Thursday, July 15, 2010

How Do I Lock in a Payoff Amount?

Many funders work with funding rates covering six month periods of time. So for instance, if a deal is funded on January 1st, the rate is good until July 1st . In my five (5) plus years of funding , I have always stressed communication to the attorneys I work with.
Let me give you an example of a very common occurrence; a case settles 20 days before a six month period runs out. The settlement funds most likely will not be in and "cleared " before the six month cut-off date. What should an attorney do?
My suggestion is to contact the funder, let them know the case is settled and that the monies are expected in shortly. Provide them with a copy of release, stip. and transmittal letter to the carrier showing the pertinent dates. Then ask them to "lock in" the payoff amount which was good BEFORE the six month period expired.
Most funders will appreciate honesty and communication and will oblige. This can save a client(or attorney) hundreds if not thousands of dollars.[just one email or phone call].
If you ever find yourself in one of these situations, give me a shout(or email me ). I'm more than happy to assist.

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