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Businesses Increasingly Adopting Moneylender

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Our loan software is finding a steadily growing place in core business accounting.Small and medium businesses are finding all the tools they need to handle their loans, and enterprises are even stepping in to apply Moneylender to their huge volumes of loans.Moneylender doesn’t care if a loan is $1 or $1B, it just does the math, but for the creators of Moneylender it is a gratifying statement of public approval that billions of dollars are flowing into and out of the software.
...a versatile software system that can handle enterprise-grade volumes of data...
Moneylender has always been useful to small businesses and larger businesses that have a manageable amount of loan data.In its early days, Moneylender didn’t have the tools and workflows that would make it a viable system for large businesses, businesses that make dozens of new loans every day, or businesses with tens of thousands of loans.That humble past has given way through constant enhancement, extension, and revision to a ver…

Making Unsecured Loans for (Reasonably) Safe Profit

I had a phone call with a potential customer the other day.They were looking for some software to manage their loans as they start a relatively new lending business.After finding out more about the type of loans they planned to make, the typical amounts, repayment timelines, etc. I confirmed that Moneylender Professional would be more than adequate to handle the task.  Our conversation moved onto the business of making loans well.
This lender asked how to make sure the loans get repaid when the debt is unsecured.How do you decide who will get your money to make sure that you always get paid back?We talked about it for quite some time, and we came up with a few key ideas to answer this question.
Is the need for the loan prudent? First, is the borrower trying to pay routine bills, or is the loan for something unexpected and urgent?If the borrower is just restructuring debt, that’s probably a job left for banks or credit cards.Paying utilities or rent?These are signs the borrower isn’t …

Get Organized with Loan Servicing Software

Many people end up with a loan and think that it’s totally manageable to do the math themselves and keep track of it all in Excel.For a while, things are going pretty smoothly.Annual tax season comes around and the crunch to figure out what numbers to report to the IRS and your borrower, and after a little digging, we get some numbers that look right.For a time, things are great.
Then the borrower want’s a payoff quote, or needs to show a recent statement to someone, or they start missing payments and catching up, or the late fees are getting lost because there isn’t an easy way to stay on top of them.The numbers for the IRS are harder to dig up.Maybe the borrower files bankruptcy and the court needs detailed documentation, or you have to foreclose and more documentation is required.Maybe there’s a dispute, or an adjustment, or some other change that starts to break the consistency of the formulas in Excel.
That’s when you need loan servicing software.Good loan servicing software wil…

Big Thanks to Mike Ruscica and NoteConference.com

I want to share some info about my friend and advocate, Mike Ruscica.Mike is an investor and investment coach from New Jersey that dedicates his time teaching others how to invest in notes.I’ve seen firsthand how his techniques have generated tremendous returns.Several years back, Mike was chatting with a mutual friend and mentioned he was using a certain software to track his loans. Our friend suggested he give Moneylender Professional a try.Mike made the switch to Moneylender and has been referring his people to my loan servicing software ever since.
I got to know Mike over the years as he would occasionally call with questions about how to set up various scenarios in Moneylender.Mike runs a week-long conference called NoteVision where he has presenters covering all kinds investment topics.I tricked him into letting me present the soon-to-be-released Alpha version of Moneylender 3 at his conference in 2017, and that was the first time I ever met a Moneylender customer face-to-face.…

Handling Escrow on Your Loans – 3 of 3

Special Situations Check out part 1 – The Rules for Lenders and part 2 – How to do Escrow in Moneylender
Now that we know how to determine the periodic escrow amount and what the allowed amounts are, let’s talk about some situations that commonly come up over the life of a loan in the real world. Pre-Funding the Escrow Account on a New Loan Loans are originated at all times of the year, and property taxes and insurance premiums can be due at various times of the year, too.Sometimes the loan is opened and the property taxes are due almost immediately.When this happens, it is common and appropriate to require a deposit to the escrow account as part of the loan closing.Although a lawyer or escrow company will usually figure out the numbers, you can easily determine a reasonable deposit amount yourself.
Taking the amount to be paid in the future as the “expense”, the deposit amount is the expense minus 1/12th of the expense for each month from when the loan closes to the month when the ex…

Handling Escrow on Your Loans – 2 of 3

How to do Escrow in Moneylender Check out part 1 of this Series – The Rules for Lenders
Moneylender can happily determine the correct amount to add to each P&I payment so your escrow balance conforms to the regulations.Moneylender already knows the payment schedule and can determine how many payments will post to the loan in each month.You will need to tell Moneylender when you expect to disburse money from the escrow account, and how much you expect those disbursements to be.For tax reporting purposes, Moneylender also needs you to categorize the disbursements into Property Tax, Property Insurance, Mortgage Insurance or Other.
To do this, you select the loan, visit the settings tab on the right and click Escrow Account.From here we see all the pertinent information including the escrow balance, upcoming disbursals, and the current and future escrow charges.Click Manage Disbursements to add, change or confirm the money you have or will be paying out of the escrow account.If the pa…

Handling Escrow on Your Loans – 1 of 3

The Rules for Lenders Tracking escrow on mortgage loans is a big deal, and an important part of servicing loans properly.  There are a lot of moving parts to doing it correctly.  What are the rules, how do you track the information about payments you’ve made and will make in the future, how do you decide how much to charge each month so the amount you have in the escrow account is reasonable and legal, what about sending the correct documentation to the borrower and the IRS?  Making a mistake can call into question the validity of your calculations, expose you to fees or penalties, or even put your collateral in jeopardy.
The United States government enacted the Real Estate Settlement Procedures Act (RESPA) in the mid 1970’s to help consumers understand the costs of getting a loan as well as regulate practices that were padding extra fees onto new home loans.The law also limited how much money lenders could require from their borrowers to keep in an Escrow account.
What the law says is …