Updated over 5 years ago on . Most recent reply
Beware of Insurance Scams from Private Money Lenders
There’s a fairly new scam in private money loans that is being pushed by fake private money lenders. Any non-bank loan from a private money source is considered a private money loan, including bridge loans, hard money loans, and all types of alternative financing. If anyone offers you a loan, but first asks that you purchase some sort of insurance such as life insurance, loan insurance, etc., this is a scam. The only type of insurance required for a loan is hazard insurance for the property itself. This is obtained through your own insurance agent as well, and is very similar to homeowners insurance for a personal home.
If anyone offers you a loan but requires you to obtain life insurance or some other form of insurance other than hazard insurance for the property itself, this is likely a scam.
Posted by Corey Curwick Dutton, Private Money Lender