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When my grandmother passed away we sold her apartment in NYC. She had owned the place since the 20's and because it was in the Dakota (the building made famous by both Rosemary's Baby and John Lenon and Yoko Ono living there when JL was shot and killed) the apartment was worth an absurd amount of money. The buyer was a very nice family moving here from Spain and had NO credit in the US. Because the amounts involved were in the multi-million dollar range, no bank in NYC would give them the required loan even with a 50% down payment! (Stupid mistake Mr. Banker - but that's another story.) After consulting with financial and trust people, as well as tax advisors, we decided to cary the mortgage ourselves via the family trust. The initial term was five years with a due and payable clause. At the five year point we decided to refinance it and adjust the rate, and the term and we extended the then existent balance out for 20 years. The loan amount (at that point after five years of payments and some principal reductions in addition to the regular payment) was about 5.5 million dollars. Each quarter for the past decade, the payments have been made on time. The maintenance fees payable to the coop are paid as due, and the NY property taxes are paid quarterly along with the mortgage payments. (Note: The term at origin of this loan was 20 years with payments due each QUARTER - every three months - vs the usual monthly payment most of us have. Not unusual in a mortgage of this size and it worked better for the buyer and certainly is less bookkeeping for our trust, as well.)
The buyer is happy with the terms and rate of the mortgage (it was a lower than normal rate at the time, but now it's above the current rates they could get if they were to refinance it.) So all seems well, and we feel as though after all this time, our income stream from the loan is quite nice - and the interest it has generated over and above the principal repayment is a substantial bonus for our family and the beneficiaries of the trust. We ended up collecting several million in interest we NEVER dreamed we would receive, in addition to the money paid in as down payment and fees, etc. It costs me about $1400 per year to have one of the big accounting firms receive the payment, cut the checks for taxes, verify insurance on the property naming the trust as co-loss payee, and the other myriad of details that go with processing and distributing a mortgage payment. Trust me, it's money well spent to have the grief of it all off of my back. The accounting firm issues lawfully required statements of interest paid, payments made, taxes, insurance, etc., paid out and balances due each quarter. I also get a statement showing where the money came in, how much went out and for what, and then the distribution of the principal and interest to the heirs per the provisions of the trust. The percentage of income each person receives is different with two people getting twenty-five percent of it each, and then another eight individuals and one charity getting about 5.5 percent of the net payment each quarter. As I said, although the payment is over 100k per quarter (closer 200k with real estate taxes at the state, city, county level assessed and payable.)
The buyers have asked me to do two things for them this year. The first is to add their now 37 year old son onto the loan documents so he can use the interest deduction or the portion of it his parents do not benefit from. We have no problem doing so for a second. Their track record with us has been literally perfect for over ten years now. The second is to start reporting the payment on this privately held mortgage to the various credit bureaus. The father of the family is a diplomat posted at the UN and a Spanish National. They have - as a family - diplomatic immunity from most, but not all, US laws. When we first agreed to carry the loan ourselves, we didn't know this fact - but that is why the US banks would not lend them a huge sum of money, even with 50% down payment - which they did in fact make! Their "status" as diplomats makes it difficult for them to get loans, credit cards, etc., from US banks. Fortunately the mother's family is one of the heirs to the Fiat Automobile Fortunes. (yep, they've got a few pennies I'd say!) Again, we didn't now this years back. We just knew they were nice people who could afford Grandma's old apartment and were willing and able to pay the listed price which is what passed back then for "true market value."
When I called the corporate offices of all three CB's I was transferred from one person to another and ultimately told that I would have to become a "subscriber" to the various CB's to be able to report this loan history to them! The cost will be about 150/mo per bureau! (Approximately)
The fact that I'd have to join the CB's to report this one and only private mortgage seems insane to begin with. Secondly it's a family trust that receives these payments and the trust is set up to safeguard the privacy of the beneficiaries. So the trust is the only entity that can legally verify the existence of this mortgage and the payments made thereon. The lawyers have warned me about reporting or verifying this document and payments acting as an individual. I must do it acting as the trustee and administrator for the trust who holds the note. Otherwise I could be charged with fraud!
I'm willing to join the bureaus if I have to do so in order to do this reporting for them. But would like to find a cheaper and easier way to manage it if possible. Give my own file mixups and ongoing battle with the wretchedly inaccurate and arrogant credit bureaus, I truly hate to give the loathsome and incompetent CB's any of my money now or in the future. If any of you have had years long mix-ups and played for months or years getting it straightened out - you'll know how unhelpful and inconsiderate the CB's can be and you probably understand my not wishing to support them in the Machiavellian business practices one more second.
If this is in the wrong place, I apologize. It's a weird question and I have no earthly idea of where to post this other than under credit/Mortgage Loans. If it should properly be elsewhere, please Mr. Moderators feel free to move it to the proper place. Thank you one and all for your assistance and guidence in this odd situation. Your collective wisdom and experience may well offer a solution that I do not know of, yet.
Cheers and thank you!
Mark
June 2006 July 2009
EQ 490 EQ 680
EX 407 EX 701
TU 493 TU 619
It seems that sometimes you have to content yourself with progress, not perfection! And the progress has been nice. Also, no inquiries for over two years now! Thank heaven! But dealing with the wreckage of the past is not always easy nor is it quick.
Since 6/6/06, deleted two tax liens / 5 ca's that were not mine / still working on a few remaining baddies and filing suit against Midland Credit Mgmt for CIVIL FRAUD & HARASSMENT. (wish me luck!) Chase Visa had an ancient (over 10 years old) account that they suddenly started to report again. Just got that deleted last week. Of course the bad news is that I keep running up my CC balances to pay the lawyers when the going gets rough on these battles and it takes two or three months to get the utilization back down to under 30% again! Oh well. better to suffer with high percentile of utilized credit than no credit at all!
Interesting story
I dont know an answer but have a suggestion
I would see if you can find a company that specializes in servicing loans they may be willing to take on your loan and included in their fee may be the reporting to the bureaus
Using who you are using now makes sense I am suggesting finding a company that does the same thing but also reports to the bureaus
I am not sure if this existbut I know the banks have companies that service their loans and report the results to the bureaus
Good Luck
B