Engagement Fee for a loan: LENDBASE

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Engagement Fee for a loan: LENDBASE

Geoffrey Serdar
Real Estate Agent · Minneapolis, MN · Member since 2016 · 29 posts · 10 votes

Have any of you ever heard of an Engagement Fee for refinancing?

LENDBASE has the following fees

Conventional:

1% origination fee

$500 doc fee (est)

Title Work TBD

Appraisal $2000-$3000

Environmental $0-$2000 (depending on search)

Which all seem pretty normal, but FIRST they require you pay them up front $4,000.00 to start brokering loans, it’s their "non-refundable engagement fee.”

Has anyone ever heard of this ever? What has been your experience with LENDBASE? Their fees portion are so strange - your thoughts?

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Nicholas Covington
Mortgage Broker · Dallas, TX · Member since 2017 · 657 posts · 275 votes
6y

Lol, that's a bit of a stretch. I wish I could pull something off like that... basically, its a fee to make sure you don't waste the lenders/broker's time. No I would not go with a company charging that. I get paid when the deal closes and so should any other lender.

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  • Adrienne Donner
    Real Estate Agent · Salt Lake City, UT · Member since 2019 · 29 posts · 13 votes
    6y

    I have never heard of that and it seems suspicious to me. What research have you done on this company?

    1Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    6y

    Don't need to read the contract, find a new HML.

    3Reply
  • Nicholas Covington
    Mortgage Broker · Dallas, TX · Member since 2017 · 657 posts · 275 votes
    6y

    Lol, that's a bit of a stretch. I wish I could pull something off like that... basically, its a fee to make sure you don't waste the lenders/broker's time. No I would not go with a company charging that. I get paid when the deal closes and so should any other lender.

    3Reply
  • Antonio III Rodriguez
    Member since 2020 · 1 post · 0 votes
    6y

    I worked with a broker before who delivered and has referred me to Lendbase. I spoke with them over the phone a few times and they seem super pro about everything. I am leery about the 4K engagement fee they’re asking upfront. I asked my broker if he’s ever worked with them before and he said he has not. I am having second thoughts and I don’t want to go through with this. @Geoffrey, I Am curious If you went through with them. 

    0Reply
  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    There's zero reason to do this when there are plenty of options to avoid it. 

    [email protected]818-606-8823
    Investor Property Loan5306 Reviews
    WebsiteView Page
    1Reply
  • Layne Anderson
    Member since 2021 · 1 post · 1 vote
    5y

    I was unfortunately caught up in this scam and I hope that I can help others avoid the loss of money and the unfortunately situation that I was in.

    I lost $5,000.  

    Lendbase has a referral fee that they pay any residential brokers that want to bring customers.  The typical fee they charge up-front is $4,000, but they were able to get $5,000 out of me because I was new and nieve to the commercial lending agency.  It turns out my residential broker was just telling me anything to get me signed up.  He gets his referral fee up-front, regardless of whether they bring any options to the table.   

    I warned of my credit score, and my situation, but was just advised that it will not be a problem.  Go ahead and proceed. 

    I transferred the money via EFT (the transfer instructions had no reference to Lendbase - red flag), and asked for a receipt, but was told that their customers rarely ask for a receipt.  Seems odd as this would be a business expense for my business.  I still don't have a receipt or record for the transfer outside of my bank record.  Even my title company will send me a receipt. Another red flag. 

    I signed the contract mentioned above, that initially said no closing points to lendbase when we find a loan.  However, after their "exhaustive" search of thousands of lenders they partner with, they were only able to offer me one loan.  But, alas, the loan isn't with one of their wholesale partners, so they will have to charge me a 2% origination fee: 1% to lendbase and 1% to the lender.  They will quickly send you an amended version of the contract with this 2% added on, and ask you to sign it and send it back. 

    Don't do this - this is their scam!

    You don't know who their "wholesale" partners are.  You don't know if they actually deal with thousands of lenders, or if they deal with a couple and this is their scheme to get your money and then get another 2% origination fee. 

    Don't do business with them.  There's currently a website set up to get information from customers that have had this contract "sleight of hand" done to them.  If you've been a victim, go over to lendbasetookmymoney.com and submit the form so that the attorney can determine if this is considered a class action lawsuit. 

    And remember, the Federal Trade Commission warns against pay up front loans:  https://www.consumer.ftc.gov/a...

    Lendbase is able to skirt around this by claiming that they are just a "broker" and not the actual lender.  So the lender is in the clear and Lendbase isn't actually the lender.  

    Very nice scam.  I got caught and lost my money and more and more people are also reporting similar circumstances. 

    Don't get into the same mess I did! 

    Layne

    1Reply
  • Jesse Rivera
    Lender · Long Beach, CA · Member since 2013 · 496 posts · 296 votes
    5y

    I don't believe in marriage so I ain't paying no engagement fee.

    1Reply
  • Jonathan CarpenterPro Member
    Rental Property Investor · Whitefish, MT · Member since 2022 · 37 posts · 8 votes
    4y

    Hey there, this is my first Bigger Pockets post so yay!?

