In South Carolina, I believe that the language of the note and mortgage would govern whether it would be in default. Most any master of Equity or Special Referee (which is equivalent to a judge for purposes of mortgage foreclosure), would probably not allow foreclosure based on a due late charge. In general, based on the information you have given, and in the absence of language in the assignment that you gave the assignee, I would say that you should NOT have to accept this back because of recourse reasons.
I posted this on the notes and paper forum but haven’t gotten much feedback yet. Maybe someone here can give me some insight.I have a question regarding a note that I sold with recourse. On Friday last week I received a letter from the note buyer who requested that I buy the note back from him. He claimed that the note was in technical default.
It turns out that the note is current with payments but the payor did not include a late payment with his May payment.
I received the letter from the note buyer on Friday June 29 because the recourse agreement expired on June 30. He stated that he was antsy because he had a couple of other notes going bad and this was the lowest grade note in the pool that he bought from me.
I just want to know, does he have a leg to stand on since the only thing that the payor is behind with is a $30 late payment???
What does his recourse with you say, usually there is remedy in that you can replace the note with one you have and take your own action, make the payments yourself and take your own action.
It sounds to me like the note was sold to someone inexperienced and/or way to anal retentive.
Pay the 30 bucks and then send the folks a letter to inform them that every payment will have a late fee added and late until this late fee is taken care of, if not taken care of before the first on any consecutive month.
When we send the letter out, (usually within the first month or two) it’s someone testing us.
After that they either start paying on time or pay us late anyways but include the late fee.
I love it, they pay between the 5th -10th… and I make 10% on my money.
I would educate your guy the same way that the 30 bucks is extra money to sweeten the pot once this is under control.