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   COMMERCIAL HARD MONEY LOANS

Loan Scams and How to Identify Potential Red Flags


paperfree Aditi Bansal 29:14
Published on Tuesday, June 20, 2017

With the commonness of mortgage scams increasing every day, it is vital that you stay well informed to prevent a financial loss that can result from loan scams. If you have been looking for commercial hard money loans, take a long and a good look at the possible lenders.

tags  #Loan Scams  #Potential Red Flags #Credit History

 

To minimize the risks of a loan scam, you should be aware of the red flags or signs. Therefore you should be intense on finding a commercial hard money lender who is legit. How do you do so?

Lack of interest in your credit history

Loan approvals with no questions asked are obviously fake. If a lender approves your loan without asking anything about your credit history, that is absolutely a loan scam. When you submit a loan application that has been rejected by fake lenders, they usually instantly provide the loan. What they do is they look for an open fee to sell you a bogus insurance policy or even steal your private identity.

Loans offered by phone

It is unlawful for companies to promise you a loan through a phone or ask for payments before they come through. Fake lenders tend to do this most of the time. When reading the emails sent by them, you will see that they also lack Basic English grammar skills. This is a sigh that the fake lender is someone from in a foreign country. They are pretending to be real estate investors in the U.S. they don’t have the ability to make such loans; Therefore they try to steal your identity and try to make an upfront fee before making the loan.

Marketing fake insurance

An increasing problem in private money lending is insistent of fake insurance policies by bogus lenders. The fraudulent lenders pose as a commercial hard money lender and approve the commercial hard money loans with a condition of buying some type of life insurance policy. The only type of insurance is the Title Insurance and the Homeowners Insurance. They are only paid for when the loan is approved and closed. Other than the two, there is no other insurance. Be careful when pre-paying for any type of insurance before the closing of commercial hard money loans.

Always do a thorough research on every potential lender that you work with. Don’t also give personal identity information to them or pay upfront fees.



This page with a focus on Loan Scams, Potential Red Flags was shared by Aditi Bansal.

 
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