Lender Scam: Has Anyone successfully worked with this company?

Private Lending & Conventional Mortgage Advice
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Lender Scam: Has Anyone successfully worked with this company?

Ndy Onyido
Toronto, Ontario · Member since 2014 · 615 posts · 172 votes

Hello BP Nation.

After reading the post with link below:

https://www.biggerpockets.com/forums/517/topics/60645-lender-scams-and-warning-signs-beware-protect-yourself-

I decided to share this experience to ensure no one is being ripped off by this practice:

I met this company through a trusted TK provider I was going to buy a property from.

The lender is a broker by the name Tony O’Brien who works with/for a firm called Summit & Crowne Capital Partners. Apparently he is a broker with this firm. He also runs a company-Real Estate Lender USA with NMLS # 1473497 as indicated on their site. Company claims to do rehab financing, bridge financing etc. However, he uses this company to collect upfront ‘application fee’ of $1,950 with no caveat should the loan not materialize, only a condition that $500 will be credited back at closing.

Now here are my red flags and I wonder if this is a deliberate guise to defraud the unsuspecting public:

1.He insists on collecting this ‘application fee’ of $1,950 upfront.

2.My understanding of brokerage is that the broker is compensated by the principal. I know he is a broker because the documents/forms he sends are from Summit & Crowne Capital Partners and Peak Asset Lending.

3.In fact, other forms , like applicant’s cashflow/statement of net worth etc were from Summit & Crowne for the same transaction, although the pre-approval letter he provided was from Peak Asset Lending ! .

4.This pre-approval for which he charges $1,950 upfront from his realestatelenderusa.com website is available for free on Peak Asset Lending website. (www.peakassetlending.com)

  • 5.Even the experienced TK provider who has been in the RE business for decades has not been able to get an approval for any of his clients from this lender.
  • 6.Appraisals come in way below market value—the one I paid for on his site was 40% below market and the TK provider was very furious. He said this has been the trend as if it was deliberate to disqualify applicant/transaction.

I need anyone who has successfully done a transaction with this guy to provide me with details of his/her experience. I can disclose the full details of the deals we have attempted to consummate that were all still births.

My primary goal is to make sure no one is taking undue advantage of the public here.

Thanks,

Ndy

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Tony O'Brien
Mooresville, NC · Member since 2015 · 8 posts · 7 votes
9y

This is a very disappointing posting from a very unqualified borrower. The real story here is a borrower, this Client comes to us with a property he wishes to purchase through a wholesaler. 

This Client brings us an address he wants to purchase from a wholesaler, 9007 E. 85th Terrace, Raytown Mo. 64138, the client wants a term loan on this property, we see no problem.

At this point we begin the underwriting process, and the client is going to pay the fees associated with this effort. Our effort includes, background, credit, legal, and finally appraisal. This client is a foreign national, not an issue for us but it does require an added effort because there is no social security number or credit score. Keep in mind we are now doing a non-recourse loan vs. the standard recourse loan. This is also added effort because there is more due dilligence with the Clients native country. 

Now the good news, we approve the client, no problem we can make the loan, the last step is the appraisal and this is where the client runs into trouble. Let's do some background on the property. If you google this address you will see it is in a difficult area, Raytown MO., but we are able to lend in this market. Keep in mind, conventional lending can't "redline" private money can, this means we can decline a property because of the neighborhood it is located, the price being paid to purchase or any other factor. So the Client who is complaining here is trying to pay $76,000 for a property that was bought by the wholesaler for $39,000 shortly before, great deal for the wholesaler, bad deal for the buyer who is trying to borrow money from us to purchase this asset. Furthermore, the comps in the area used by the appraiser are coming in at $58,000. 

As investors we are looking to buy a property that meets or exceeds the appraised value, right?  No one in their right mind would push to buy an asset that is worth $20,000 less then the appraised value.  On the lending side we are not going to lend based on the purchase price but the appraised value, we all know this, correct?  So this is the buyers delemma, he has to now bring the balance needed to pay $76,000 to the wholesaler vs. what I said I would led him. This entire process took two months. Why, because the wholeseller kept telling us the lender and the Client they would produce new comps to prove the appraiser is wrong, of course after two months they never do come forward. 

Now let me ask you, savvy investors, did we do what we promised? Of course we did, we honored our loan committment, at the appraised value, everyone knows the loan is based on appraised value not contract price. 

As a wholesale lender we sell every loan, most lenders today sell every term loan, even major banks. There is no money in servicing unless you operate that type of organization. The loan on my home has been sold 4 times since inception. Our fees are spelled out in the term sheet, the Client is paying for the hard work we must do in order to arrange our line of credit and the back end to accept the loan once it has been written. 

