All Forum Posts by: Sriram Kumar Bikkina

 Thanks for the information Julie, this makes sense and is helpful.

 Hi Chris, not a problem. I understand these are tough time for new investors like me who are just getting started and one fraud is all it needs to take their life savings away from them, so wanted to send this out to the community here.

Hello Everyone,

I am new to RE investing and am closing a deal by end of next week. I was almost a victim of mortgage scam and wanted to share my experience here so that it can help new investors.

Background: I closed a deal based on the numbers provided by my mortgage agent in early April. But the interest rate keeps rising and by the time I signed for a property and got to pre-approval, my affordability went do a lot. So I was trying to find private lenders and found this person on a real estate investment group on fb. I tried to verify his creds and everything but no success, the name seemed very generic like first and last names of some famous people in the history.

I was offered a fixed interest rate of 4.5% for the 25 years with 10% down and 5% as a refundable fee (Red flag). I never worked with a private lender before and since I am in a tight situation I decided to try it out.

Process: Sent most of my paperwork to him including my ids and bank statement and received an approval within one business day which is another red flag.  I got a call back from this person asking me to sign the paperwork which says their board of directors approved my loan. I started to investigate at this point and found a lot of red flags and confirmed that this is a scam.

Some of the red flags:

1. Payment terms are too good to be true.

2. The domain name was registered only 10 days ago.

3. The person who called me seems to have an accent from a country that mostly does these scams.

4. The approval came within a day without doing a credit check.

5. Just noticed that the person who I was talking to had a Texas address in his initial email signature two months ago and now it is a different address. His company as well is a different name now and when questioned, he said he works with different financial institutions and it keeps on changing based on the client profile.

I am not sure if I can name the person and company here so I will avoid doing so.

What's the Scam: So, they will approve me for the loan and will ask me to deposit the 5% loan amount processing fee so that they can release the final mortgage amount to my account. Once we send then the fee which ranges from $30,000 to $70,000 they will close their website, business, email, change phone numbers etc.

Luckily I did not go this far as I stopped as soon as I received the approval letter but the damage has been done where I sent my ids to this person. Now I will have to sign up for Equifax and keep monitoring the activity on my credit.


This is a lesson learnt for me for sure and usually I would be very careful when it comes to such scams and trusting people on the internet but I did skip that part and I regret it.

So, for the newbie investors, please make sure that when you go with private lending please only use the referrals and not through some online source.

Thanks a lot everyone for your inputs. I feel like I am dealing with fraud here but unfortunately sent my ids and bank statement to him last week, I will monitor my credit reports and look for identity theft or fraud. 

The data that makes me think this a fraud:

1. Payment terms are too good to be true.

2. The domain name was registered only 10 days ago.

3. The person who called me seems to have an accent from a country that mostly does these scams, may be he is one of the princes' there.

The company is called Pacific Service Corporation with the following loan terms which sounds too good to be true:

90% LTV, 4.5% interest rate within a duration of 300 monthly repayment schedule.
The loan down payment is 10points (5%) of total loan amount due after loan approval and it’s refundable when the loan has been paid off in full at closing.
There is no prepayment penalty.

Sharing it here so that it can benefit everyone starting out new. I will may be make a separate post as well.

Thanks,
Sriram

 Makes sense Eliott, thanks for your inputs. The bank is not financing to the 80% mark due to my income. Private lender promised me to finance upto 80% but interest rate has not been discussed at. I will bring it up discuss with.

Hello Chris, thanks for the tip, I will surely do this. Thank you.

Hello Everyone,

For my next deal that is closing soon, the bank did not offer me what I was promised or looking for but a private lender offered me exactly what I am looking for but I never dealt with private investors before.

Can the experts here guide me on the advantages and disadvantages of using private lender to close a deal? My major concern is around calling the loan back, which means private lenders might ask me to pay back before the term closes but I am not sure if tis happens often.

Appreciate your inputs.

 Thanks for your inputs Paul. Appreciate it.

 @Theresa, thanks for the response. Yes I knew there was no basement but I heard there is nothing wrong with it and when one of my friend mentioned I made a wrong decision, I started to worry. But my research stated I have nothing to worry about. I reached out to this forum to find out experts opinion.