Sherman Bridge- WARNING- Beware of hidden fees

[Chris Pflum]

So I decided to give Sherman Bridge a try on my most recent project.  The up front process went well, and I was content with the communication, costs, and process.  Closing went smoothly, and my project proceeded.

Unfortunately, as sometimes happens in these rehabs, we ran into some significant challenges.  We addressed them as they occurred, and had to came out of pocket to cover some significant unexpected expenses, but we got the rehab done, and the property on the market. The renovation turned out great.

After receiving my final draw, I noticed that things did not reconcile in the draw account.  It appeared there was a big hole, and the account was short compared to what it should have been at that point.  Unfortunately, I could find nothing on the draw statements to account for this.  When I started to do some digging on this, Sherman dropped a bomb on me.

I found out there was a date set by Sherman for rehab of the property to be complete. After missing this date, Sherman began taking fees out equal to 1% of the total loan periodically (1% on each fee!). 

There were never any notifications that they were going to do this, or that they had done it. They just quietly did it. 

No documentation, emails, letters, nothing.  They just reached right in and started taking money. And because they didn't document this anywhere in the statements I was receiving, I only figured it out by pressing them to find out why the account wasn't reconciling.

Total shadiness. 

I'm here making my mortgage payments every month, and they're over there stealing money from my draw account. I don't think a lender could behave any worse than they have on this. 

I've tried resolving this with them, but they've gone radio silent.  Unfortunately, it looks like I'm going to now have to get my attorney involved.  Because of this, I strongly warn against using this lender.