This Client want to be provided all the services, the loan and the closing and not pay any money and to be lent on a badly purchased property. The lesson here, services are not free, we work hard to insure our clients are provided the money they need for their project. We don't work for free, imagine if we had done all this work for free and had the same outcome, no fault of our effort but the failure is with the novice buyer who didn't do his homework. 

In closing, all the documents I discussed here are available for review. The Client needs to understand the investment business and why the onus of success is in the quality of his purchase, not on our ability to turn a poor investment into a funded project. The one comment I stress to our clients, "we are in the business of lending money." Should I complain we never made our two points on the transaction because of his poor choices?  

The final postscript, this client came to me with another poor choice, high cirme area which I shared with him. We don't close our effort once a client fails, we honor our committment to lend funds any time this Client can bring an asset we can lend again.

Every story has two sides, this Client firmly believes he has no responsibility in this effort. To accuse us of the actions he does is a poor decision on his part. When we fail its not due to our inability to perform, it is alway the client who fails to provide what is needed to succeed.

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  • Shaun Weekes
    Loan Officer / Processor / Life & Health Agent · Rancho Cucamonga, CA · Member since 2014 · 1k+ posts · 757 votes
    9y
    Originally posted by @Ndy Onyido:

    Hello BP Nation.

    After reading the post with link below:

    https://www.biggerpockets.com/forums/517/topics/60645-lender-scams-and-warning-signs-beware-protect-yourself-

    I decided to share this experience to ensure no one is being ripped off by this practice:

    I met this company through a trusted TK provider I was going to buy a property from.

    The lender is a broker by the name Tony O’Brien who works with/for a firm called Summit & Crowne Capital Partners. Apparently he is a broker with this firm. He also runs a company-Real Estate Lender USA with NMLS # 1473497 as indicated on their site. Company claims to do rehab financing, bridge financing etc. However, he uses this company to collect upfront ‘application fee’ of $1,950 with no caveat should the loan not materialize, only a condition that $500 will be credited back at closing.

    Now here are my red flags and I wonder if this is a deliberate guise to defraud the unsuspecting public:

    1.He insists on collecting this ‘application fee’ of $1,950 upfront.

    2.My understanding of brokerage is that the broker is compensated by the principal. I know he is a broker because the documents/forms he sends are from Summit & Crowne Capital Partners and Peak Asset Lending.

    3.In fact, other forms , like applicant’s cashflow/statement of net worth etc were from Summit & Crowne for the same transaction, although the pre-approval letter he provided was from Peak Asset Lending ! .

    4.This pre-approval for which he charges $1,950 upfront from his realestatelenderusa.com website is available for free on Peak Asset Lending website. (www.peakassetlending.com)

    • 5.Even the experienced TK provider who has been in the RE business for decades has not been able to get an approval for any of his clients from this lender.
    • 6.Appraisals come in way below market value—the one I paid for on his site was 40% below market and the TK provider was very furious. He said this has been the trend as if it was deliberate to disqualify applicant/transaction.

    I need anyone who has successfully done a transaction with this guy to provide me with details of his/her experience. I can disclose the full details of the deals we have attempted to consummate that were all still births.

    My primary goal is to make sure no one is taking undue advantage of the public here.

    Thanks,

    Ndy


    The only thing you can ask for up front is the appraisal fee and credit report fee. Typically, lenders don't ask for a credit report. Also the appraisal fee should be in the $350 to $750 range depending on the type of home, area and additions to the regular appraisal.

    If anyone ever asks for anything else up front and demands it, it's fraud. You don't even really need the appraisal until the approval comes in if you're suspicious. Although that would delay your loan.

    At any rate I hope you understand what I'm trying to convey. Take care and have a great day.

    2Reply
  • Mike Flatow
    Maitland, FL · Member since 2016 · 45 posts · 17 votes
    9y

    totally agree with @Shaun Weekes on this.  I'm really wondering how anyone justifies any upfront fees these days. There is not really any legitimate work in determining the quality of the borrower or the property to justify anything along what this broker is asking for. 

    0Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    9y

    Peak and Asset Lending appears to be a front. I don't see any licensing or compliance information on their website, which is the first thing I look for when a HML calls/mails/etc for my referral business - I'm checking out their website while politely nodding "uh huh" to their intro pitch, and just hang up if they aren't even bothering to pretend to be compliant. When I get to the "oh interesting tell me more" part, if I haven't hung up, then I'm off to the NMLS Consumer Access website to look them up there (while still "uh huh"-ing along), to see if it's just pretending to be compliant or not.

