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Contract servicing.

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What is contract servicing?

We are an independent third party agent that receives and disburses payments on contracts and deeds of trust between two parties.

Contract servicing includes accepting payments from buyers, disbursing those payments to the seller, providing account history and year-end interest figures both to the parties and to the IRS at the end of the year. Typical services include providing payment coupons and receipts to buyers, payment notifications to the sellers, and providing accurate pay-off quotes to either side. A completed Contract Collections Escrow Agreement is required to open an account to be serviced by Stevens County Title.

Advantages to the Buyer
A third party provides security in document holding. That is to say that if the seller were to move, get divorced, or pass away, the third party holds onto the documents that can release the lien. A Contract Servicing Agent will also provide a year end 1098 and an account history which you may or may not receive without using a third party. In a True Escrow, the seller deposits original documents with the Contract Servicing Agent and the agent will release these documents to the buyer upon payoff of the contract.
Advantages to the Seller
The seller in a contract has assumed the role of a lender. The seller is responsible for maintaining payment records and reporting the interest received to the IRS. By using a Contract Servicing Agent you will no longer need to take on these added responsibilities. As a Contract Servicing Agent, we will collect, apply and remit the buyer’s payment to you. We take care of calculating the principal and interest figures for you, according to each individual contract. When the contract is paid in full, we take care of sending the original documents to the appropriate parties.

What is a reserve account?

Borrowers may be required to fund an reserve account, along with their mortgage principal and interest payment, out of which the contract servicing company pays property taxes, property insurance, mortgage insurance (if required) and other essential expenses. Without an escrow account, a borrower who fails to maintain insurance and pay taxes on the home may lose the property that secures the loan.

Having your taxes and insurance included in your mortgage payment is actually very convenient. Instead of having to pay an annual insurance premium and half of your annual taxes on April 30th and the second half on October 31st out of pocket, the servicer establishes an automatic savings plan for you and pays the payments when they are due.

The amount of reserves required varies and can changes annually, depending on the amount of the annual taxes and annual insurance premium, this in turn, will change your monthly payment amount. (Can also be referred to as impounds or escrow account)

We’d love to hear from you.

For additional information or questions regarding Contract Servicing please feel free to call our Contract Servicing Department at 509-684-4589 or send us a message using the form below.