How to Spot Loan Scams and Bogus Lenders on Social Sites

[Corey Dutton]

If you’re looking for a hard money loan or bridge loan, you can visit one of the many ‘lending-related’ groups many social networking sites such as this one. You’ll certainly find a lot of mess to sort through, in fact, bogus loan scams are having a big party on social sites and you’re the guest of honor. There are so many fake lenders posing as legitimate lenders on such websites, that it’s hard to figure out who is real. So how do you spot bogus lenders on social sites?

1.Look for loan terms that seem too good to be true.

2.Look for individuals located overseas that are lending in the U.S. They will have an office in a high profile location overseas such as London or Singapore.

3.Look for emails with incorrect English grammar. If you speak to them over the phone it’s typically a broken English accent.

4.Look for individuals offering loans who do not have proper websites or domain backed email addresses. For example an individual with a yahoo, hotmail, or other email address is a red flag.

5.Do a google search for the individual or the company name together with loan scam or fraud and see if anything pops up.

This is a short list of how to spot individuals on social sites who are posing as legitimate private money or hard money lenders. Beware, they will waste your time and take your money in the form of upfront fees. Note some of the red flags listed above in your next interaction with a potential hard money lender on a social site.

[Jay Hinrichs]

@Corey Dutton

  I also like the ones that advertise they will do loans from 50k to 50 million... LOL

those that do 50 million loans don't play with those that do 50k loans. and vis a versa.

great post.

Up front fee's  due diligence fee's etc all red flags..

for most of the folks on BP  they need go no farther than google lender in their city or state no need to go much farther ... although there are legit regional lenders.. Like  a Seattle funding.. or Lima or others...

but I find the closer the lender is to the property the easier it is.

will be interesting to see where the B2R and Colony funding arms end up... as they enter the space with Billions..

Along with the Crowdfunding sites that are getting some pretty good traction in the debt space.. they are a little spread out to give any local lender much competition but if they concentrated on a market they could certainly bust into a local HML playground and take market share as their rates are usually more competitive.