    Real Estate Lender USA and Summit & Crowne Capital Partners are the same thing. It has been licensed for a whopping 2 months and 25 days, since 12/20/2016. The head honcho person is also named O'Brien - who knows if the O'Brien you know has "gone rogue," is a real member of the clan, or if everyone is in on it.

    Link to NMLS Consumer Access website.

    2Reply
  • Patrick Anibaldi
    Temecula, CA · Member since 2016 · 75 posts · 38 votes
    9y

    Its a scam. Run!

    1Reply
  • George DespotopoulosBusiness Member
    Lender · New York, NY · Member since 2016 · 936 posts · 287 votes
    9y

    I stopped reading when you said

    "However, he uses this company to collect upfront ‘application fee’ of $1,950 with no caveat should the loan not materialize, only a condition that $500 will be credited back at closing."

    Too many legit lenders (private lenders, hard money lenders, non-bank direct lenders) out there who do not charge you anything near this amount upfront and will actually refund you a significant portion of an application fee if you don't close.

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  • Ndy Onyido
    OP
    Toronto, Ontario · Member since 2014 · 615 posts · 172 votes
    9y

    @Shaun Weekes

    Thanks for your inputs. But its disheartening that someone would be doing this to the public and has not gone to jail or have his license revoked.

    I understand your point. 

    1Reply
  • Ndy Onyido
    OP
    Toronto, Ontario · Member since 2014 · 615 posts · 172 votes
    9y

    @Mike Flatow

    Thanks. He insists on appraisal even before the pre-approval and the appraisal always comes in short

    1Reply
  • Ndy Onyido
    OP
    Toronto, Ontario · Member since 2014 · 615 posts · 172 votes
    9y

    @Patrick Anibaldi

    I just summoned up courage to make this post after speaking with him again. He talks smooth and makes the point that his firm is the largest network of lenders in the country.

    Thanks for your contribution

    1Reply
  • David Dachtera
    Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    9y

    @Ndy Onyido,

    Big sums up front are ALWAYS a red flag. Move on.

    1Reply
  • Ndy Onyido
    OP
    Toronto, Ontario · Member since 2014 · 615 posts · 172 votes
    9y

    @George Despotopoulos

    Thanks a lot.

    @Chris Mason

    You made my day by your comment that both Real Estate Lender USA and Summit & Crowne Capital Partners are the same thing. And to hear that they have just been licensed for only a few months contrary to the long years of business he claimed they have been existing?. As a moderator, is there any way service providers on this forum can be vetted?. It will be great of such a policy/process exists. 

    I will make sure he does  not defraud any other person.

    I have known Marco of Norada for a while and I know he always goes extra mile to protect his clients. Am sure he was not aware of this scammer.

    @Marco Santarelli

    I need you to read this post trail. Tony O'Brien is same person behind  Summit & Crowne Capital Partners and Real Estate Lender USA with NMLS # 1473497 and may have been using you and your company to defraud unsuspecting clients of yours. Now you know why all appraisals come short and you have not been able to obtain funding for your numerous clients.

    I will make sure he does not scam any more people on this forum or anywhere else.

    1Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    9y

    Hi @Ndy Onyido,

    It's above my paygrade, but I think it would be unrealistic for BP to have some ultimate database on who is and isn't legit. The NMLS lookup website is a great resource for lenders, however, and your state also has a place where you can lookup real estate agents. 

    0Reply
  • Ndy Onyido
    OP
    Toronto, Ontario · Member since 2014 · 615 posts · 172 votes
    9y

    @David Dachtera

    Thanks, David. 

    0Reply
  • Ndy Onyido
    OP
    Toronto, Ontario · Member since 2014 · 615 posts · 172 votes
    9y

    @Chris Mason

    You are correct about the challenges of tracking and vetting here on BP. 

    But to appear legit, he also has his NMLS number on site. Even if you go to the local NMLS site to look them up, there's no way you would know they are fraudulent if he is up to date with his membership dues etc.

    Its sad how intricate these folks with dubious intents are in plotting their game..

    Thanks for the counsel.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    peak is a real

    Company I know them personally. Other guy is a crappy broker. You should contact peak and let them k ow they have a bad broker rep.  

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    nmls is only required In 11 states. By the way.  

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    You can report them to what ever state they are licensed in.  They have to do a mortgage call report every quarter.  On this report they need to identify how many apps they took. How many turn downs and how much in fees they collected. If they make false call report that is no bueno and they will be shut down

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  • Ndy Onyido
    OP
    Toronto, Ontario · Member since 2014 · 615 posts · 172 votes
    9y

    @Jay Hinrichs

    Thanks. I was initially introduced to Peak by Mark Edmonston through Mike D'Arigo and these are respectable folks with good names. However, this Tony O'Brien fellow may be using them as a front.

