An interesting phone call...

I was talking with a customer in early November of 2017, and our conversation really illuminated the difference between Moneylender 2 and Moneylender 3.  They're using both versions side-by-side until 2018 starts and they'll just work in Moneylender 3 after that.

Customer: "I have a borrower that was way behind.  They just sold their business or something and they paid the loan.  How do I enter that?"

Josh: "OK, did they pay it off completely?"

Customer: "No, they paid to bring it current.  They haven't paid since May of 2016."

Josh: "OK, in Moneylender 2 we need to put in $0 payments for all the due dates that were skipped.  We can use the Auto-Generate Payment History tool to create them in one shot."

Customer: "OK, tell me what to do."

We attempt to use the auto-generate tool to add about eighteen $0 payments to the loan to satisfy all the due dates up through September of 2017.

Josh: "Oh, and we have to go into each of these payments and move the Date Received past the grace period from the Date Applied so you collect the late fees that are owed."

Customer: "It's showing that there's $900 due now…  All these payments are for the regular payment amount, not zero."

We discover that we missed a radio button option in the auto-generate tool and have to delete the payment records we created to go back and set it up with $0 for the amounts.

Customer: "OK, so how do I set it up in Moneylender 3?"

Josh: "Just enter the amount and date for the payment."

Customer: "That's it?"

Josh: "Yep."

Customer: "OK, I'm just going to do that then."

It was conversations like these in the mid 2000's when I first saw the need for a reimagined loan calculation engine.  As Moneylender's use grew, I eventually stopped hearing about new loan types.  Confident that I understood the breadth of the task at hand, I designed a loan calculation system that could handle all the situations that would be thrown at it, while fully automating the determination of all the different dates and amounts that might ever be needed.

Epic Thank You to CloudSmallBusinessService.com

Today I was checking the placement in Google for the Moneylender website. I clicked on one of the suggested search terms "loan servicing software for private lenders".  The ever-present Capterra was first, and CloudSmallBusinessService.com was second.  Moneylender was 5^th.  Since the second site was reviews of loan software, and not a competitor, I clicked it to see their Top 10 Loan Servicing Software for Private Lenders list.

I was astonished to discover Moneylender Professional at the top of the list.  I do my best to provide the easiest and most valuable loan servicing platform, scalable to any lender.  It is such an honor to be recognized publicly as the top software solution for private lenders.  Many thanks to Sam Smith for the vote of confidence in our program.

Moneylender 3 Beta Progress

It's been about two months so since Moneylender 3 was released in Beta.  There are a few people that are actually using it to service their loans.  In most cases, it's because the new capabilities allow them to better tailor the program to their loan structure.

A lot of the program is functional.  A new wizard that walks you through closing a loan and zeroing out the balance is almost ready.  In place of Moneylender 2's behind-the-scenes and somewhat arbitrary loan-zeroing routines, in Moneylender 3, you'll have a couple straightforward options to deal with surpluses and deficits at the end of a loan.  Another major result of the new calculation engine's transparency and adaptability.

The next section of the application to get attention will be the reporting system.  Reports get the testing and polishing needed to be ready to answer nearly every question a lender might ask of their loans, and provide the ability to create and customize reports to find answers to the most exotic analyses.

As reporting shapes up, the video and text documentation will commence and we should be in the big push toward production release.  There are a few capabilities available in Moneylender 2 that are yet to be implemented in Moneylender 3.  Most notably, Metro2 credit bureau reporting and custom fields.  These will all be added into the software before Moneylender 3 is officially released.

It has been exciting to work with the many lenders who have taken on the challenge of using the new program.  It is becoming ever more stable, and hopefully more people will step into the platform to broaden the scope of the beta testing period.

Going to Court over a Loan

Whether you're the one filing the lawsuit or not, a lawsuit means something is not going right on the loan.  Make sure you find a qualified attorney to represent you in court.  There may be a lot of fear and uncertainty if you are served a lawsuit, and you may feel financially threatened.  If you are filing the suit, there may be a lot of resentment and frustration. 

For a borrower that believes the lender has accounted incorrectly on a loan, the suite is the final step in attempting to correct the problem.  For a lender being sued by a borrower, the suite is a warning that the lender has not follower their obligation to service or account for the loan properly.  For a lender looking for a judgement against a borrower, the suit is the means to secure repayment from a borrower that has severely violated the normal repayment terms of the loan.

There are a few things that will definitely result in a loss for the lender.  If the loan contract conflicts with local or federal laws, parts of the contract may be invalid.  If the lender is not licensed by local authorities as a lender or as a debt collector, there may be fines, delays, or a judgement in favor of the borrower.  If the lender has done something illegal or the collateral was not legally secured, the loan might be thrown out entirely.  Don't break the rules or you're likely to get in major trouble.  Be sure you know the rules that apply to your loans from the outset of lending.

