Do hard money loans go on your credit report ? Or are they fully non-recourse?
I could be wrong but I don’t think these 2 things have anything to do with each other.
In most states they are non-recourse loans. I think about 6-8 states have recourse of some type.
It is up to each individual lender as to whether they choose to report to the credit agencies.
My guess is that a smaller lender such as myself, which is more like a “private mortgage” would be less likely to report but a larger, national lender would be more likely to report.
You’d better believe they’ll go on your credit report if you don’t pay the money back.
I would expect that a hard money loan would involve a lien recorded against the real estate. It’s possible that might be picked up by the credit bureaus.
I’ve had private mortgages and they never showed up on my credit report, but they were seller financed, not a from a hard money lender.
I agree that you should expect to see it on the report if you don’t pay. A formal FC process will certainly show up.
I don’t know how many lenders work like I do. I like to avoid the formal FC process so I offer to not report a default in return for an easy deed in lieu process. It is a win/win.
So again, it is worth asking the lender their policy if this is a concern.