AM I BEING SCAMMED BY HML?

15 Replies

Hey guys, we started the process of getting a HML back on Oct 29th. They said our property was good and they accepted it.

We moved forward with all the docs needed.

To even do the app there was a $200 fee (that I'd get back on the HUD)

Is this even normal?

Anyways, I couldn't choose my own appraiser, I had to use theirs ($900)

I was gonna meet the appraiser at the house the day of but his car broke down so I wasn’t able to meet him and he went by the day after while I was tied up.

Closing was Dec 5th and they said we'd be done by then, but it wasn't. I had to borrow family members money to close because we couldn't push back closing with title.

($65k)

Needless to say, they still aren’t done and on Dec 10th - their “underwriters” demanded $95 to “continue the process since it’s taken so long”. I paid it.

Is this right?

And then they told me “no doubt it’ll get done before the new year”

Well, here we are on Jan 2nd and I get a call today that I need to send $300 more and it'll get put back on the HUD or they are gonna close the file immediately.

I’m starting to feel real sketched out by all of this now.

All the while, they've been delaying because "contractors plans aren't clear for ARV" ... even though I've sent layout, and drawings and contract with the contractor.

Any advice would be great.

$65,000 buy

$70,000 rehab

Too many red flags here.   I'd cut bait.

A good HML is used to quick closings. Their entire operation should be set up to get things done fast. It doesn't make sense to me that they are charging you to extend the process when they are causing the delays.

Originally posted by @Alec Hilliard :

@Greg Scott I agree man.

Do you have any recommendations?

Get a local referral from someone who has actually used and closed with a specific HML. Start the process with them.

Time is money, money is time. If you're already willing to pay the HML rate and points, it should go fast. Otherwise, what are you paying for?

@Alec Hilliard

Looks as if they're nickel and dining you, all the while failing to perform. I'd send them a legal letter letting them know they're being looked into. I'd also demand they make things right by refunding you some of that fluff money they're charging!

And $900 for an appraisal? WTH. My bet is they are paying the pro $650 (which is super high already) and pocketing a "fee" for the difference.

This doesn't seem right to me. A good HM lender wants things approved and closed so you can start work. Then they get paid back. I have never heard of a HM taking this long to close.

@Alec Hilliard Doesn't sound good. Appraisal should be $300-$600. And the keep sending money and they still haven't closed? HML should be able to close in a few days. How did you find them or did they find you? See if you can get your money back and find someone else. Just my opinion.

App fees can be a red flag unless you have a good reason to trust the lender. I used a lender that didn't have one at the time, but apparently between the time I used them and the present they did end up having one, but it was waiveable so I would definitely ask about them. It sounds shaky to me that they would tell you you'll get it back at HUD. As strange as it may sound, I'd feel better about an HML that said they do have an app fee and it's non-refundable.

You won't typically get to choose your appraiser if you're getting a hard money loan so that's not unusual. The price does seem high though it could be an area where there aren't many appraisers. As someone said above, 300-600 sounds more reasonable. Once the hard money lender clears you to close I don't know why they could continue charging you. If the deal falls through for some reason outside of them then fine, but they've already done their work they shouldn't need any more money from you.

Bottom line you ran into a fake lender who is just stringing you along to see how much money he or she can get out of you and then go dark.. move on .. find a real lender.. and I will bet the terms were great too right?.

car broke down the last time I heard that one was in the Morris invest debacle @James Wise has chronicled.  One of the investors coming to look at his cash flow cow.. the PM says sorry we cant meet you our car broke down.. 

CARS do NOT break down.. unless your driving a SPAM can junker.. 

count your blessings and move on to a real lender if you actually need one at this point Pay nothing up front other than appraisal to a company whose cars work.