A couple of months ago I ask for a recommendation for a Hard Money Lender. I than recieved a PM from a company in Flordia. He requested the normal HML documents and assured me that we could close within 3 weeks. I sent him the documnets and the document fee of $1250 for both properties. This guy called me and contacted me everyday up until after I gave him the money. he tells me that the company he was working with went out of business, now he says he con’t controll the lenders but he is working on it. What action should I take on this company. I dont want others to fall into the same trap i did with this company. And I want my money back. I notice on many of the HML website that they want you to pay up front, but what is to stop them from getting your money then says oh the lender I had in mind went out of business and i’m keeping you money? Do do business with this guy or his company! :banghead
Any legitimate "Hard Money Lender" should not charge upfront fee's, with the exception of the cost of a credit report ($30 dollars roughly) to set up and approve a loan to you for a property.
All lenders fee’s and cost’s are in a set up fee, points and interest rate; all of which are paid at closing of escrow in your closing documents!
How do you handle it, take the guy and company to small claims court or chock it up to the cost of education, and stop dealing with that guy or that company!
I checked them out they a BBB score of A-. Is there anything i can do? I have the wensite and address etc. I want my money back and to warn everyone to stay away from them.
If they have a BBB score of A-, file a complaint with the BBB and see if they can resolve it or their score won’t be A- anymore. File one against the mortgage broker too if you can.
yeah I think i will. This sucks :angry
tell him you are filing a complaint with the attorney general’s office in Florida, and DO IT…its terrible to say but you have to cause enough discomfort that its easier for him to refund your money then put up with the pain your causing
I don’t know if your in Florida, but if you are,go to the office,walk in recording everything on a video recorder,
I would even consider writting him a letter outlining what happened, and tell him you will post it on every message board you can find with his name and contact info
If you know of an attorney who can do you a favor and write them a threatening letter saying that if they do not return the money withing x amount of days that you will file a complaint as a andydallas said with the AG office in FL.
For a broker to take upfront fees in anticipation of a loan is illegal in Florida…Now if you said the $1250 went to the law firm to start their due diligence on the loan I wouldnt say that is illegal…Because its quite typical for law firms to get shafted out of time spent fees because borrowers typically loan shop and or back out leaving everyone wasting alot of time into a deal that never happens…I dont think that other than filing complaints you can do much…And most likely this hard money (broker) is just some unlicensed middleman trying to broker deals for a spread…Very typical in the business…
We lend in Florida for close to 2 years and never have taken an upfront fee…We have been burned a handful of times because of loan shoppers but that is the nature of the business…This is why I always warn against teaser rates…If a client I have been working with leaves me hanging then suddenly reemerges weeks later asking for the loan they are turned away…I know full well they wasted my time and my firms time knowingly because they were caught up by a dream seller who probably took them for a few dollars promising a better rate or better terms that they knew full well they could never produce…
My advice is next time vet out the lender…Ask him about what deals he has closed in the region you are seeking a loan in…Ask him what law firm he works through…Ask to speak to that attorney…Sending money to some middleman is never something I would recommend…
Once again my group never asks for us to recieve funds in advance but what we do ask now is that the law firm get a deposit that will be credited toward their closing costs…You have no idea how many tire kickers there are in the HM arena…Pulling title,reviewing title,preparing loan docs,proof reading them etc costs money…This way if the borrower has a deposit with the attorney we know the person is serious…But this process only comes after the deal is approved for free…I turn down %70 of the deals that come my way and that comes at no charge…But once the terms and rates are agreed on I expect the borrower to step up and do the right thing or my attorneys dont start the process…
Wow that sucks. Please keep us informed how this went so we know how to deal with this in the future