Lima One Lending Complaints

[Terri Dyer]

I’m looking for others that have had issues with Lima One lending.  Many of the issues I have had and seen Others on the forums include; them jacking up interest rates without informing the consumer right before closing.  Not paying escrow on properties.  Not providing statements, fees, lending documents, other information up front or at all.  This is all unacceptable and illegal lending practices.  I don’t want others to have to go through the same nightmare or risk your investments.

Please post your experience with them.  Also file a report online with the consumer financial protection bureau.  With enough complaints they will investigate them and can file a class action suit against Lima One.  I saw someone else who is also filing with the Secretary of State and whoever holds their lending license.  I’ll file with those places too this week.

I have won a law suit against them to get my pre-payment penalty back when I refinanced with a more reputable lender so my properties wouldn’t be put at risk anymore and the nightmare with them would be over.  I also tried to work with them on numerous occasions before it got to that point.  They however were only concerned about my end of the contract (prepayment penalty) not their responsibility for their part of the contract.

The judge said their “bookkeeping was negligent at best and their attitude about it appalling”.

They of course are now appealing the decision and continue to try to bully me into just going away.  It’s time something is done about their illegal lending practices. 

[Jason Harville]

Hi,

I am in the process of researching lenders and I am so glad that I checked these forums. The escrow account situation is one of those things I would never think about when considering a lender, but I see that it has caused major headaches for more than one investor using Lima One. Thanks for making this information available and good luck with your efforts to make things right. 

-Jason

[Cody Neumann]

@Terri Dyer

The fact that bigger pockets real estate podcast has been advertising for Lima one on recent podcast worries me that they don’t know about this. I recently refinanced with Lima one a few weeks ago and didn’t know about this so hopefully it doesn’t go south

[Timothy Hero]

I've never done mortgages with them, but I have several clients that have and they tend to have more complaints than compliments.

[Dalton Elliott]

Originally posted by @Jason Harville:

Hi,

I am in the process of researching lenders and I am so glad that I checked these forums. The escrow account situation is one of those things I would never think about when considering a lender, but I see that it has caused major headaches for more than one investor using Lima One. Thanks for making this information available and good luck with your efforts to make things right. 

-Jason

Hi Jason -- full disclosure: I work for Lima One Capital.

We have recently taken significant steps to remedy the concerns you referenced, including bringing aboard new personnel and investing in heavily in tech improvements. I'm certainly available to discuss any questions or concerns, as is our team of nearly 200 in our Greenville, SC headquarters.  

Some issues on BP have been related to errors, admittedly. Though we strive to deliver a seamless, world-class experience in every single interaction, we sometimes fall short. Regarding concerns that have been noted on this particular BP thread: For the sake of all of our investors and their tenants, our loans clearly list requirements that a borrower must maintain through the life of the loan, including requirements about insurance coverage and pre-payment. Once these requirements are agreed to on signed loan documents at the origination of the loan, we enforce these requirements. We have found that they are the best way to ensure our clients’ success and allow us to offer all investors the best financing options possible. Likewise, we expect our borrowers to hold us to our commitments as defined on these signed loan documents. We are also unaware of any lawsuit that has been reference in this thread.

[Salvatore Lentini]

I have one loan with them now from back in the day that I am refinancing.  I did not have a great experience with them.  I've worked with many alternatives to Lima One with positive results.  These are the same lenders I used to grow my portfolio to 127 rentals (a number I'm hoping to double this year!)

[Tim Nisly]

I wouldn't recommend LimaOne at all. Spent a few weeks on a refi on a multifamily rehab project, rep sold it hard as 85% LTV and 100% repair costs. After I spent hours assembling the paperwork and submitting, LimaOne's sales rep went to underwriting and came back with a laughable cap of 50% of repair costs. I think I did, literally, laugh out loud at the poor guy. Seemed like a pretty amateur operation.

[Mitchel Schwindt]

very helpful

suggestions for lender? SFR or small multifamily

[Jay Hinrichs]

@Terri Dyer while I understand your frustration but keep in mind HML are not subject to many of the requirements you mention.. now pre payment penalty being miscalculated I get that but the other stuff you are talking about HML are exempt from.

Lima one has financed a few of my new builds when my bank lines of credit were all used up so just over flow funding. while not perfect they did fine on those.. 

[Zachary Yaklin]

Hello Terri, thank you for your post.  I am currently experiencing the same issues with Lima One and Rushmore, their new servicer.  They also told me the prepayment penalty was waved on 20% of the loan amount each year, which i have in emails but not in the documents.  They said they will not honor it.

They do not pay taxes on time nor insurance.  I filed a complaint with BBB and that didn't do much.  I am looking into CFPB as well.

