What is the payment schedule for Real Estate Note?

Real Estate Note payments are required on a monthly basis, unless the Real Estate Note is paid off early.

The monthly payment due date on Real Estate Note is the same day of the month as the origination date of the Real Estate Note. Monthly payments are due on that same day of the month for number of months for the note term into the future. For example, a Real Estate Note with an origination date of November 4 has its monthly payments due on December 4, January 4, etc.

Real Estate Notes that have an origination date that is a day of the month which doesn't exist in future months will have their monthly payments due on the closest possible day of future months. For example, a Real Estate Note with an origination date of January 31 has its monthly payments due on February 28 (during non-leap years), March 30, April 31, etc.

What are the different payment statuses?

Payment status levels include:

• Current: all payments are current.
• Late (<15d): the payment is less than 15 days late; the grace period hasn't ended. This status is displayed only to participating Investors.
• Late: the payment is less than 15-30 days late and the grace period has ended.
• 1 month late: the payment is between 1 and 2 months late.
• 2 months late: the payment is between 2 and 3 months late.
• 3 months late: the payment is between 3 and 4 months late.
• Charge-off: the Real Estate Note has been charged-off at 4 months late for non-payment.
• Payoff in progress: a payment has been initiated that would payoff the entire Real Estate Note.
• Paid: the Real Estate Note has been paid in full.
• Repurchased: the Real Estate Note was repurchased in full from investors by IRESE.

Once the Real Estate Note is 1 month past due, it is turned over to a foreclosure agency to pursue foreclosure from the delinquent Property Owner. Learn more about late payments and foreclosure agencies.

If the foreclosure agency can't collect payment from the Property Owner after 4 months of delinquency, the Real Estate Note will be marked as "Charge-off", and property that secures the note will be eligible for public auction. Learn more about foreclosure procedures.

What are the payment options?

There are two payment methods:

• Electronic funds transfer (EFT): EFT allows IRESE to initiate monthly payments electronically on the ACH banking network. EFT is the payment method used by most companies who offer direct deposit of employee paychecks.
• Bank draft: Real Estate Note payment can be made via the bank draft method of payment which is authorizing IRESE to write a check on a monthly basis to cover payment each month. This option results in a monthly service charge of additional 1.00% on the interest rate because of the additional processing costs associated with it.

IRESE encourages all Real Estate Note payees to select the EFT payment method because it is free, convenient, and secure.

How are payments allocated to the Real Estate Note balance?

When any payment is made, the breakdown of that payment is available in the "Note Payments" page. Take me there

The following data is available for each payment.

• Date: The date that the payment was withdrawn from the bank account.
• Transaction number: An internal accounting number that can be used to identify each payment uniquely. If a payment is later disputed, the dispute line item will contain the same payment number.
• Status: Payment status, one of the options as such as Canceled, Completed, Processing, or Scheduled.
• Amount paid: Your pro-rated share of the gross payment made on the Real Estate Note. For example, if you own 10 share, each $100 principal of the Real Estate Note and the payment of $1 per share is made, your would receive $10.
• NSF fees: If the payee owes IRESE any fees for failed payments, typically due to NSF, or non-sufficient funds, these will be subtracted from the gross payment amount.
• Bank draft fees: If the payee chose the bank draft method of payment, the service charge will be added to the payment amount.
• Amount received: The gross amount received by the Investor, which excludes NSF fees, and bank draft fees, if applicable.
• Late fees: If the payee has any accrued, unpaid late charges, these are paid to the Investor.
• Interest: If the payee has any accrued interest since the last payment, this is paid to the Investor. See more on interest accrual below.
• Principal: Any remaining funds received are allocated to principal.
• Service fees: If any Investor servicing fees have accrued, these will be charged to the Investor as an expense.
• Foreclosure fees: If the Real Estate Note had been assigned to a foreclosure agency, foreclosure agency fees will be charged to the Investor as an expense. Learn more about foreclosure agencies.

Funds from incoming payments are applied in this order of priority:

• 1. Fees

  • 1. Failed payment fees (to IRESE)
  • 2. Bank draft fees (to IRESE)
  • 3. Late fees (to Investors)

• 2. Interest

• 3. Principal

How are interest and service fees accrued?

Interest and servicing fees are accrued monthly, and are based on the current outstanding Real Estate Note principal.

To calculate the monthly accrual amounts, take the principal balance on any given month and multiply it times the monthly rate (based on a 12-month year):

Equation:

Monthly accrual = (Annual rate / 12) * Principal balance

For example, if you own $100 Real Estate Note with an annual interest rate of 10% and 30 year term, you will accrue $0.83 in interest on a monthly basis, and $0.083 in Investor servicing fees, which have an annual rate of 1.00 %. Keep in mind that as the principal balance drops, because the payee makes payments each month, the rate of accrual will also slow over the life of the Real Estate Note.

Assuming a full 30 year Real Estate Note, your $100 Real Estate Note at 10% interest would earn you $215.93 in total interest, and you would pay a total of $21.59 in servicing fees.

What happens if a payee makes an additional Real Estate Note payment or pays off early?

Payee have the option to pay all or part of the outstanding principal balance in advance of the due date at any time. There is no penalty for doing this. Partial prepayments will not change the monthly payment amount, but may shorten the Real Estate Note term.

When a payee makes an unscheduled payment, each Investor's portion of the payment is deposited in the Investor's IRESE account, and is immediately available for the Investor to use on bidding again. Investors can easily track the deposits and withdrawals from their IRESE account by going to "Home > My IRESE > Account > Transactions" and choosing transaction filter. Take me there

What do different payment statuses mean?

The Real Estate Note payment can be in one of the following statuses:

• Scheduled: the Real Estate Note payment is scheduled in the future.
• Processing: the payment is reflected in the current Real Estate Note balances, but the proceeds from the payment have not yet been made available to the Investor. Because there is still a 2-day waiting period in which the payee can, through his bank, request that the payment be cancelled, the payment is marked "Processing" until the payment clears.
• Completed: once the two-day waiting period is up, funds are released to the Investor's cash balance. Payment has been completed and funds are available in IRESE account under cash balances.
• Canceled: payment has been canceled.

What if a payee cancels an otherwise completed Real Estate Note payment?

It is possible that a payee who has made a Real Estate Note payment in the past can have his or her bank cancel and request a refund on that payment. This is referred to as a chargeback, and will appear on the Real Estate Note payment history table as "Disputed". IRESE handles chargebacks according to our Real Estate Notes chargeback policy.

Note: In some cases, a payment may appear as disputed although the payee may not have actually disputed the payment with his or her bank, but simply because the payee's bank failed to notify IRESE in a timely way that the payment had failed, usually due to insufficient funds. This is most common with payees who use the bank draft method of payment, in which paper checks are printed and the check bouncing process is much longer.