Re: Where ARE these lenders?? - Posted by Ed Garcia
Posted by Ed Garcia on June 30, 2003 at 24:39:26:
Dom,
If you have been in the Mortgage business since 1982, then I disappointed how little you know about lending.
First of all, lets get off the foreclosure experts that come out of weekend seminars.
They don?t have a d@mn thing to do with Hard Money.
Secondly, Roy is not wrong.
I?ve been in financing and RE Investing since 1967. As a matter fact I?ve owned American Heritage Financial Corp. since 1980.
In that period of time I funded at least $100,000,000 in Just Hard Money.
I?m going to give you a definition of the term HARD MONEY as defined in our ?Glossary Of Common Terms Used In Loans And Lending? By Ed Wachsman in the ?How-To Articles? of this site.
HARD MONEY
Hard Money Loan. A loan that is underwritten with the condition and value of the property as the primary criteria for approval. Secondary issues may include the credit of the borrower, the ability of the borrower to repay the loan and/or the ability of the borrower to manage the property or successfully complete a rehab and sell the property. Owner occupancy, debt ratios and other issues are seldom a factor. Appraisals rather than purchase prices are used to determine value. Cash out purchases are often allowed and are another key benefit. These loans are usually approved within days and are often funded in two weeks or under with times as short as two or three days not uncommon. The cost for the benefits of speed of funding, lax underwriting and other advantages is typically a moderately high interest rate (usually low to mid teens) and high points (usually 5 to 10). (See definition of “underwriting” below.)
Now that you understand the term, I want you to know that because of Predatory Lending Hard Money is going through some significant changes.
From this day forward, Hard Money Lender no longer want to lend to Homeowners owner occupied, because of the Predatory Lending laws. This is a sad day for me Dom, because over the years I have helped many a homeowners who had bad credit, lost their job, what ever, save their home from foreclosure, giving them time to either get into the position to pay for it or sell it on their own salvaging the remaining equity rather then lose it in foreclosure.
After saying that, I can tell you that Hard Money will be more available for None owner occupied and in California were doing Commercial loans as well. I can do a Hard Money loan in California up to 1.5 million.
Dom, weather you agree or disagree, I can tell you that I?ve made Hard Money Loans safely for years. The attitude when making a Hard Money loan is that you?re making the loan to the property not the borrower. The protective is the equity position.
Ed Garcia