Borrowers often bring suits against lenders when they believe the lender has lost or misapplied their payments, or the charges are excessive or not in compliance with the agreement.  If you're about to sue a lender, do the paperwork in advance.  Find out exactly how much the discrepancy is between your calculations and the lender's.  If you have to go back 25 years through bank statements and loan histories, do it first.  You may discover that the accounting is accurate, or that the discrepancy is really only a small percentage of the loan.  It may not be worth the legal expenses to win a judgement.  Interest on $3000 that was not credited twenty years ago may only add up to a $500 difference in loan balance.  If the payment was applied three months late, the difference in balance may only be a few dollars, even after twenty years.  Do the math before filing to suit to know exactly what you stand to gain.  Software like Moneylender will help you get an accurate balance on the loan.

I've talked with a handful of lawyers regarding their lawsuits from both sides of the loan.  What a judge really wants to see is an accurate accounting of the funds of the loan in a way that matches the wording of the loan contract.  If you can furnish the contract, as well as the ledgers that follow the terms of the contract, the judge is very likely to dismiss the lawsuit or rule in your favor.  Judges have requested that the accounting be produced by loan accounting software like Moneylender, and may not be willing to accept an Excel spreadsheet as the ledger.

Avoid the headache entirely with continuous, professional servicing.  Using Moneylender to service loans, sending monthly statements consistently and complying with tax reporting requirements not only ensures the borrower pays to the very best of their ability, but avoids a discrepancy between what you think they owe and what they think they owe.  Avoid the disagreement, avoid the lawsuit.

Manual vs. Automatic Loan Calculations and Management

There's a huge commitment of authority whenever you automate something.  A simple example would be the transmission in a car.  With a manual transmission you can personally optimize the torque and fuel efficiency of your drive at the expense of doing extra work to choose throughout the drive which gear best suits the current situation.  With an automatic transmission, the decision about how much torque the engine needs to produce is handed over to the routines created by the engineers that made the car.  More thoughtful, tested, adaptive routines can make the car more efficient or give better performance or both.  If the automatic transmission is rough or inefficient or unaware of the kinds of roads you usually drive or your driving style, the experience can be unpleasant.  When you choose an automatic transmission, you're putting your faith in the car maker to build a system that can shift the gears at least as well as you would have.

Loan servicing software is like that, too.  It's no small commitment to choose a loan servicing program to manage your loans.  If the engine can't do the math the way it need to, you will see limited benefit from the system.  If only some of the calculations can be automated you may find yourself having to maintain data separately from the rest of the records.  If you want to do something with the data that isn't built in, it may not be possible to extract the data in the format you need.  It's no small step to put your loans in one servicing platform, to the exclusion of all others, and also to the exclusion of doing things manually.

I take this responsibility very seriously.  Building a platform that can host your loan data and fully automate as much as possible is my goal with the Moneylender system.  I want the solution to be turn-key for every lender.  From creating and on-boarding loans to payoffs and taxes, the platform needs to know what's happening and accommodate it all seamlessly.  Just like the transmission in my wife's car will shift up when going down a steep hill to keep from gaining too much speed automatically, my software needs to recognize what's happening on the loan before the user does, and provide the right responses for the user to interact with.

Taking the plunge to a loan servicing platform is a commitment.  We promise to back up our side of that commitment.  To automate properly and efficiently, to be responsive to your needs, and to provide ongoing enhancements.  Our software is designed around the feedback we get from our users.  Be a part of the conversation.  Call or email us with comments and questions.  We're listening.

Getting Started with Your First Loans

So you find yourself with a loan or many loans.  Maybe you sold a house, maybe you inherited a portfolio.  Your hope is that borrowers will pay the loans promptly and consistently.  You know there are a lot of laws that govern loans and collecting debts, but you're not fully acquainted with the details.  You know you'll have to report your income, and that sometimes the loan will affect the borrower's taxes, too.

Don't worry.  We're here to help.

Moneylender Professional includes free phone and email support.  We get lots of questions about what a lender is supposed to do.  We're happy to share what we've learned talking with hundreds of lenders since 2004.  We want you to be as successful as our other customers have been, and we want you to maximize the return, stability, and value of your loan portfolio.

The first thing to do is to get yourself set up with our Moneylender software.  Loans require complex calculations, and if there's a mistake it can cause lots of paperwork through amended tax returns for borrower and lender.  Our software will make sure your interest, fees, and escrow are tabulated properly.

In a perfect world, borrowers would sign a thirty year mortgage, and then make 360 perfectly timed, identical payments without even a hint of a reminder.  In reality that's asking a lot from a human being.  We are all more consistent when we have friendly reminders and can see the progress we're making towards our goals.  Your borrowers will be far more likely to pay consistently when they receive routine account statements and can see the progress their making toward paying back their debts.  Moneylender comes with a variety of professional, customizable statement and letter templates.

Unlike virtually every other company in the market, Moneylender Professional has no annual costs.  Purchasing the license is a one-time fee and our pricing model works for all sizes of lenders so even individuals can handle the purchase of a copy of the program.

And remember, when you buy Moneylender, our staff is available to help you use the software successfully.  Call or email with any questions.

Moneylender Professional

Loan Servicing Software for Lenders Big and Small