Lender Scams and Warning Signs: Beware & Protect Yourself!

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Thank you for all posting. This is a great topic for newbies like myself. It gives me hope that there are some decent people who want to see others succeed.

"The broker had fled to Argentina, the borrower asked the district attorney to file criminal charges and extradite the broker."

The DA usually won't get involved unless there's political pressure...or if they're an in-law or something.

"But the biggest reason people get ripped off is because they don't know any better!"

Scammers are equal opportunity shiesters...rich & poor get scammed alike.  Just make sure you apply $0 down to your lender as well.

Very old forum, but I wanted to report that someone is using my company name as well as my personal name and information to offer private financing with large fees due once a commitment letter is produced.  I know of three cases where individuals sent between $1750 and $20,000.  Research produced by the attorney for one of the victims found that the website originated in Southeast Asia.  The FBI has been informed and is investigating.  A warning about such appears on our website.

I have been hit up by a group called filga finciaial company.

Tom Vichi emailed a bogus word document and was calling it a loan application.  Looks more like a generic rental application than official application.  Also puts in there that they demand prompt response and will provide proof of funds to so loan capacity.

Look out for anyone refering you to this person.  There are some hits about this on BP.

Hope this helps out

As a newbie, I have not gone down that path of seeking any loans yet, however, thanks to all the insight being shared here,  I, now, know some of the things I need to be weary of.  I knew there were plenty of scams to be aware of, I just didn't know to what degree. 

To all of you, thanks so much for sharing your knowledge and wisdom.

"Where there is smoke, fire is not too far behind". There are numerous statements regarding in this industry. We have to simply do our due diligence to inspect a company before proceeding with any funding opportunities.

I totally agree with the previous posts about being wary of upfront fees. We've been lending since 2002 and have managed to set up a process where we don't charge any upfront fees (not even an appraisal fee - I go out of pocket to do my own valuations) so that we aren't making any money at all until a loan is funded. It keeps the conversation honest, cuts out the frustration of an appraiser's (sometimes incorrect) opinion of value, and aligns incentives so that everyone wants to get to the table quickly. My fall through rate with borrowers is incredibly low, so what do I need to charge upfront fees for? 

This post is still so relevant and important for us newbies. It is a good reminder to always check the sources, keep your BS radar on and if your gut is saying something is not right put on the brakes!

Thanks everyone for sharing!

I posted a request for funding in BP market place the next day I was contacted by 2 scammers. One lady not sure what her real name is but she is operating under the business name Axiom Capital Group and not the one in Boston. They wanted $350 up front. The email she sent me she used the signature for someone who actually work at Axiom her name was Marlene in the body of the email but her email signature was Laverne Hypolite. Their website was just built in 2015. The application she wanted me to fill out for funding was a FHA loan application. The other person was from "Big Smiles" company a Steven Sill he was doing the whole rehab at 2% interest a month. The loan application was a joke and he had some other name in his email signature as well. Sad that people do this crap

Watch out for a guy named Daniel Rogers claiming to be from Affiliated Mortgage lending.

I know the company is legit and does some real estate lending, but only in TX. This scammer is using their names, license numbers, all their business information and documentation, except for the phone number. I talked with a company rep and told them about this and he said they are getting calls from all over the US about these "loans".

Not sure if Daniel Rogers is the same guy I looked up on BP, since that's where he said he found my profile. The Daniel on BP has NO information in his profile except for some website.

BEWARE!!!

Hello everyone and I hope this posts helps.  I have been a real estate investor and lender for 24 years now. I think I have seen and heard it all.

1. If a lender ever asks you for a "Good Faith" Deposit - Run Its a Scam

2. Lets do the transaction out of escrow

3. Appraisals/Inspections upfront are fairly customary and standard to pay up front by borrower.

4. Complicated Loan Terms is a Red Flag something isn't right.

5. Trust your gut instinct. It is sounds too good to be true, it usually is or everyone would be doing it.

6. Hard / Private Money lenders usually do their own CMAs and Inspections before they even get to an appraisers. Plus many use their own Inspectors and Appraisers. Especially after the 2001-2008 scams where appraisers, inspections, real estate agents/brokers were all in bed with borrowers scamming lenders.

