Searching For a Reputable and Trusted Resource for Hard Money Loans? Private Money Utah Is Your Source!
Mortgage scams and other lending scams are common in today’s tight credit markets. Banks aren’t lending and everyone is looking for private money loans to fund their investments and businesses. When the market demand is high for anything, there are always crooks in the marketplace that try to rip their customers off. In private money/hard money lending, there are plenty of lending scams everywhere you look. Here are 3 tips for avoiding popular lending scams:
- Run away from fee collectors: A lending scam is usually present if high, upfront fees are paid directly to the lender. A client asked me about hard money lenders in Utah and specifically about a lender I had never heard of. I suspected the reason I had never heard of this lender is because they are a lending scam that charges hefty upfront fees. The client confirmed this and said they asked him for $3,000 to underwrite a loan. This hard money lender in Utah is obviously running a lending scam so run away fast!
- Look for reviews about the lender online: If you find good reviews, but you also notice some very bad reviews, take warning. For example, one of our clients was looking for a type of loan that is very hard to get. We eventually were able to secure the client a USDA loan, but prior to this loan funding, the client was taken for $3,200 by a fee collector lender. This occurred prior to the client coming to our company. After researching the lender online for the client, I found good reviews but I also found some very bad reviews. Some reviews said the lender took money upfront and then never funded the loan. But some reviews sounded positive, saying the hard money lender funded their loans. I told the client that I thought their money was probably gone, and unfortunately I was right. When looking for reviews, be sure to look beyond the first 3-4 pages of a google search. You can sometimes find ‘dirt’ on a lender if you search deep enough.
- Obtain references from the lender: Although real references are hard to verify, always ask for references from the lender’s clients. If only one reference is provided, this may be a red flag. Unless they have great reviews or come highly recommended from a trusted resource, if a lender refuses to provide references, this is usually a lending scam.
Banks are only giving loans only to the most qualified borrowers. Private lenders are a great source of non-bank loans that can fund fast. But finding the real private /hard money lenders is becoming more and more difficult due to fraud and rip-off artists. Make sure you do your research on a lender before giving them any kind of upfront fee.