluding the mortgage origin date
oIndicating paid mortgage insurance premiums of $600 or more
The 1098 format has also changed. In previous years, three forms were on a page. The newest version will have only one per page.
These aren't dramatic changes for lenders, but you should be aware of them. Moneylender Professional loan servicing softwareplans to issue a patch for the new 1098 form in November. Look for it so you'll be ready when tax time rolls around.

Throw Out That Amortization Schedule (Maybe)

When discussing loan topics from A to Z, amortization falls near the very beginning of the alphabet. It's a straightforward concept. An amortized loan schedules identical payments that cover both principal and interest. Typically, each installment's funds pay interest first. Principal is paid down and reduced by whatever's left.
Initially, a large proportion of an amortized loan goes towards interest. But with each standard payment, principal reduces a bit. The proportion of interest paid in each installment decreases over the course of the loan. By the end of the term, most of the installment goes to principal, and very little goes to interest. This means that, throughout the life of the loan, principal and interest have an inverse relationship.
You can see this pattern play out beautifully in an amortization table displaying the payment schedule over the entire course of a loan. For each installment, this generally includes:
·Amount due
oAmount that's interest
oAmount t…

Moneylender Professional 3 Is Coming Soon… Here's a Sneak Peak

Since Friday, October 14, Moneylender Professional 3 has been available for preorder to Moneylender 2 license holders. MLP 3's Alpha version will be downloadable on October 31. People have already started calling, wanting to know more. Check out some user questions and our answers.
Q:Will MLP 3 be online or desktop?
A: It’ll be for Windows desktop.
Q: Does the software provide IRS online filing template for 1098s?
A: Yes, we plan to have IRS FIRE (the electronic file format for 1098 and 1096 forms) implemented by the time MLP 3 is ready for production use.
Q: Can I get a demo of the new upgrade before committing to buy the new version?
A: We're not planning on having a demo version available until the production release. When Moneylender 3 is production-ready (January or February), we’ll have a demo mode you can try out before buying the upgrade.  If you preorder Moneylender 3, you’ll be able to download and play with the Alpha and Beta versions sooner.
Q: Is it possible to run MLP2 …

Deferring a Loan: Who Wins?

When a borrower gets too far behind, the credit score is affected. Sometimes a lender helps out by offering to defer a payment, moving it to the end of the loan. That extends the loan a little, but it could be just the breathing space the borrower needs. By the following month, the loan is back on track.
If the borrower agrees to defer the loan (usually in writing), the lender can convert the unpaid interest to principal. The lender may also choose to adjust the payment amount due for the remainder of the loan.A common mistake is to think the entire amount due can be added to the principal balance in exchange for deferring one or more payments. This isn't correct.Only the outstanding interest should be converted to principal.
Moneylender Professional loan servicing software makes it simple to defer payments using the Loan Menu.The borrower gets to stay current on a loan when finances are too tight to continue making payments, and the lender gets to capitalize some interest.If done …

Blindsided: How to Add Principal to a Loan

Best-case scenario: your lenders pay on time, and funds process smoothly. Everyone's happy. Unfortunately, it doesn't always work that way. I recently talked with a Moneylender Professional loan servicing software customer who had a stressful experience. A borrower didn't pay property taxes. By the time the lender discovered this, a tax sale was imminent.
That would have put the lender in a bad situation: holding an outstanding loan on a house that the borrower no longer had access to. The lender jumped in to pay the taxes, saving the day. But that raised two more issues. How would the lender recoup the expense? And could he keep this problem from happening again? The answer to both, happily, was "Yes." Moneylender Professional was able to help.
Actually, there are several ways Moneylender can handle this situation, depending on the borrower and lender's agreement.
·The repayment could be accomplished with one lump sum.
·The amount could be tacked onto the princ…

Moneylender Professional 3: What’s New?

Moneylender Professional 3 loan servicing software is making its debut in 2017. The software’s creator, Josh Whitman, answers some questions to give you background and insight into the latest version. 
Why release Moneylender Professional 3 now?
Since its release in 2004, Moneylender’s user base has grown and grown. The lenders using our software deserve to have access to the latest innovations of modern technology. Some borrowers even demand it. 
Moneylender was created as a hobby project, but it’s become a major component of our business model. We’re serious about the role the application plays in the daily operations of hundreds of professional lenders. Many of our customers are casual lenders, and that’s great. But an ever-growing population of large businesses are using Moneylender to power their financing activities.
What are some of the changes between versions 2 and 3?
We've made a major change in storing loan data in order to:  Reduce inefficiencies in the original. Work mo…