Workarounds for seller financing pitfalls

Don't panic if payments can't be cashed

DEAR BENNY: I purchased a condo in California in January 2009 and was able to get a second mortgage through the seller to help me purchase. Dealing with the sellers has been a bit of a hassle.

When I contacted the sellers in order to assure that I received a statement of the interest paid on my loan about two months ago, they informed me they were unable to deposit two payments I sent them through my online banking system. One of these payments was in April 2010 and the other in September.

How long does the lender have to inform me of a missed or late payment? Since it has been so long it has been somewhat difficult for the bank to figure out what exactly occurred with the April payment. I am planning on refinancing in order to avoid dealing with this lender. –Brandy

DEAR BRANDY: That’s an interesting question that has never come up before. And I must confess that I really don’t know the answer. I do know, however, that commercial mortgage lenders who receive more than $600 a year in interest must send their borrowers a Form 1098 by the end of each January. However, if your lender (the seller) is not in the business of lending money, he has no legal obligation to send that form to you.