    We're working with a mortgage broker local to us and he has put us in contact with Lendbase as well. We are not currently under any sort of contract and we just found this thread through a google search on Lendbase.

    We are currently working on a construction loan to develop some residential lots, assumed the Mortgage Broker would be on the up and up... had some sales-ey call with a guy out of Utah. 

    I suppose the main question is, does this company actually come through. We're looking at a rather large loan and I feel like we could go down a different road if this place is not legit.

    Thanks.

    0Reply
  • Anand Rangaswamy
    Member since 2021 · 5 posts · 1 vote
    4y
    Quote from @Jonathan Carpenter:

    Hey there, this is my first Bigger Pockets post so yay!?

    We're working with a mortgage broker local to us and he has put us in contact with Lendbase as well. We are not currently under any sort of contract and we just found this thread through a google search on Lendbase.

    We are currently working on a construction loan to develop some residential lots, assumed the Mortgage Broker would be on the up and up... had some sales-ey call with a guy out of Utah. 

    I suppose the main question is, does this company actually come through. We're looking at a rather large loan and I feel like we could go down a different road if this place is not legit.

    Thanks.


     Jonathan,

    Did you go through with Lendbase? Would love to hear your experience.

    0Reply
  • Jonathan CarpenterPro Member
    Rental Property Investor · Whitefish, MT · Member since 2022 · 37 posts · 8 votes
    4y
    Quote from @Anand Rangaswamy:
    Quote from @Jonathan Carpenter:

    Hey there, this is my first Bigger Pockets post so yay!?

    We're working with a mortgage broker local to us and he has put us in contact with Lendbase as well. We are not currently under any sort of contract and we just found this thread through a google search on Lendbase.

    We are currently working on a construction loan to develop some residential lots, assumed the Mortgage Broker would be on the up and up... had some sales-ey call with a guy out of Utah. 

    I suppose the main question is, does this company actually come through. We're looking at a rather large loan and I feel like we could go down a different road if this place is not legit.

    Thanks.


     Jonathan,

    Did you go through with Lendbase? Would love to hear your experience.

    We did not end up finalizing the deal. Listing agent dropped the ball. Sounds weird, but true. Lol
    0Reply
  • Nick BelskyBusiness Member
    Residential and Commercial Broker · Member since 2021 · 1k+ posts · 704 votes
    4y

    @Geoffrey Serdar

    That's the #1 sign of a scam.  Wanting money for doing nothing or asking for a commitment fee.

    Not to say that all lender who do this are a scam, but why would you entertain it.  There are 100 other lenders out there who will do the same loan without this fee for every 1 that asks for it.

    Find a different lender.

    Cheers!

    [email protected]
    Belsky Mortgage, LLC527 Reviews
    WebsiteView Page
    0Reply
  • Daniel Blackford
    Specialist · New Smyrna Beach, FL · Member since 2016 · 20 posts · 14 votes
    3y

    I was curious about Lendbase already prior to reading this post. I called them and we spoke about being a borrower and about being loan broker. Lendbase, as a "correspondent lender" basically shops for and lends other Lender monies. I was quoted a "retainer"  (?engagement?) fee of $5,000 to which I responded, "with all the money out there seeking a place to be, why would I need Lendbase to shop for a loan for me?". Without getting into the weeds of our conversation, their response was as expected highlighting their service and ability to facilitate a loan. My investors expect me to source financing for a deal and not retain a service to do what I am expect to do as part of my fees.

    0Reply
  • Bill Petersen
    Member since 2023 · 2 posts · 0 votes
    3y

    Lendbase helps clients that other lenders won't touch. This is usually due to a credit score below the industry desirable score of 680 for a Commercial Loan. They have a group of funding sources that will compete against each other, this helps keep the final interest rate within reason, and offer a partial refund if they are unable to secure financing.  They are great to work with and get things done!  

    0Reply
  • Bill Petersen
    Member since 2023 · 2 posts · 0 votes
    3y
    Quote from @Nick Belsky:

    @Geoffrey Serdar

    That's the #1 sign of a scam.  Wanting money for doing nothing or asking for a commitment fee.

    Not to say that all lender who do this are a scam, but why would you entertain it.  There are 100 other lenders out there who will do the same loan without this fee for every 1 that asks for it.

    Find a different lender.

    Cheers!

    Most commercial lenders want a 680 credit score,  or they won't talk to a borrower. 
    0Reply
  • Kristin Fleming
    Lender · 42 states · Member since 2022 · 27 posts · 5 votes
    3y

    What is the collateral for this loan? I noticed that the appraisal fee is higher than a typical 1 to 4 unit residential property, and they quoted and Environmental Study fee, which I have never heard of on a 1 to 4 unit residential property. That leads me to believe that this is a commercial property or larger (more than 10 to 12 units) multifamily. If this contract is for a 1 to 4 unit property, then the engagement fee is super strange. If it is something other than that, then yes, the engagement fee is absolutely standard. It is used towards the appraisal, the environmental study, document review and preparation. Any unused funds from the engagement fee are typically credited to the borrower at loan closing, reducing your total cash to close. Please feel free to contact me if I may be helpful to you.

