Capella Mortgage hard money lender in LV
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CA · Member since 2021 · 4 posts · 1 vote
5yHi all,
I came across this older post about Capella Mortgage and thought the following would be helpful for any members considering investing with Capella based on experiences of people I closely know.
Please do a web search of “Capella Mortgage Fraud” as investors are posting about potentially fraudulent deals Capella originated. In one deal referenced the poster highlights a major potential conflict of interest as Capella supposedly used an appraisal generated by the borrowers without disclosing this to investors, who later invested $3.9M to finish a luxury home Capella claimed was 80% complete. In this deal, the borrower soon defaulted and instead of foreclosing Capella raised another $1M from investors. The home, however, is still not finished 3 years later. Investors are angry Capella earned over $100K in origination fees on that deal and claim Capella did not do adequate due diligence, disclose conflicts of interest, and acted in their borrowers interest and not the investors interest.
I know others who invested in a problem Capella loan for a golf course with water rights and multiple home lots. Capella claimed the property was worth $5.8M. Similar story as the borrowers defaulted. Now Capella says the property will likely sell for significantly less than $5.8M. This is another deal where Capella earned over $100K in origination fees, the loan quickly went bad, and now Capella principal Corrine Cordon looks to further enrich herself by buying out investor interests at a discount (offering 75 cents on the investor dollar). Those I know in this deal are elderly, unsophisticated with trust deed investing, and relied upon Capella’s supposed due diligence. These investors should not have been in this risky of a deal. I believe borrowers must do their due diligence, but this looks to be another example of Capella either not doing adequate deal due diligence/underwriting/appraisal or fraud.
Investors are now coordinating and it has become known there are multiple problematic Capella deals in default. Investors are also beginning to file formal complaints against Capella with the NV Division of Mortgage Lending and other enforcement agencies. Be careful and please do your due diligence before investing with any HML!
8 Replies
- Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes8y
@Jay Hinrichs may know of them. He knows EVERYONE:)
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
nope don't know them all I Know is in Vegas you need brick and motor and you need state and NMLS license to do any loans.. I got a nasty gram from the state of NV when I just said I was thinking about making a loan there.
someone on BP I think turned me in.. I then I had to sign a sworn notarized statement saying I have never done a loan there.. the state acknowledged that I am NMLS registered but licensed in Oregon not NV..
As for properly collateralized performing notes in Vegas I think those are quite safe.
- Investor · Las Vegas. Jacksonville, Bay Area Ca, Nv, Ca, Fl · Member since 2015 · 511 posts · 220 votes8y
@Rick S., I've done business with Capella a couple of years ago. The owner Corinne is very knowledgeable and honest. She has a very straight forward approach in business. As far notes you will be dealing with Matt. My only complaint is communication, it can be difficult to get answers from office staff. During one business deal I had 3 different agents in their office taking over the file because of their employee turn over rate. Of course that was 2 years ago and may have changed. With that said, I would do business with again.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @John Thedford:
@Jay Hinrichs may know of them. He knows EVERYONE:)
quick check they are NMLS licensed and state licensed so good on that end.. when they come to Oregon they will need to get state licensed here.. and in WA no license required..
you see a lot of lenders say they loan in NV but many are not licensed there.. I think they just get NV corps for tax purposes maybe but they are not legal... and many are out right scammers..
- CA · Member since 2021 · 4 posts · 1 vote5y
Hi all,
I came across this older post about Capella Mortgage and thought the following would be helpful for any members considering investing with Capella based on experiences of people I closely know.
Please do a web search of “Capella Mortgage Fraud” as investors are posting about potentially fraudulent deals Capella originated. In one deal referenced the poster highlights a major potential conflict of interest as Capella supposedly used an appraisal generated by the borrowers without disclosing this to investors, who later invested $3.9M to finish a luxury home Capella claimed was 80% complete. In this deal, the borrower soon defaulted and instead of foreclosing Capella raised another $1M from investors. The home, however, is still not finished 3 years later. Investors are angry Capella earned over $100K in origination fees on that deal and claim Capella did not do adequate due diligence, disclose conflicts of interest, and acted in their borrowers interest and not the investors interest.
