The beginning of my painful journey

I’ll set the stage with the highlights that led this experience sideways:

1. In the first half of 2024, we were in the hyper-focus stage of moving to the Azores, meaning I had little headspace for monitoring notes.
2. This note was purchased in February to park most of the money we received from selling our home. Later, depending on our situation in the Azores, we could sell or keep the note.
3. We didn’t switch Sservicers. The seller was pleased with the current servicer, a company we were unfamiliar with.

How things started to unravel

1. The servicer’s portal was a single page with a lot of information crammed in. It was hard to tell if the borrower had paid.
2. The Servicer doesn’t provide borrower outreach, which we found out at the 90-day unpaid period.
3. The borrower asked for a chance to get caught up. This happened three times.

Working through the gray-area

1. The seller and his team constantly contacted the borrower. He didn’t want this note to impact his reputation. He has been creating seller-financed notes, and they all have continued to perform.
2. The borrower had a couple of family incidents that delayed payment. These included reducing his work hours and his son being involved in a shooting.
3. I wanted to allow the seller and the borrower to get this worked out.

I am glad to have done the following.

1. I started transferring the note to Madison as soon as I found out that there had been no borrower outreach. This was the last straw with the Servicer, as the first straw was that the servicer declined to provide a W-9.
2. The borrower asked if the missed payments could be added to the balance. I said it wouldn’t be a problem once he made a payment. I did this because I wanted the borrower to show me his commitment to get back on track.
3. I asked the borrower to commit to a payment date. This gave me peace of mind because I knew I could move forward with the demand letter if the payment didn’t happen by this date.

How things turned around?

1. I moved forward with the demand letter, but there was no response.
2. I moved forward with the DIL documents, but there was no response.
3. Finally, the borrower contacted the seller’s team. He was open to signing the DIL docs. I had kept the seller in the loop since he has a team in the area.

Where are things now?

1. I found a mobile notary who met with the borrower to sign the DIL documents. The attorney has submitted the documents for recording.
2. The mobile notary also helped clean the place, cut the lawn, and referred me to an agent.
3. The agent has been super helpful with changing the property locks, referring me to an insurance company, and posting the property for sale.

What would I do differently next time?

Of course, hindsight is 20/20. I should not have given the borrower three more chances after 90 days. This led us to send the demand letter a month later than usual, at the 120-day unpaid period.

I won’t be using that same Servicer, for sure. Also, I am confident that I will be more cautious with new Servicers I work with in the future.

If I find myself in a similar situation where a single event like moving overseas is taking most of my headspace, I am pretty sure something else will catch me by surprise.

Wrapup

To be honest with you, I am still processing this whole situation. I am sure I'll have more insights after the property is sold.

I hope you found value in this story. Knowing everything I shared, I would love to know what you would do differently.

Lastly, if you want to know the servicer's name, message me on LinkedIn. I’m happy to share it in private.

I'll leave the Zillow link to the property here for any investors interested in Odessa, Texas.