    How do I know the state in which he is licensed because I intend taking this to the highest level available. People must work to earn thier living.

    I put a fomal call/complaint through to Peak by tomorrow that one of their brokers is a fraud.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    nmls registry will have the state. Go to the site like. Chris described pop in the nmls number and it will give the state

    Call peak. Talk to jp sauer one of the owners

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    also peak has there own algorithm that is a common complaint I here from other vendors regarding valuations and it could be saving you from paying to much.  Or it could be off base

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  • Tony O'Brien
    Mooresville, NC · Member since 2015 · 8 posts · 7 votes
    9y

    This is a very disappointing posting from a very unqualified borrower. The real story here is a borrower, this Client comes to us with a property he wishes to purchase through a wholesaler. 

    This Client brings us an address he wants to purchase from a wholesaler, 9007 E. 85th Terrace, Raytown Mo. 64138, the client wants a term loan on this property, we see no problem.

    At this point we begin the underwriting process, and the client is going to pay the fees associated with this effort. Our effort includes, background, credit, legal, and finally appraisal. This client is a foreign national, not an issue for us but it does require an added effort because there is no social security number or credit score. Keep in mind we are now doing a non-recourse loan vs. the standard recourse loan. This is also added effort because there is more due dilligence with the Clients native country. 

    Now the good news, we approve the client, no problem we can make the loan, the last step is the appraisal and this is where the client runs into trouble. Let's do some background on the property. If you google this address you will see it is in a difficult area, Raytown MO., but we are able to lend in this market. Keep in mind, conventional lending can't "redline" private money can, this means we can decline a property because of the neighborhood it is located, the price being paid to purchase or any other factor. So the Client who is complaining here is trying to pay $76,000 for a property that was bought by the wholesaler for $39,000 shortly before, great deal for the wholesaler, bad deal for the buyer who is trying to borrow money from us to purchase this asset. Furthermore, the comps in the area used by the appraiser are coming in at $58,000. 

    As investors we are looking to buy a property that meets or exceeds the appraised value, right?  No one in their right mind would push to buy an asset that is worth $20,000 less then the appraised value.  On the lending side we are not going to lend based on the purchase price but the appraised value, we all know this, correct?  So this is the buyers delemma, he has to now bring the balance needed to pay $76,000 to the wholesaler vs. what I said I would led him. This entire process took two months. Why, because the wholeseller kept telling us the lender and the Client they would produce new comps to prove the appraiser is wrong, of course after two months they never do come forward. 

    Now let me ask you, savvy investors, did we do what we promised? Of course we did, we honored our loan committment, at the appraised value, everyone knows the loan is based on appraised value not contract price. 

    As a wholesale lender we sell every loan, most lenders today sell every term loan, even major banks. There is no money in servicing unless you operate that type of organization. The loan on my home has been sold 4 times since inception. Our fees are spelled out in the term sheet, the Client is paying for the hard work we must do in order to arrange our line of credit and the back end to accept the loan once it has been written. 

    This Client want to be provided all the services, the loan and the closing and not pay any money and to be lent on a badly purchased property. The lesson here, services are not free, we work hard to insure our clients are provided the money they need for their project. We don't work for free, imagine if we had done all this work for free and had the same outcome, no fault of our effort but the failure is with the novice buyer who didn't do his homework. 

    In closing, all the documents I discussed here are available for review. The Client needs to understand the investment business and why the onus of success is in the quality of his purchase, not on our ability to turn a poor investment into a funded project. The one comment I stress to our clients, "we are in the business of lending money." Should I complain we never made our two points on the transaction because of his poor choices?  

    The final postscript, this client came to me with another poor choice, high cirme area which I shared with him. We don't close our effort once a client fails, we honor our committment to lend funds any time this Client can bring an asset we can lend again.

    Every story has two sides, this Client firmly believes he has no responsibility in this effort. To accuse us of the actions he does is a poor decision on his part. When we fail its not due to our inability to perform, it is alway the client who fails to provide what is needed to succeed.

    3Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Chris Mason Peak is a for real company I know the owners personally.. I have spoken on panels at REIA groups with them a few times.

    they have a non recourse product for foreigners they sell the paper to insurance companies and they take on other brokers.. @Tony O'Brien  Tony I assume you were brokering this paper for JP and his crew ???? 

    I liked Peaks model and program so well I became their competition I have done over 750 of these non recourse foreigner loans... but they are not priced like US citizen loans.. they are quasi hard money and for sure we red line and for sure we take a hard look at value...

    As I stated Peak has their own algorithm for valuations.. and I have heard this from many in the industry were they don't agree with their values but hey who has the gold rules.. 

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