I know others who invested in a problem Capella loan for a golf course with water rights and multiple home lots. Capella claimed the property was worth $5.8M. Similar story as the borrowers defaulted. Now Capella says the property will likely sell for significantly less than $5.8M. This is another deal where Capella earned over $100K in origination fees, the loan quickly went bad, and now Capella principal Corrine Cordon looks to further enrich herself by buying out investor interests at a discount (offering 75 cents on the investor dollar). Those I know in this deal are elderly, unsophisticated with trust deed investing, and relied upon Capella’s supposed due diligence. These investors should not have been in this risky of a deal. I believe borrowers must do their due diligence, but this looks to be another example of Capella either not doing adequate deal due diligence/underwriting/appraisal or fraud.
Investors are now coordinating and it has become known there are multiple problematic Capella deals in default. Investors are also beginning to file formal complaints against Capella with the NV Division of Mortgage Lending and other enforcement agencies. Be careful and please do your due diligence before investing with any HML!
- Member since 2019 · 1 post · 0 votes1y
Amy: I need to correct your statements because they are not based on facts. The appraisal on the golf course was $7.1M. The amount loaned was $2.5M. The borrower defaulted. We foreclosed on Jan 7, 2021, which was during the COVID-19 disaster. Investors made offers to other investors to be bought out at 75 cents on the dollar (pretty normal process in trust deed lending - either stay in the deal until the end - or get out now at a discount.) The property went into contract for $3M while still under COVID restrictions. One of the investors brought the buyer to the table (my personal opinion was that the buyer did not have financing but I went along with it because that is what the investors wanted). The investors accepted it. 3 months later the buyer tried to reduce the purchase price to $2.6M to stiff arm the investors. Then the buyer walked because he actually didn't have his financing lined up so it was all a game. After that I moved to Colorado to manage the investment and I started purchasing shares and eventually paid off the remaining investors at 100% of their investment. I then poured another $8M into it to bring it back to its former glory by selling every asset I own. Yes, our borrower committed fraud. If you have been in lending since 2007, then you know that the level of fraud in deals has risen to a huge level. It used to be 1 out of 10 deals had some type of fraud indicator. Today it is about 5 in every 10. Keeping investor money safe in this environment requires extreme amounts of investigation. I bought out about 4 investors at a 75% discount and everyone one of them has a contract with me that says that when I am able to sell this property, they will get paid back the rest of the money owed to them. The articles you read were posted by one particular investor who was trying to manipulate the other investors. Fortunately, many of our investors had been through the foreclosure process before with Capella Mortgage and they knew how it worked, and they knew how Matt and I never ever stop working on their behalf and that we would make sure it worked out in the end. That is why most of them just let us do our jobs. They have profited many times due to our management of the real estate. It isn't easy what we do. It requires guts and determination and dedication and a lot of time. But that is why we - and our investors - make the big bucks.
The other deal you referenced was in Snowmass. That property was sold for a price north of $7M. I think it was $7.5M. 51% of our investors formed a group, took over the property, completed the renovations, and sold the property. That is their right to do. Brokers protect the interests of all of the investors, but investors only want to protect their own interests, which can leave some investors out in the cold. However, we are required by law to accept direction from 51% of the beneficial interests. We don't get to argue over it. We get to follow it. When the investors decide that is what they are going to do, then the minority's option is to either buy out the majority, or accept the will of the majority. That is how trust deed lending works. Half assed truths exists forever on the internet. That doesn't mean they are true, factual or objective. - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Rick S.:
I'm thinking of investing in some notes with Capella Mortgage. I know they've been around for quite a while, and I'm wondering if anyone would be willing to share their experiences they have had dealing with them, either as an investor or a borrower. They are a hard money lender in Las Vegas.
What do you mean "invest in their notes". How are you investing? Have you had an attorney review how you are investing? I would make sure however you are investing is clearly understood (see Norada search on BP).
I am not saying or comparing them to Norada, just saying that make sure you truly understand what it is you are investing in if you go this route.
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