I am curious how your lawsuit went.  I'd like to look it up because i want the same remedy; to be clear of them without the prepayment penalties.  

Any suggestions?  I am in MI but i imagine you sued them in NYC court?  An attorney recommendation would be nice as well.  It would save me alot of money.

Thank you, 

Zach

[Terri Dyer]

Hi.  I sued them in Georgia Fulton county Magistrate as per what part of my loan documents said they were based & where they were under the authority of.   I just went to small claims and represented myself and only sued to get back the pre-payment penalty (which in the long run was a mistake for not asking for more).  The small claims judge lectured them for their “negligent at best bookkeeping practices & their attitude about the entire thing”.  I won in small claims representing myself.  Lima One, however appealed the decision to a higher court forcing me to get a lawyer.  Because I asked for so little lawyers basically told me I’d need $20,000 down & I had only asked for $10,000 (prepayment penalty).  They advised even winning I would spend more in lawyer fees than I’d get back and judges rarely award lawyers fees.  So I dropped it.  But the morals of it, they really need to be held responsible & accountable they can’t just not pay escrow funds allowing insurance to lapse is illegal.  I would love, if enough complaints eventually come in, the consumer protection agency would take them on as a class action law suit.

[Zachary Yaklin]

Thank you Terri, sorry it didn't work out.  I have a friend that is an attorney.  I will see what he has to say and what the likelihood of a class action are.  How many do you have? 

Also, i believe you can also sue for attorney fees. 

I did not know you could appeal a small claims court ruling.  :(

[Terri Dyer]

What do you mean by how many do I have (of what)?  You can, but in Georgia the couple lawyers I talked to said judges there rarely reward them in a suit.  I didn’t realize they could appeal it either; at least without just cause.  Because of course the loosing party is never going to agree with a judges decision, but that’s not a good reason.  But apparently in Georgia they can appeal and do an entire new case in the next highest court without any questions as to why the appeal.

[Account Closed]

Originally posted by @Terri Dyer:

What do you mean by how many do I have (of what)?  You can, but in Georgia the couple lawyers I talked to said judges there rarely reward them in a suit.  I didn’t realize they could appeal it either; at least without just cause.  Because of course the loosing party is never going to agree with a judges decision, but that’s not a good reason.  But apparently in Georgia they can appeal and do an entire new case in the next highest court without any questions as to why the appeal.

Suing won't get you where you want to go, as you've found out. But, filiing a complaint with the State Attorney General might.

[Joe S.]

IMO All escrow departments have dropped the ball before and will do it again. 😞

[Rick Baggenstoss]

Why not keep the suit?  I think the pending case will cause them to ultimately settle with you. It's too expensive for them to pursue as well.  It does sound like the requested damages were pretty limited so spending time on this is a nuisance.   Given what came out in the first lawsuit, their bad bookkeeping, bad attitude, etc. will not go well in front of a Fulton County jury, but you'll never see one.  They'll make sure of that.  You might consider hiring a lawyer who gets everything $20k after you get your prepayment penalty.  I'm sure they'll be able to turn this into a $100k lawsuit with settlement that works for both of you.

As @Dalton Elliott states, Lima One will try to enforce their policies regardless of your experience, their mistakes, or perhaps in the spirit of compromise.  

That's a challenge because investing/rehabbing is a bumpy road. A HML who refuses to be flexible under any circumstance is a really bad financial partner. As we head towards a more dicey market, supply chain issues persist, investors need to understand how HMLs can flex with their clients.

[Winfred Keith Ridley]

Thank you for the information in this thread. I saw a FB post about Lima One this morning and saved it. When I came back to do some investigating I ran across this thread in a Google query so my decision is to stay away from Lima One! It pays to do your due diligence!

[Lisa Fairey]

Unfortunately I have had similar negative experience with Lima One as of August 2022. First I was told my rate would lock after appraisal, but they didn’t lock it. Not sure why. The rate went up 1/2 a point by the time we closed. Took forever to get paperwork, once they missed a deadline where I had to get to documents notarized and we had to reschedule. Then after we close, I found out the loan repayment doesn’t begin until six months after we signed, not sure why. I think it's standard for the loan repayment to begin within two months or so, but maybe I'm mistaken. That's on me for assuming this is standard. Part of why I wanted the loan was to build my credit. That was important to me so I should have double checked that. Still I find that odd. Finally, the biggest kicker, two months after close, they notified me that they made an error with the end loan date by one month and have requested for me to re-sign papers. I have to take a day off work to go to the notary to correct their mistake at my expense. The difference owed is roughly $700 or so. What's frustrating is that there seems to be zero accountability for their mistakes. It all falls on the borrower. If they have zero accountability, they will continue making these errors. The worst part is that they could default the loan if I don't take care of this within a week and I haven't even started making payments on it yet. This is so distressing!!! I think Lima One has forgotten that they are dealing with real people, their families and their livelihoods.

