Would You Lend to a “Bank Slayer?”

[Corey Dutton]

There are many law firms that have gone up against the banks since the onset of the banking crisis to try and get loan modifications or other concessions for their borrowers. Although many of these law firms and loan modification companies have failed miserably in their attempt to “slay the banks,” many of them have been very successful in collecting upfront fees from borrowers facing foreclosure.

We recently were approached by an individual who is seeking a hard money loan to buy an investment property. We found out that this individual is one of these attorneys, who we like to call a “bank slayer.” He has spent the last several years working with borrowers on loan mods as well as suing lenders for predatory lending practices.

Although this is clearly a hard money loan with a business purpose on an investment property, and not a “consumer loan,” we are hesitant to lend to this individual. Would anyone share an opinion on this? Would you make the loan to a “bank slayer?” What are the risks?

Posted by Corey Curwick of Private Money Utah on September 25, 2012