I Sold My House in Texas with Owner Financing — What Do I Have to Do Now?
You are now the lender of record on a Texas note. Here is what that requires — and how a licensed Texas servicer can carry it for you.
THE SHORT ANSWER
When you sold your house in Texas and carried the financing, you became the lender of record on a Texas mortgage note. That role carries specific, non-optional duties: collect and post each payment, send the borrower IRS Form 1098 each year, keep accurate records, and — if the borrower escrows — administer property taxes and insurance. A missed notice or a misposted payment is the lender's problem, not the borrower's. You can perform this work yourself, or move the note to a licensed Texas servicer who does it under the applicable statutes.
What does it mean that I am now the lender of record?
Carrying the note makes you the lender of record on a Texas mortgage note. You hold the right to collect the payments, and you hold the duties that come with it: posting payments, issuing the borrower an annual IRS Form 1098, keeping accurate records, and administering taxes and insurance if the loan escrows. These duties apply at every portfolio size.
What do I have to do every month and every year?
Each month you collect and post the payment, apply it correctly to principal and interest, and record it. Each year you send the borrower IRS Form 1098 for the mortgage interest paid. If the loan carries an escrow account, you also hold the funds and pay property taxes and insurance when they come due. At Moat, your money and your borrower's escrow stay in an FDIC-insured trust account, kept separate from Moat's own funds, until it's paid out.
What happens if the borrower stops paying?
Texas default and non-judicial foreclosure are governed by Tex. Property Code §51.002, and the notice work has to be exact. A defective notice can restart the foreclosure clock, and getting it right is routine servicing work. If you sold on a contract for deed instead of a deed of trust, default does not run through the §51.002 process at all; the contract for deed guide explains how that differs.
Do I have to do all of this myself?
No. You can service the note yourself, or move it to a licensed Texas servicer who performs the work under the applicable statutes. If you want the broader picture of how a Texas seller-financed deal is structured and serviced, see the seller financing in Texas overview. Moat is a licensed Texas mortgage servicer, bonded, NMLS 1419346, verifiable on the NMLS registry. Moat handles the ongoing collecting and servicing; it does not write new loans, which is a licensed RMLO's job.
What does it cost to have someone service my Texas note?
Boarding a note is $150 one-time. Monthly servicing is $35 for a non-escrowed note and $40 for an escrowed note, and Moat publishes the full schedule up front. There is no contract; you give 30-day notice to terminate. See the full pricing and fee schedule.
WHAT'S REQUIRED VS. OPTIONAL
Your duties as the note holder
Collecting and posting each payment
Required — it is a lender-of-record duty
Sending the borrower IRS Form 1098 each year
Required under federal law
Keeping accurate records of every payment
Required
Administering property taxes and insurance
Required if the loan escrows
Sending the legal foreclosure notices the right way
Required if the borrower stops paying — Texas has strict notice rules
Hiring a servicer to do this work for you
Optional — you may service the note yourself
Selling the note instead of collecting
Optional
Most owner-financed notes in Texas come from people in your situation: roughly 86% of seller-financed notes are created by individuals doing a single deal, and 62% by count are residential (NoteInvestor / Advanced Seller Data Services, 2025).
FREQUENTLY ASKED
Owner financing in Texas, answered
This is educational information, not legal, financial, or tax advice. Consult a licensed professional about your specific situation.
Move your Texas note to a licensed Texas servicer.
Send your loan documents and Moat will review them and quote the boarding. $150 setup, $35/month non-escrowed ($40 escrowed). No contract; 30-day notice to terminate.