5 Red Flags to Spot a Hard Money Loan Scam
5 Red Flags to Spot a Loan Scam
Loan scams are a big problem in hard money loans, so it’s important to know the red flags to identify a loan scam. The most common loan scam is a fee scam, also called an upfront fee scam.
Because real lenders also charge upfront fees in order to protect their time, how do you spot the scam artists?
In the upfront fee scam, the lender will require an upfront fee to be paid, prior to funding the loan. These upfront fees can be called a variety of things, including legal and administrative fees, due diligence fees, or underwriting fees.
Here are 5 red flags to know if you are about to be a victim of an upfront fee scam:
- Overseas lender that lends in the U.S.A.
- Lender claims to be located in the U.S.A. but is actually located overseas.
- No requirements for loan approval.
- Do the terms seem too good to be true?
- A fancy office does not mean a lender is legitimate.
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