Legal Questions for Hard Money Lenders

[Brian Marron]

Being the newbie I am I got screwed by a hard money lender. I am looking for someone who is in the private lending business that might be able to answer a few of my questions regarding legal practices in the industry. PM me if you might be able to help.

[Joel Owens]

I am so tired of hearing people getting screwed by these people.

6,500 on a 160k purchase price is outrageous.A residential appraisal should cost about 300 to 400 bucks at market value for most hard money purchases unless it is a really big house.

Now commercial appraisals DO run about 3,000 to 5,000 dollars depending on the asset type and size.

The New York company sounds like they don't want to tie up there money just collect the fee.

Unfortunately I know of another situation on a commercial loan where a few hundred k is involved.This lender change the loan programs on their website 6 times in the last 4 months.

The FBI,attorney general,and a whole bunch of other parties are investigating this lender and going after them.

This lender has been in business for over 7 years and they have a bunch of connections.When a lender holds a large due diligence fee they have little motivation
to finish your file to get paid.

If you talk to commercial investors who have completed a bunch of deals they will NEVER EVER pay upfront fees.They tell the lender to go spin.

If the lender you pay upfront fees too wants to do your loan and even if you pay due diligence fees the lender will sometimes drag their feet.

The reason is they might have 10 of the 20 million dollar loans they are making more money on the points on and then they will get around to your little loan later.

You don't know their escrow company and it could be a shell corp and they are in it together.

Tell the lender you will have YOUR ATTORNEY hold funds in escrow.Your attorney will pay the appraiser directly the fee after they have been vetted.

Lenders who have nothing to hide-hide nothing.If they are full of BS you will here a bunch of excuses as to why you can't do this.

I just don't know how these people can go to sleep at night knowing they do these things to people.