Why Choose Moneylender Professional Instead of Other Loan Servicing Software?

 

It’s no secret that there are lots of options when it comes to the software that will calculate and manage your loans.  With so many choices out there, what makes Moneylender the right choice for you?

Value

First and foremost, Moneylender is an absolute bargain compared to most other solutions out there.  One of the few professional options with a one-time cost for a license, Moneylender asks only a reasonable up-front payment and doesn’t continue to drain your revenue over time.  We do offer companion services that integrate with Moneylender, but all of them are optional, and their rates are among the lowest in the industry.  Our pricing is set so that it’s pretty much impossible to pay less for so much.  There are less expensive solutions out there, of course, but you won’t be getting the feature-packed powerhouse you get with your license of Moneylender Professional.

Control

Moneylender is a tool that simplifies all the steps you’ll take when servicing your own loans.  Other solutions might have more streamlining, but it is usually at the expense of control over your loans.  Your loan data stays on your local computer (unless you subscribe to our optional portfolio hosting service) where you can guard the computer from theft and manage your backups.  No worries about a data breach compromising your lender and borrower details, or someone tampering with your records.  With Moneylender you decide what lives and dies in your loan records.

In the same token, Moneylender's calculation engines will handle virtually every scenario automatically to determine an accurate balance in accordance with the terms of your loan contract.  Nonetheless, if you decide to deviate from the terms for any reason, whether it’s to waive a late fee or forgive principal, Moneylender has all the mechanisms to let you indicate changes of all types to your loans.  Even the automation systems have all kinds of adjustable values to let you fine-tune the calculations that Moneylender performs.  It’s not just about the letter of the contract, but also about your style as a lender.

Capabilities

Moneylender’s letter and statement system lets you set up templates for every type of letter, notice, and statement you might want to send.  You have all the tools to build a template for virtually any document.  And once you have a template, you just select one or more loans and print the template to create the letter or statement instantly.  Some customers create templates for their loan contracts and use Moneylender for the origination side of their business, too.

The reporting engines are similarly flexible.  There are hundreds of fields that can be used for columns on reports.  You can modify the reports that come with Moneylender, and even create your own from scratch.  Each report can be molded into the perfect set of numbers and information to answer you questions without any meaningless columns wasting space.

Moneylender has many extension features to let you use the program to do more.  You can attach files of any type to individual loans for easy reference.  You can track per-loan expenses if desired.  You can track your current inventory, including cost basis.  You can export a report for submission to the major credit bureaus.  You can use our optional AutoPay service to give your borrowers online access to their balance info and accept ACH payments automatically.  Add notes and reminders to a loan.  Automate wraparound loans from investors and track discount earned on purchased loans.  Export a FIRE file for the 1098 submission tot he IRS for mortgages.  Import payments and loans from Excel.  There are so many amazing and convenient features.  And all of these features were added as a direct result of customer feedback, so everything great about the program exists because lenders told us what they needed!

Customer Support

I’m the author of the software, the author if this article, and the guy who answers when you call or email for help.  I’m the guy talking in all the videos in the User’s Guide (and the person who wrote the User’s Guide, too!).  If you have a question about Moneylender, you bet I can get you an answer.  My customers often tell me they really appreciate that I’m here to help if you need anything.  You can see for yourself on the reviews that some of them have posted on other sites.  Whether it’s a phone call with someone looking at buying a license, or a long-time customer with a question about how to deal with a bankruptcy, I’m happy to chat and point you to the right places in Moneylender to accomplish what you need.  And these are the conversations where I learn what people want so I know where to invest my time to make Moneylender even better.

 A Great Fit

Of course, Moneylender isn’t a perfect fit for everyone.  Some people might want a company to actually do the servicing on their loans, or they want to do the math themselves in Excel.  For them, Moneylender is either too little automation or too much.

But I believe we’ve really hit the sweet spot for any lender that wants to do their own servicing, and doesn’t want to do the math by hand.  Most of our customers have between 10 and 500 loans, but there are customers with just a single loan, and even enterprise customers with more than 10,000 loans.  There are billions of dollars being serviced by lenders using Moneylender Professional.  And the program works for any currency, so it is used in nearly all English-speaking countries around the world.

If you’re looking for great loan servicing software to help you track your loans, I think you may have just found your destination.  If you email or call, I look forward to talking with you.  Thanks for reading!

Is It Smart to Service My Own Loans?

What is loan servicing?

