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What Happens to the Loan After Funding

Detailing the process behind what happens to your loan after funding.

The funding process occurs when you fund a transaction and a trustee. That money typically goes right into escrow or title. The collateralized deed gets recorded, and money gets dispersed. What happens then? Today we’ll talk about servicing and what happens to your loan after it’s funded.

GNT sets the loan up, and we board the loan with a local servicing company that specializes in servicing privately funded trustees. That’s important because they know the ins and outs of following all the servicing laws. They make sure that the loan is serviced legally and professionally.

“Servicing is super important, and it’s imperative to have the right company doing that job.”

Every month, as those payments become due, they will collect the payments from the borrower. Then they will board those payments, track them, and forward the money directly to you. That is how you receive income from these trustees. The money will either be sent to you in the form of a check or via an ACH, which is a bank wire. The money will show up, and you don’t have to do a thing. That’s why we call it mailbox money.

The servicing company is the buffer between you and the borrower. They’ll handle any phone calls, complaints, or issues that the borrower has. They’ll deal with any late payments and payoffs when the loan becomes due. In addition, if the borrower has to default on the loan, they can take that loan through a foreclosure process to a trustee sale. At that point, if the property sells at auction, you would get paid off. If it doesn’t sell at auction, then the servicing company would transfer that property to you in the form of a trustee’s deed.

Servicing is super important, and it’s imperative to have the right company doing that job. We’ve relied on a local servicing company very heavily over the last 20 years, and they do a great job. If you have any questions or you want to start investing in trustees, don’t hesitate to reach out to us by phone or email. We look forward to hearing from you.

NMLS ID: 307420

**BRE: 01191560 **