[Robin Simon]

Quote from @Lisa Fairey:

Unfortunately I have had similar negative experience with Lima One as of August 2022. First I was told my rate would lock after appraisal, but they didn’t lock it. Not sure why. The rate went up 1/2 a point by the time we closed. Took forever to get paperwork, once they missed a deadline where I had to get to documents notarized and we had to reschedule. Then after we close, I found out the loan repayment doesn’t begin until six months after we signed, not sure why. I think it's standard for the loan repayment to begin within two months or so, but maybe I'm mistaken. That's on me for assuming this is standard. Part of why I wanted the loan was to build my credit. That was important to me so I should have double checked that. Still I find that odd. Finally, the biggest kicker, two months after close, they notified me that they made an error with the end loan date by one month and have requested for me to re-sign papers. I have to take a day off work to go to the notary to correct their mistake at my expense. The difference owed is roughly $700 or so. What's frustrating is that there seems to be zero accountability for their mistakes. It all falls on the borrower. If they have zero accountability, they will continue making these errors. The worst part is that they could default the loan if I don't take care of this within a week and I haven't even started making payments on it yet. This is so distressing!!! I think Lima One has forgotten that they are dealing with real people, their families and their livelihoods.

 Wow this sounds like a horrible experience!  Thanks for sharing for others and I can confirm this is not normal behavior from lenders, you should have had a completely different experience!

[David Britt]

I worked with them and their Rental 30 loan over the summer of 2022.  Took 3 deals to close with them, but none of it was their fault.  Deal one, backed out after the inspection.  Deal two, title found some funny business and I backed out. Deal three, no problem.  You don't lock in a rate, so rates will fluctuate while you're under contract.  If you know that going in, it won't be a surprise.  My rate actually dropped right before closing.  Banks present particular hurdles.  Lima one, for the most part, bypasses bank hurdles, but does present unique hurdles of their own.  Pick your poison, so to speak.  I like Lima One and will use them again.  They were on top of things, very helpful and very responsive to my questions.

[Robin Simon]

Quote from @David Britt:

I worked with them and their Rental 30 loan over the summer of 2022.  Took 3 deals to close with them, but none of it was their fault.  Deal one, backed out after the inspection.  Deal two, title found some funny business and I backed out. Deal three, no problem.  You don't lock in a rate, so rates will fluctuate while you're under contract.  If you know that going in, it won't be a surprise.  My rate actually dropped right before closing.  Banks present particular hurdles.  Lima one, for the most part, bypasses bank hurdles, but does present unique hurdles of their own.  Pick your poison, so to speak.  I like Lima One and will use them again.  They were on top of things, very helpful and very responsive to my questions.

 Considering the "unique hurdles" you've experienced, wouldn't it be smart to explore other options or at least shop around for your next deal?

[David Britt]

Quote from @Robin Simon:

Quote from @David Britt:

I worked with them and their Rental 30 loan over the summer of 2022.  Took 3 deals to close with them, but none of it was their fault.  Deal one, backed out after the inspection.  Deal two, title found some funny business and I backed out. Deal three, no problem.  You don't lock in a rate, so rates will fluctuate while you're under contract.  If you know that going in, it won't be a surprise.  My rate actually dropped right before closing.  Banks present particular hurdles.  Lima one, for the most part, bypasses bank hurdles, but does present unique hurdles of their own.  Pick your poison, so to speak.  I like Lima One and will use them again.  They were on top of things, very helpful and very responsive to my questions.

 Considering the "unique hurdles" you've experienced, wouldn't it be smart to explore other options or at least shop around for your next deal?

 Yes, it would, you're exactly right.  That's how we ended up with Lima One in this case.  Every lender has requirements and rules by which you must play.  This year, Lima One worked best.  Next year?  Watch this space.

[James Pelusio]

Lima One is awful. 

[Nou Xiong]

I am so disappointed with their their service.  They make it sound so simple and easy initially, but when you're actually in the process, that's when they come at you with surprise after surprise of fees and obligations and then make it sound like it's your fault. It's true they don't disclose any fees and process up front, even when you ask for it, they'll say they'll sent it, but never did. I feel like they're not working with you, but against you.  After making me pay for 2 appraisals which cost me already 1k for a single family home, they came back and wanted to get a septic report or they will include 10k in the rehab budget in lieu of this report.  I did not have a good experience with them and never again will I have anything to do with them.