Loan servicing is the process of collecting the payments on a loan, including all the documents, accounting, and tax requirements.  To service a loan you’ll likely be sending our statements and late fee notices to your borrower, calculating the balance on the loan over time, and sending annual statements for tax purposes, such as the 1098 mortgage interest statement in the United States.  It can also involve collecting funds into an escrow account and paying associated bills like property taxes and insurance, and providing an accounting to the borrower of the escrowed funds.

 

Is it hard to do all that stuff?

If you’re doing it by hand, then yeah, it’s pretty tough.  Getting an accurate loan balance and valid interest calculations that match the terms in your loan contract is actually a lot more complex than slapping payment amounts into a generic Excel amortization template.  Borrowers almost always pay something different from the regularly scheduled amount at some point, and often the timing of the payments will not be precisely to the day of the original schedule.  When these deviations occur, an accurate balance calculation involves much more complex management than you’re likely to be able to set up in a spreadsheet cell formula.

Our loan servicing software, Moneylender Professional is built to account for loans with as much simplicity and automation as possible.  Getting an accurate balance calculation in Moneylender is virtually painless.  Once your loan is set up so the amortization schedule matches what’s desired, you can just plug in the payments you receive and Moneylender follows the calculation rules to determine an accurate, legally enforceable balance.

Sending out regular statements is pretty much impossible to automate with Excel, save for just sending the excel file itself to a very savvy borrower.  Software like Moneylender Professional is built to streamline the statements so they can be emailed or mailed with just a couple of clicks.  That convenience scales painlessly when you have more loans, you just do the same clicks and send out the statements for all your loans in one shot.  The same applies to other communications like Late Fee notices.

When it’s tax time, reading the law and filling in your own tax forms is pretty tricky.  For example, the reported interest on a Form 1098 should include the collected late fees, but not other fees.  Also, the balance is the principal balance at the beginning of the year, not at the end of the year.  People are always calling in to ask why the numbers are wrong because they don’t know about these requirements.  A system like Moneylender Professional is built to follow the rules carefully and make everything as automatic as possible.  When it’s time to generate your 1098 forms, you can do it in about three minutes in Moneylender, including using our built-in service to file electronically with the IRS.  That’s three minutes whether you have one loan or 500 loans.

 

Should I pay someone else to service my loans then?

That’s really up to you.  Moneylender is a system for lenders that want to service their own loans.  It does all the math and reporting and accounting and even has a lot of extra features like managing attached files and reminder notes and tracking per-loan expenses.  People who use Moneylender are servicing their own loans, and Moneylender makes that process a lot easier to manage.

The alternative is to hire another company to service your loans.  This third party would send statements to borrowers, track payments and calculate balances on your behalf.  They would charge a recurring fee and forward the proceeds of the payments on your loan to you.  In fact, there are a few servicing companies that use Moneylender as the core of their business.

If you really want to be hands-off with your loans, hiring someone else to do the servicing is probably a smart move.  The people that choose to use Moneylender want to keep their loans in-house.  The hour or two each month to keep on top of their loans with Moneylender is easily worthwhile for the confidence of knowing exactly how your assets are performing.

Anyone who is reading about whether or not to self-service probably only has a few dozen loans or less, but Moneylender will happily grow into the thousands of loans with you if you are planning to grow your portfolio.

 

So self-servicing is cool?

It’s really cool.  But it sucks unless you have a solid structure to work with.  Trying to do it well with just spreadsheets is going to be a nightmare.  But a more specialized loan servicing program like Moneylender Professional can make servicing your own loans very manageable.  And it helps if the company that makes the software has really great customer service, too.  Give us a call or email, I bet you’ll be surprised how helpful we are.

 

Happy lending!

Josh Whitman, CEO
Whitman Technological
Author of Moneylender Professional

July 2021 – What’s Happening with Moneylender?

 Things that are in the works for our loan servicing software, Moneylender Professional.

 AutoPay Production Release is Delayed

Issues with the backing bank has held up development on the production release of AutoPay.  Development is stuck until the bank situation is resolved, so the AutoPay Production release is on pause for now.  Lots of cool features are already at least partially developed, so it’ll be awesome to get rolling again once the bank stuff is sorted.

 

Accounting Mechanism

A new feature set will be created for Moneylender that will allow users to create demarcation points for accounting purposes.  There has been a long-standing problem when it comes for balancing the books against Moneylender’s reports.  The accountants need the numbers to stay the same from month-to-month or quarter-to-quarter.  The servicers need to be able to retroactively adjust things like waiving late fees or correcting payments or settings.  These two needs are in conflict with each other.

