I had a Realtor and his Buyer call me, wanting a fast loan. The Buyer didn’t want to miss out on a good property buy in San Mateo County. He was able to do a 35% down payment but needed a $460K loan to complete the purchase.
With our Hard Money programs, getting fast real estate financing for that loan to value on a non-owner purchase was easy. Both Realtor and client were very appreciative to get the loan done in 8 days. Now that’s what I call a great catch of the day!
If you or someone you know needs a fast loan or is having difficulty with loan approval for a purchase or even a refinance, call 707-523-2099, we are here to help.
A private money loan is basically considered a cash sale by the Seller, making the possibilities of closing the deal more certain. The offer is still considered a loan, but it comes with several benefits that both parties will appreciate:
1. No loan contingencies, since the borrower and property have been fully vetted before you write the offer.
2. No appraisal contingencies. Although the borrower can order one, the offer is not dependent on the outcome, since most private money loans require a sizable down payment.
3. Quick closing. Private money loans have been known to close in a much shorter period of time than traditional lenders and banks. It is reasonable to close in 10-15 days as opposed to a month or longer.
4. Property condition is not as great a concern. Less than pristine properties are easier to purchase with private money since this type of loan is considered “all cash” and is based against equity or loan to value.
Private money, also known as hard money loans, can be a viable option in the real estate financial world and are of considerable interest to Borrowers, Sellers and Investors today.
If you or someone you know is interested in getting such a loan or have further questions, call me at 707-523-2099 and I’d be happy to help!
Recently it has become increasingly clear that private equity is an attractive option for pension funds. Because the ultimate question in any investment decision, big or small, is the return on money, Investors are turning to private equity funds to bolster their portfolios.
After the lean years that followed the 2008-2009 financial crises, the performance of private equity funds has started to outpace the market. Contributing to the interest in this type of investment is the volatility of other public and private markets. Private equity is not subject to the same daily volatility of other investment options, such as the stock market, from emotional reactions and headlines.
When you consider the investment goals of the typical pension fund investor, long-term capital appreciation is at the top of the list. You won’t find the fluctuations of the bond and equity markets in private investments, making this option a far better place to entrust your funds. The private equity industry has matured and become more diverse in recent years making it a viable option for Investors looking to grow their finances.
My family owned and operated Hard Money Company has been in business since 1988. If you have any interest in investing in California trust deeds, then call our office at 707-523-2099 as we regularly have these available.
The purpose of this article is to encourage investors to continue to make these loans, in spite of the rumors that exist surrounding them.
I will start off this article the same as the beginning of Part 1, by saying that I will always offer loans to homeowners that are owner occupants. It is an important segment of lending and a heck of a niche for my office. I will say that the feds have brought about a lot of regulatory protections for this class of Borrower, but that is simply because they have determined home ownership to be such an important right and should be protected. It’s kind of like car seats for kids, seat belts, speed limits, food labels, movie ratings, warning labels on medications, etc., etc.
I will also tell you that there has not been a foreclosure of an owner occupied loan originated by my office (that I am aware of) in the last 6 years. This is key.
There are really just 2 quasi-objectionable regulations that apply to owner occupied transactions.
The loans can be rescinded for up to several years if the correct disclosures were not made at the beginning of the loan. Rescinding a loan means that the Borrower gives back the principal and the investor (and the Broker) give back the interest and the fees. I asked our attorney about the incidence of this and he had no answer. I have never heard of it happening. I have also done tons of research on line on the subject and cannot find case law that applies. That is proof that, while there is lots of regulation, the occurrence of legal problems with these loans must be minimal as I cannot find anything on the subject.
These loans take longer to foreclose upon. As these loans are required to be serviced, this is a servicing question. The regulation requires you wait 120 days to begin the foreclosure process. Then it’s just the regular foreclosure timing. From my experience, most investors would wait this long at least. Add to that the fact that we have not had a residential foreclosure (that I am aware of) in the last 6 years and it really is much ado about nothing.
So, statistically, owner occupied loans don’t get foreclosed upon in any significant number (zero in my office), Borrowers do not rescind the loans in any significant numbers (I cannot find any mention of it on line), the loan to values are good, they have an ability to repay the loan, they have an exit strategy, they pay the property taxes and insurance monthly, they do a consumer credit counseling class and the properties will likely appreciate in the coming months and years.
So if you hear mention of avoiding these loans, show whomever has said it these articles. These loans are important and a very good investment.
This will be the first in a series of articles that will explore the varied types of loans we offer Investors.
Let me start off by saying that I will always do loans to homeowners that are owner occupants. It is an important segment of lending and a heck of a niche for my office. It also has the most regulation by the state and feds who, in their infinite wisdom, have decided that this category of homeowner needs protection. Lots and lots of protection.
I will also tell you that there has not been a foreclosure of an owner occupied loan (that I am aware of) for the last 6 years. This is key.
These are generally very good loans. Most are just shy of getting 30 year fixed rate loans at or under 4% from what we call “A” paper lenders like Wells Fargo, Chase or B of A. Most are turned down due to something in their credit. Second most are turned down due to income. Problem property is the third reason. All the turned down loans that we write have down payments of between 20% and 60%.
Many mortgage brokers have backed off of this type of loan. My guess is they have been run off by the profusion and confusion of regulations. The tragedy is, they have run a lot of investors off of this type of loan. And really, it’s not that tough to know the regulations and comply. Yeah, there has been a lot of regulation, but my viewpoint is that you get your wits around all of it and simply comply with the fed and state mandates and you do these loans. So that’s what I do and that’s why I promote this type of loan.
Almost all of the owner occupied loans that we write have an “exit strategy”. We never used that term before the proliferation of fed and state regulations in response to the recession, but here it is. We write these loans as 15 years loans but I would wager none will go to that term. I looked at the statistics of the owner occupied loans we have written that are serviced and the ones that had paid off lasted an average of 11 months. So we make 15 year loans but they most likely will not last that long. And if they do, hallelujah!
One thing I must mention that I think increases the security of those loans, is the fact that the feds require they be impounded for the payment of property taxes and insurance. The feds did get that one right. You know every month that those items are paid and not accumulating.
The feds also require that the Borrower on an owner occupied loan demonstrates an “ability to repay” the loan. We don’t even write the loans if they cannot prove they can repay the loan. We turn down quite a few requests, even with a ton of equity, because they cannot prove their income.
Last item to mention is that the feds mandate these Borrowers do a consumer credit counseling class before the loan records. The counselor takes the disclosures for the loan and does a budget talk with the borrower. It’s done over the phone and takes about 45 minutes to an hour. This theoretically makes for a more informed Borrower. Makes sense to me.
So, statistically, owner occupied loans don’t get foreclosed upon, the loan to values are good, they have an ability to repay the loan, they have an exit strategy, they pay the property taxes and insurance monthly, they do a consumer credit counseling class and the properties will likely appreciate in the coming months and years.
So much change has been wrought in the lending industry since what has been deemed the “mortgage debacle”. With the dust somewhat settling on the new lending landscape it’s time to inform Investors, Brokers & Borrowers of some of the regulatory changes impacting Hard Money. These changes impact each & every one of you. I’ll see YOU on May 10th.
Increase your income doing hard money loans & learn more about investing safely by attending our Hard Money Seminar with local attorney as guest speaker! 5:30pm on TUESDAY, MAY 10th at the offices of Sun Pacific Mortgage – 800 Mendocino Avenue #2, Santa Rosa. RSVP please