Need some ideas

Steve zephod at cfl.rr.com
Sat Jan 24 13:34:10 EST 2009


---- Mark S <colt22target at hotmail.com> wrote: 
> I would suggest renaming the account to reflect the mortagee, pay off 
> the first accounts with the proceeds from the sale and open a new 
> account for the new mortagee. This will help to keep your books clean if 
> either person decides to sue you.

I used generic names in my e-mail. The actual account name is the address of the property.

There was no pay off of the original mortgage. The first people abandoned and the second buyer just brought a downpayment. Where would I transfer funds from to close out the 1st mortgage?



> Steve wrote:
> > Hi,
> > I need some help setting up some new accounts to handle an somewhat unusual situation. I'll try to keep this a brief as possible.
> >
> > I own a mortgage - in other words I am the bank in this situation so I set up some accounts like this:
> >
> > Assets
> >    Property
> > Income
> >    Interest
> >       Property
> >
> > In the beginning, Assets->Property contains the amount of the mortgage and each month's check decreases that account by the principle and the remainder is the interest. (Ignoring escrow)
> >
> > Like many people, the owners got behind on their payments and one day I found out they had just left. After some time, working through the legal system I got the property back in my name. There were expenses involved with this and so I created a new account Expenses->Property. 
> >
> > I refurbished the property - new sub-accounts of Expenses->Property, put it on the market and recently sold it. I hold the mortgage for the new buyer also.
> >
> > So my question is: how do I handle the transition? Do I continue to use the same Asset->Property account to track the principle owed and adjust the amount with a capital gain/loss transaction for the difference between the old mortgage and the new mortgage? Or would it be better to somehow close out the old mortgage and create a new account Asset->Property2? Is there a right way to do this or is any way OK?
> >
> > I'm looking for some ideas.
> > Thanks
> > Steve
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