A new system is going to be added that will allow users to set an accounting checkpoint for a specific date and Moneylender will record the balances and totals since the previous checkpoint.  Each checkpoint will also include an adjustment factor that represents the differences in amounts cause by retroactive changes to a loan.  This permanently formalizes and resolves the relationship between concrete numbers for accounting and retroactive edits for servicing.  CPAs rejoice!

 

Portfolio Hosting Service

A version of Moneylender that runs as a faceless Windows service has been in the works for a couple years.  An extension of this will be a new service where you can choose to host your portfolio on our servers.  Instead of housing your data on your own computer, we’ll house your data and ensure ongoing, off-site backups.

This service will be especially appealing to lenders that might need to travel and use different computers.  Especially so if there are multiple people working together.

 

Moneylender Academy

We’re planning on producing a series of videos structured like a Moneylender school.  This should really help with training new Moneylender users to get up and running quickly, and to make the most of what the system can do.  We’re thinking about having four level of topics, starting with the introductory and basics in the “Associates” level, and describing really niche and enterprise features in the “Doctorate” level.

At the moment, we only have one video up on our new Moneylender YouTube channel, but this is where we'll publish the academy videos when they become available.

Buttons and Levers for Lenders and Debtors

One Thursday afternoon, I told my son that I didn’t want to get anymore emails home from his teacher telling me that “he didn’t finish his classwork at school today.”  I further stated that if an email was sent that he wouldn’t be allowed to play computer games at all that weekend.

Near the end of the school day on Friday, my boy was close to finishing his work, but not quite done.  He and his teacher were having their daily argument about completing classwork.  That’s when my son asked his teacher not to write an email to me because he would lose computer.

Surprise, surprise, I got an email from his teacher that afternoon.  My son told me about what happened during the day, and I had to chuckle a little bit.  Here’s the approximate conversation that ensued.

Dad: If I give you a box with a huge red button on it.  What do you want to do with that button? 

Son: Push it.

Dad: It feels good to be in control of things, doesn’t it?  Like holding the TV remote or being the moderator on a multiplayer game.

Son: Yeah.

Dad: Being out of control is a scary feeling for people.  We all really want to feel like we are the masters of our circumstances.  It feels good to feel like we’re controlling the outcome of things.

Son: Ok

Dad: Your teacher’s job is to make sure that each of her students learns a body of knowledge during their time in fourth grade.  How do you think she feels when a student isn’t showing their understanding of that knowledge?

Son: Bad.

Dad: And do you think she might be scared that she’s not doing a good job if the student isn’t showing that they know all the stuff they’re supposed to know?

Son: Yeah.

Dad: When you told her that she could control your weekend access to video games by writing me an email, you put a big red button in front of her.  You showed her a way that she could have more control over you.  You hadn’t been getting your work done, and here is a big bright button that will make you want to do whatever she wants you to do.  And what happened?

Son: She pushed the button.

Dad: Yep.  That’s what’s happening when someone complains that someone else is pushing their buttons.  A person is using knowledge about some else to manipulate and control them.  I do that with you all the time.  I’m doing it to try to help you make good choices and develop into a person that will be able to thrive in the world.  Sometimes, people will push your buttons for their own selfish reasons.  Sometimes people will push your buttons for good reasons.  Why did your teacher push your button?

Son: She wants me to get my work done.

Dad: Is that a good thing or a bad thing?

Son: A good thing.  She wants me to learn.

Dad: That’s right.  She doesn’t want to hurt you in the long run.  She needs you to be able to get work done at school and she’s trying everything she can think of to guide you to make that decision for yourself.

Son: Yeah.  That makes sense.

Dad: Now what was your mistake here?

Son: Not doing my work at school.

Dad: Well, obviously that’s a problem, but I’m talking about the button.

Son: I showed her the button?

Dad: Bingo.  If you reveal ways that someone can manipulate your situation, chances are that someone will use those buttons to make you act or think the way they want you to.  We don’t need to fear people, or to keep secrets or hide things.  But we also don’t want to enter an interaction with someone by revealing ways that person can exert control over our choices.

 

We learn what our buttons are when people push them and we don’t like it.  And then we learn to limit peoples’ access to our buttons, so that people don’t just push them to manipulate and control us.  But that doesn’t mean our buttons are weaknesses or that pushing our buttons is wrong.

The glue to any negotiation between people, whether it’s an agreement to finish a worksheet before the bell rings or an agreement to repay a million-dollar loan over thirty years, is to communicate clearly and directly.

