A resale-ready servicing file on a seller carry builds from closing forward — not at resale. This guide covers the ten-step workflow that produces a collateral file, trust account, sub-ledger, periodic statements, and buyer-facing summary capable of supporting a near-par note sale.
The seven mistakes below recur in seller-carry files brought to a buyer for resale. Each one drops the resale price by a measurable amount, and the discounts stack. The fix on every one is the same — produce the record across the life of [...]
A seller-carried note prices at resale based entirely on the file the holder produced over the life of the loan. A complete servicing record — sub-ledger, trust account reconciliations, escrow analyses, and communication history — prices against the buyer's base discount. An incomplete file draws stacked discounts for each missing record category.
The twelve Section 32 questions every owner-occupied seller-carry holder must answer at closing — from APR spread tests and disclosure timing to ability-to-repay files and examiner record requests.
Whether a seller-financed note falls under Section 32 of Regulation Z depends on the buyer's intended use of the property. This article walks the coverage analysis, loan-term restrictions, operational duties, and resale implications across investor-owned and owner-occupied seller carries.
The three case studies below describe seller-carry holders who closed Section 32-covered loans without running the coverage analysis and absorbed the consequences. Identifying details have been changed; the operational and regulatory patterns recur in seller-carry files reviewed at a licensed servicer.Case one — the [...]
The Section 32 coverage test determines whether a seller-carry note on an owner-occupied home falls inside the high-cost mortgage rules of §1026.32. Run the test before closing, document every step on a written workpaper, and file that workpaper in the loan jacket.
Section 32 of Regulation Z reshapes the rules on a seller-carry note when the subject property is the borrower's primary residence. The seven mistakes below recur in seller-carry files reviewed after a borrower complaint or a state inquiry — and every one of them is preventable at the closing table.
Section 32 of Regulation Z applies to seller-carried notes on owner-occupied homes. Learn which carries fall in scope, how the coverage tests work, and what disclosures and loan-feature restrictions apply.
A seller financing a sale at closing has two clean handoff windows to a licensed servicer in the first 60 days — the closing-table handoff before any borrower payment arrives, and the day-60 handoff after the first reporting cycle runs. This comparison walks the [...]
