Is this usury in Colorado?

[Jon Pool]

For the sake of clarity, I am using simplified round figures... I took out a six-month hard money loan to improve a property I already owned in my personal name (paid cash) for $100,000 nominally, with 5 points origination fee and 5 points loan arrangement fee and 12% interest. The funding entity was an LLC owned and controlled solely by the loan arranger, I. e. the lender. At closing, the lender paid out $20K to me personally to pay off (with his knowledge) personal debts. At month 3 the lender paid out another $20K to my contractor, directly. I paid the lender $1000/month for each of the first 5 months, at which point he declared the loan in default due to another unrelated loan being I have with the same "lender" though funded via a different LLC being declared in default. My questions are: 1) If the same individual controls the loan arrangement, loan servicing and loan funding are not all monies whether termed "fees" or not actually interest (under Colorado law)? 2) Regardless of (1), is the APR of the loan not based on the amount(s) actually disbursed and not the nominal $100K maximum? 3) Does the answer to (2) depend or not on whether or not the full $100K was not only hypothetically available for disbursement, but was in fact held in an escrow account as claimed by the lender rather than his general operating account? I greatly appreciate any insight from experienced investors. Thank you.

[Bill S.]

@Jon Pool you really need a lawyer to weigh in on this. This appears to be a very technical legal issue. There are so many details my head is spinning and usually all those details determine the outcome. In complex legal issues, sometimes if one detail is not mentioned or is stated one way when in fact the paperwork shows it another way, the outcome shifts. 

My take as I step back form your post, is that the lender is foreclosing on a loan that was not delinquent due to delinquency on another loan. You appear to be looking for a way to stop that action and your approach appears to be looking for some sort of technical glitch in the process.

My advise is to go to your lender and figure it out. Not sure of what your situation is but in all likelihood it will cost you more to sort it out with an attorney rather than just pay the lender back or sell the property and pay off the lender. If you are in foreclosure, you are already pretty far down the road and the clock is ticking on getting a positive outcome. My advise is to figure out any way you can to pay the lender back and stop the foreclosure, even if it means fire saling and starting over.