Hard Money Lender picks the Attorney?

Question

I am working through my first hard money deal. So while I fully understand the financial aspects of the deal, I am unsure about a lot of the typical paperwork/who does what parts. The picked the appraiser, who I paid, still yet to hear back from the appraiser - will I get a report?? Also, they just sent me "the closing attorney is: This person" - I have an attorney that I work with, and already had done work on the title. Is it normal for the lender to do this? Should I still have my attorney do the work? Also now I am thinking about the title and insurance and all of that, do they pick those as well? I assume I need to name them, right?

Travis Phillips · Answer

Benjamin -

The general response is that it’s too difficult. That their attorney draws up the mortgage docs and accesses the funds. I’m not fully opposed to using their attorney, but it was a curveball.

My understanding with fees is that there are no other fees. It’s 10.5% and 2 pts, they also offer 90% loan to value and up to 75% ARV. There website suggest a down payment but that hasn’t been discussed. So I’m not really sure, hard numbers actually haven’t been discussed yet either. I’m under the impression that will happen after results from the appraisal.

The appraisal happened end of last week, I do think they would let me know if they had a report. They have been relatively responsive, I just feel like I am lacking detail. That may be my own inexperience somewhat looking for more point a to point b guidance.

Mark Safrin · Answer

- You should definitely get an appraisal report. If the HML ordered it then they will get it first but should definitely forward it to you. Has the appraiser organised a site inspection with you? If not and t has been a couple of days, follow up. If the inspection has happened, what is the due date for the report? This should have been given to you.

- As for Title companies, if this is a purchase then, at least in my experience, most often the seller will pick the Title company. If the The HML insists on using their Title company as a condition of the loan, I would want to know why.

I dunno... from the very little you have mentioned, I'm not getting good vibes about this HML. Starting with their keeping you informed and updated. Have you asked them for a full list of all the fees you should expect?