Alubek , in over 4000 foreclosures I have not had one come over hardmoney\court questioning preditory.
what I am saying is that out of the number of foreclosure cases we have handled, the only ones that have noted or brought out preditory lending issues did not invovle hard money loans.
RESPA has changed there views several times on preditory lending in the past few years. The biggy that they are watching for is intentional placing of a loan that does not have the financial chance of repayment .
The income is not there for the monthly debt.
The last congressional on the subject had the president of Ameriquest explaining how they qualify people for there loans and still have a large % of foreclosure actions.
OK not hard money I agree but never the less this was what was putting up red flags.
It is a grey area. How is it grey? Respa only covers residential loans. Most hard money lenders will not allow anyone to occupy the property. They say that they doing a buiness loan secured by real estate.
From what I know, RESPA is not covered for hard money lenders. Basically hard money lenders can charge what they want to give the loan. Also, RESPA is almost always covered for banking institutions, for either residential or investment.
We just covered a lot of this in a thread in the Law and Legal forum. While many hard money lenders don't loan to occupied properties, the real key is the fact that it is a temporary loan.
Now the other issue you need to look at is your state's mortgage laws. In Maryland, the statute specifically excludes mortgages for NOO properties from the residential mortgage statute, and therefore the hard money lender does not have to be licensed, nor does he have to abide by residential mortgage law. You will want to check your state's laws.
If you want to read the other thread, it is in the law and legal forum under fees for raising money.
RESPA my other good book next to my bed..
could you give me a little more on what you are looking for
Thanks Brad
Has anybody lent hard money and had legal issues with RESPA?
Alubek , in over 4000 foreclosures I have not had one come over hardmoney\court questioning preditory.
what I am saying is that out of the number of foreclosure cases we have handled, the only ones that have noted or brought out preditory lending issues did not invovle hard money loans.
RESPA has changed there views several times on preditory lending in the past few years. The biggy that they are watching for is intentional placing of a loan that does not have the financial chance of repayment .
The income is not there for the monthly debt.
The last congressional on the subject had the president of Ameriquest explaining how they qualify people for there loans and still have a large % of foreclosure actions.
OK not hard money I agree but never the less this was what was putting up red flags.
Brad
Brad:
That's very helpful. Thanks.
We've read some conflicitn legislation regarding the question of whether RESPA and predatory lending even applies to investment proerpty.
Some legislation specifies "owner-occupied" proeprty, others dont say anything at all.
Anybody ever had any expereince, with predetory lending?
It is a grey area. How is it grey? Respa only covers residential loans. Most hard money lenders will not allow anyone to occupy the property. They say that they doing a buiness loan secured by real estate.
Is it a business loan?
Or a residential loan?
From what I know, RESPA is not covered for hard money lenders. Basically hard money lenders can charge what they want to give the loan. Also, RESPA is almost always covered for banking institutions, for either residential or investment.
We just covered a lot of this in a thread in the Law and Legal forum. While many hard money lenders don't loan to occupied properties, the real key is the fact that it is a temporary loan.
Now the other issue you need to look at is your state's mortgage laws. In Maryland, the statute specifically excludes mortgages for NOO properties from the residential mortgage statute, and therefore the hard money lender does not have to be licensed, nor does he have to abide by residential mortgage law. You will want to check your state's laws.
If you want to read the other thread, it is in the law and legal forum under fees for raising money.