Tuesday, May 22, 2012

Multifamily Finance and Predatory Lending | Multifamily Insight Blog

Predator lenders will prey on anyone.? Their field of expertise remains un-restrained.? Why rip off five or ten consumers when one fake commercial loan can yield the same output (for the predator).

The single best method for avoiding predatory lenders is to talk to lenders; lots and lots of lenders.? The mortgage banking business is filled with hard working, honest, sincere professionals.? The profession also has its fair share of sharks and stingrays.? The only way to tell the difference is to network.

One? method used by scam artist and predator lenders?is to isolate their potential?mark (that would be you) and? smother the person with so much attention and paperwork they have no time or appetite to discuss the matter with outside parties.? These ?outside parties? (according to the predator lender)?are people like? your spouse, business partners, friends and? other lenders.?

Another method is the predator attempts to place YOUR loan on THEIR timeline.? Sounds? reasonable at first as any loan must have a start and finish timeline.? The issue with the predator lender that should raise suspicion is when their timeline has nothing whatsoever to do with your timeline.?

For example, if the current mortgage has six months remaining until the first day it can be paid in full without penalty, a?predator lender demanding loan fees and third party costs be paid NOW should raise suspicion, right?? As in the normal course of business appraisals cannot be completed months prior to closing a new loan.? If they are this just increases your costs as the appraisal will require an update.

When it comes to obtaining a commercial loan the best thing is to STAY IN THE MAINSTREAM.? The mainstream includes community banks (local) nationally known lending sources, members of the Mortgage Bankers Association and known insurance companies. Another way of saying this is to do business with people that can be found without much trouble.?

One of? my friends that has traveled the world?shared with me that?his best experiences were when he?sought out certain people? and places, versus when people sought him out (as a known tourist) being dragged to places he had little interest.? I think the same holds true when seeking a commercial loan.? If you are?being dragged into the loan, let go of the rope.? Better to fall where you are than suffer more damage.?

Being? in the real estate business on a full time basis means you already know some? lenders. If those you know are unable to assist with the type or amount of? loan you seek, ask for referrals. Being a known entity in the business, people you know will assist in this endeavor.?

If you?re not on LinkedIN by now PLEASE join.? This is a great place to network.? Add me as a contact; I welcome connect invites.? Join Property Management Professionals on LinkedIN; this is the biggest PM group on LinkedIN.? Also, check out Multifamily Biz at http://www.multifamilyBiz.com. This site is a great resource ?for conferences and real time news in the industry including?who is getting loans done.? ?

When in need of a commercial loan, start with? people you know, go next to referrals and then local and national resources where the people working there can be contacted in the normal course of business.? Avoid people that you can never meet (even if you wanted to) or those working exclusively from a cell phone and those with no street address.?

My objective here is not to shut out the independent broker-lender.? But too many times I?ve talked to people that shipped off a two-page ?loan application? and with a $10,000 cashiers check that was never seen again.? Don?t let this be you.

About This Blog
Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily property management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel.? For more information, visit: http://www.MultifamilyInsight.com

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