Description: The passage below mainly focuses on loanme login, talking about long scams in hard money specifically fee lending scams or fee scams also called upfront fee scams. The author offers you 5 red flags to spot a loan scam.
This is Cory from private money Utah. I’m going to talk about long scams in hard money specifically fee lending scams or fee scams also called upfront fee scams. What is it? It’s any upfront fee that a lender is trying to charge you in exchange for a loan prior to the loan being given.
You will get a letter of intent and all the terms are laid out for you beautifully. There’s this fee. That’s tacked on there. What is it called? It can be called legal fee, administrative fee, a due diligence fee and underwriting fee.
I’ve even seen these fake lenders trying to get people to buy life insurance. They give you the term sheet. All the terms are laid out and you’re approved. They ask you to buy a life insurance policy that would pay the loan off in the event that you died. It seems reasonable.
It’s a scam. How do you determine whether the lender that you’re dealing with is a scam artist or not? That’s the tricky part because even legitimate lenders are going to charge upfront fees. They want to convey you to the loan. They want to make sure that you’re serious about moving forward.
How do you determine if both of them are charging enough front fee? Which one is real? Which one is not? We’re going to talk about five red flags to make it easier on you to determine if the lender you’re dealing with is a scam artist.
First, I want to talk about overseas lenders with an overseas offices that claim to lend on real estate in the US. You’ve gone to them with a project real estate project or property in the US and they’re overseas lenders.
They’re located in London, Singapore or Hong Kong. Don’t deal with those types of people unless it’s referred to you from a friend or colleague business partner. Somebody has done business with these people before. You need to make sure about their legitimacy.
Second, the lender says he have an office in the US and he have a American sounding name. I know that’s not politically correct okay but the name such as Jim Smith or Paul Ryan. They say they have an office in the United States but you speak to this person over the phone and they seem to have an accent.
They seem that they may be from overseas. Read the emails that you’re getting from this person to see if they are in a broken English. They have an office in the US and they have a very American sounding name. If their English is poor, that is a huge red flag to look for.
Third, few or limited requirements to qualify for the loan. You’ve been looking for financing for a while. This lender is immediately provided you with a term sheet. There aren’t a lot requirements on the term sheet and they’re ready to give you a loan. That is not real. That is too good to be true.
Fourth, too good to be true. Have you compared the terms from other hard money and private money lenders? If the terms are 4% or 5% interest, we’re offering you a 60 year term. The other hard money lenders that you’ve talked to maybe they’re offering 12% at most a two-year term. The terms are too good to be true. If the terms seem too good to be true, they probably are jive.
Finally, it’s not a red flag but it’s a word to the wise. If a private money lender has a fancy office in Chicago or in New York and they have a fancy website, that does not mean that they are a legitimate private money lender. If they’re offering you a term sheet with the very high upfront fee such as fifty hundred thousand dollars, do your research.
There’s your five red flags for determining if the lender that you’re dealing with is a loan scam. I hope that it will help you and steer you in the right direction. Have a great night.