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How are payments, servicing, and loan events handled for private debt investments?

All payments, servicing, and loan activity for your private debt investment must be processed through your STRATA account and supported with proper documentation. A servicing agent is required to manage payment collection and loan terms. As a directed custodian, STRATA does not perform servicing functions. You may:

  • Engage a third-party servicer, or
  • Act as your own servicing agent

If you act as your own servicer, you may not receive compensation or any direct or indirect personal benefit, as this may be considered a prohibited transaction under IRS rules.

Income, expenses, and payments

To maintain IRS compliance, all income and expenses must flow through your IRA:

  • Incoming payments: Payments from the borrower or servicing agent must be sent directly to STRATA with a completed Deposit Certification form or payment coupon that clearly identifies the asset name, STRATA accountholder, and principal/interest breakdown (if applicable)
  • Wire payments: If a payoff is sent via wire, a copy of the deposit details (coupon) must also be provided and clearly identify the asset name, STRATA accountholder, and principal/interest breakdown (if applicable)

    • Example for the wire memo or reference field: 

      John Smith IRA #123456 – ABC Note – $1,000 Interest / $500 Principal

  • Expenses: Submit an Expense Payment Authorization form with supporting invoices—STRATA will pay expenses directly from your IRA

All invoices and payment documentation must include the applicable investment details.

Loan changes and events

1. Loan payoff or sale

When a loan is paid off or sold, provide:

  • A request for reconveyance, satisfaction of mortgage, assignment, or transfer of lien
  • STRATA’s General Letter of Instruction authorizing us to execute documents and release original loan documents to the appropriate party (e.g., title company or closing agent)

2. Principal changes

If a payment includes principal and changes the expected loan balance, provide an updated amortization schedule with the payment submission.

STRATA provides a Sample Amortization Schedule as a reference tool to help outline principal and interest allocations. STRATA does not calculate, validate, or verify loan terms or payment accuracy—this responsibility remains with the accountholder.

3. Note modifications

To update loan terms or status, submit STRATA’s Note Modification Instructions form along with a signed amended agreement from both the borrower and accountholder.

4. Borrower default

If a borrower defaults, you may direct your servicing agent to initiate foreclosure or other recovery actions. If your IRA acquires the property through foreclosure, additional documentation will be required to hold title. To remove an uncollectable note from your STRATA account, submit STRATA's Uncollectable Note Removal Request with proof of actions.