Herb Cohen’s You Can Negotiate Anything describes the process of communicating effectively when trying to construct an agreement with someone else.  Stephen Covey’s 7 Habits of Highly Effective People describes the painstaking process of uncovering a person’s true desires and motivations, or more accurately positioning yourself so they feel safe enough to reveal those desires to you.  Both authors are concerned with generating the most mutual success from any interaction.  And in both books, finding the path of greatest benefit comes from carefully understanding each other’s goals and motivations and balancing them with equal weight against our own.  Finding ways to make accommodations rather than concessions.

 

I’m in the process of slowly piecing together a chart that shows all the leverage between borrower, lender, myself and my bank for my AutoPay service.  Being able to clearly communicate the ways that the risk is controlled, mitigated, overseen and monitored for every payment that runs through my AutoPay service is an important step in ensuring the payment system is able to run effectively.  Illustrating all the buttons that a borrower can press on the lender, a lender can press on the borrower, the lender and borrower can press on me, and I can press back.  Even the buttons my bank is exposing by making this arrangement and my buttons that can be pressed by the bank.  All of these complex relationships require trust and disclosure to work well.  And also to account for the fact that sometimes people are going to be in a difficult situation, and will make some choices that don’t take into account the best interest of other affected parties.  It’s critical that the right set of buttons and levers are exposed so that someone making a bad decision doesn’t have the chance to create great harm to anyone else.

 

So where am I going with all this?  It comes down to the buttons and levers that we spell out in our agreements with our customers, borrowers, tenants… everyone we interact with from day to day.  In our loan contracts, we spell out which levers will be pulled and which buttons will be pressed under what circumstances. 

Banks make standard mortgages that have a well-defined set of button presses and lever pulls.  Many of Moneylender’s customers are making loans that are not required to follow the same terms.  It is often the case that a deal is struck between lender and borrower as the result of discussion about the unique situation to be financed and finding creative ways to put buttons and levers in the deal where the lender can use them to protect their capital.

 

The buttons and levers must be used with balance, and that balance must be integral to the agreement between borrower and lender.  Virtually every author I’ve read believes in the idea of cooperation, mutual benefit, collaboration, synergy.  The best victory is not where there’s a winner and a loser.  The best victory is where everyone wins.  Not through compromise, but through a deep mutual understanding of each other’s values and needs.

 

The practical application of this point is to communicate the essence of every button and lever with the borrower when exploring and formalizing the deal. 

If the borrower can’t pay right now, here’s how the lender will address that deviation from the ideal path.  Perhaps the missed payment can be overlooked.  Perhaps a fee is charged or interest is capitalized.  Perhaps the lender will immediately take possession of property or assume responsibilities from the borrower.  Is it more desirable for the borrower to bounce a payment or simply not make a payment?  Does the lender want the borrower to reach out by phone or email when a payment is going to be missed, or is there no desire for communication? 

If the borrower can’t pay for a long time, how will both parties address the situation.  Will collateral be collected?  Property taken over or sold?  How desirable or undesirable is a certain outcome to the lender?  Is the lender quite comfortable selling the borrowers house to cover the debt?  Does the borrower know that?  Rather than dragging out a bad situation for a long time, the borrower might have chosen to surrender property if they knew the lender really wouldn’t mind that outcome.  Conversely, the borrower might put more effort into avoiding an outcome if the lender has been clear that selling a house would be a major inconvenience.

What if the collateral doesn’t cover the balance of the loan?  How will borrower and lender handle that situation?  Are both parties in a kind of partnership where a failed deal doesn’t mean there won’t be future deals, or does a failure mean that lender will never work with borrower again?

And for the borrower, how risky does the borrower really think this deal is going to be?  Is there a strong chance the deal might lose money, and the borrower expects the lender to take some of the risk of failure?  Can the lender share in the benefits if a deal is better than the borrower expects?  Does the borrower have instability in their job or income sources that might affect their ability to make consistent payments?  Would it be better if the lender could expect more sporadic payments?

How devastating would a property surrender be to the borrower?  Would giving up a house or a car be traumatic, or does the borrower have only minor attachment to the collateral property?  Will the borrower happily do the legwork to liquidate the property for the lender if the lender deems it necessary?

These lines of inquisition, tailored to the nature of your deal with a borrower, can uncover the real motivations and values for borrower and lender, and help identify unexpected options and opportunities.

 

Communication is so important to any relationship, when business of personal.  Take the time to understand and be understood beforehand.  Reveal your buttons when you’ve established mutual trust.  I suspect you’ll be pleasantly surprised with the outcome.

 

Happy lending!

Josh Whitman, CEO
Whitman Technological Corporation

Moneylender Professional - Loan Servicing Software
My awesome program for managing loans, used by lenders all over the Earth.