Challenges in Using Hard Money Lenders

[James McGovern]

I recently purchased a property acquired via foreclosure auction and wanted to use a Hard Money lender. I found that many lenders create a which comes first chicken or egg challenge. 

In the State of Connecticut, the court does not guarantee title until you close on the property. Many lenders want a clean title prior to handing over money for closing. Likewise, you often cannot purchase insurance on property that you do not own which causes closing attorneys to purchase insurance on the day of close. Many lenders want to see insurance in place as part of their "underwriting"

Are all hard money lenders participating in this chicken vs egg challenge or are there some that use common sense and have adjusted their practices to accommodate the various laws throughout the nation?

[Chris Seveney]

@James McGovern

As a lender common sense for us is we do not give money to a property that doesn’t have clean title or insurance on it.