    0Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    3y

    @Geoffrey Serdar- thats a 4K red flag

    0Reply
  • Nick BelskyBusiness Member
    Residential and Commercial Broker · Member since 2021 · 1k+ posts · 704 votes
    3y
    Quote from @Bill Petersen:
    Quote from @Nick Belsky:

    @Geoffrey Serdar

    That's the #1 sign of a scam.  Wanting money for doing nothing or asking for a commitment fee.

    Not to say that all lender who do this are a scam, but why would you entertain it.  There are 100 other lenders out there who will do the same loan without this fee for every 1 that asks for it.

    Find a different lender.

    Cheers!

    Most commercial lenders want a 680 credit score,  or they won't talk to a borrower. 

     I work with several who go to 600 or don't require a FICO for commercial at all.  

    Cheers!

    [email protected]
    Belsky Mortgage, LLC527 Reviews
    WebsiteView Page
    0Reply
  • Hugh Thompson
    Investor · Palm Beach County, FL · Member since 2015 · 27 posts · 28 votes
    3y

    Appraisal fee seems very excessive if this is not more than 4 doors.  I think they are way too many lenders out there to deal with that won't have an engagement fee much less of $4000.  Then can decide for whatever reason not to fund the loan and keep that engagement fee.

    0Reply
  • Sarah Renken
    Member since 2022 · 3 posts · 2 votes
    3y

    I just tried to work with Lendbase and they are a complete scam. They were recommended to me by a local lender that I work with regularly. I just hired a lawyer to sue them. If anyone else has been taken advantage of by them please reach out to me

    1Reply
  • Sang Kim
    Member since 2024 · 2 posts · 0 votes
    2y

    I wish I found this website before. Sorry, English isn't my original language.

    On 11/6/23, I applied to Lendbase for a commercial loan for my business. I paid $6,000 fee. I wish I didn’t.

    The only reason I worked with them is because the rep said 6.25% on the phone. Everyone on the call heard that. I wrote 6.25% in the agreement docusign.

    On 12/8/23, the loan offers were for 8.5%-9.5%, 10.63%, 10.88%. The fourth loan offer ask to deposit the whole loan amount into a CD. If my business had that money laying around, I wouldn’t need a loan? All offers included more $5,130 fees to Lendbase, over the $6,000 already paid!

    They even ask me to look up my own credit score ("exceptional" FICO 8).

    0 stars. I feel like they took my money and didn’t give the excellent service advertised on their website. I want my money back.

    0Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    2y

    @Sang Kim- I am sorry to hear this....DId  any of the  paperwork provided  outline if the  6K fee  was rendable  ?   Reqauest a refund from them verbally and in writing and  continue to follow up and  go up the  management  chain if needed .  In the  future - never  pay an application or engagement fee   when trying to  get a home loan or a  reseideential loan  

    0Reply
  • Sang Kim
    Member since 2024 · 2 posts · 0 votes
    2y

    hi @Dave Skow, like everyone says above the up front "platform fee" is non-refundable. Today my broker said he was emailing and calling them for 2 weeks already but they will not budge! Not even a part refund. We can't find anyone higher in the Lendbase company.

    I just hope people can find our messages and not pay up front so much for any loan "service" that is bad. :(

    0Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    2y

    @Sang Kim- thanks for clarifying you are trying to get a commercial loan ...this is a  completely different product than a home loan ...You still should be able to  locate and obtain a good commercial loan  without  having to pay any fees upfront  ( other than possibly paying for the appraisal after the  loan has been  approved )

    0Reply
  • Kevin Romines
    Lender · Winlock, WA · Member since 2013 · 1k+ posts · 1k+ votes
    2y

    They are a lender that we broker to. Personally I will not work with them specifically due to this fee. I believe they are recouping costs associated with loans they don't close. Most lenders (they are not a lender, rather a broker) doesn't have fees of this kind. I don't know what advantage you would get from working with them? If there are, fill me in, I'd like to know?

    1Reply
  • Charlie Moore
    Member since 2022 · 7 posts · 1 vote
    2y
    Quote from @Jonathan Carpenter:

    Hey there, this is my first Bigger Pockets post so yay!?

    We're working with a mortgage broker local to us and he has put us in contact with Lendbase as well. We are not currently under any sort of contract and we just found this thread through a google search on Lendbase.

    We are currently working on a construction loan to develop some residential lots, assumed the Mortgage Broker would be on the up and up... had some sales-ey call with a guy out of Utah. 

    I suppose the main question is, does this company actually come through. We're looking at a rather large loan and I feel like we could go down a different road if this place is not legit.

    Thanks.


     Did you end up using them - talking to them right now - and a little nervous to pay the engagement fee. Thanks

    0Reply
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