I have been chatting with a fellow investor about the possibilities of doing joint venture buy and holds. He proposed the idea of using LOCs to fund buy and hold deals and rehabs. 

I think that it is great idea. You have the power of a cash buyer as a new investor. So I met with a company he recommended to help me obtain lines of credit.

They said they they could use their strong relationships with the banks to get me the funds I need through a variety of LOCs and credit cards. (When I first went in, I was under the impression that it was one LOC. )

Not a bad gig for someone who doesn't have good credit, they also offer credit repair. However, I am 22 years old and have worked very hard to establish great credit. 

Here is my dilemma: simultaneous to me trying to jumpstart my real estate investing career, I have also been trying to purchase a single-family home as a primary residence for my family. If I were to move forward with this company, it would create several inquiries on my credit that could damage my score and effect the possibilities of me closing on my primary residence. Not only that, but since I'm using traditional financing through my VA loan for my primary residence, the lines of credit would ruin my DTI ratio and disqualify me on my pre approved amount .

The investor I'm looking to do business with recommended I wait on purchasing my primary residence, and go for the lines of credit first so I can start a few deals.

I'm looking to do whatever I can to start doing deals as soon as possible, but I can't afford to jeopardize my family's primary residence. Our current living situation isn't working very well for us, so I'm trying to purchase our primary residence as soon as possible. On the other hand if I were to wait , I'm not exactly interested in paying other peoples mortgages in the meantime.

I'm definitely open to new ideas and creative financing, but I do not want to screw things up for my family's living situation.

Back to the company, for their services of obtaining multiple lines of credit they charge a 10% success fee. Meanings they apply for the lines of credit and credit cards for me, and I pay 10% of whatever amount they can get for me. For example, if they were able to obtain $100,000 worth of credit lines, I would have to pay them $10,000 on the back end, whether I used the credit or not.

I'm curious to know if there are any other investors out there who have went through a similar process to get started?

At this point, after hearing what the company had to say, I began thinking to myself why can't I just go out and do it myself? I know it's all about relationships and knowledge of the bank, but how important is the relationship?

Is there any reason I can't just do my homework to figure out what banks are looking for when applying for a line of credit and do it myself? I'd like to think I'm a pretty diligent guy .

When I asked the investor I am looking to do joint ventures with, he said I wouldn't be able to obtain that level of credit from banks on my own.

On the other hand, in BiggerPockets podcast 137 Sam Craven was mentioning it's all about how you present yourself to the bank. If your professional, have a project plan, a business plan and make the banks feel comfortable with what you are doing  then you shouldn't have a problem.

I hope somebody here can give me insight on my situation. I want to make informed, well analyzed decision.

Like I mentioned before, I am open to trying new things and not opposed to creative financing ideas, I just want third party input as a sanity check. Both the investor and the company seems very transparent about their intentions and seem like good people. But I will feel more comfortable with a 3rd party input.

I'm trying to figure out if this the risk is worth the return. My biggest interest in real estate investing is wholesaling, & I feel like putting my money and efforts into wholesaling could set me up better for buying hold deals down the line.

Keywords: financing, loc, banks, buy and hold, Chicago, Lombard, Illinois, Credit.

Ha! Just last week I had a guy from BP here named Eric Davies (assume not his real name) claiming to be a private investor, offered to fund me. I wont go into all the details, but suffice it to say, if it sounds to good to be true, it usually is. He has been banned from BP. Just be careful out there and listen to your gut.

Ok, So then, how does someone like me that is helping a lender pool of private investors, from our real estate investor association, that has been newly formed get leads.  We don't have a website or a common phone number, fax, email... there are 4 of us, using our own phones, emails, equipment, to help get the word out?

Here is a very simple answer to the question, and its worked 10/10 times for me.

Ask for a Statement of Financial Position and/or a Proof of Funds.

If it takes them longer than 12 hours to get you that, they're fake. 


A proof of funds should be immediately available to every major institution, as well as most real brokers. 

A statement of financial position is a required document for most banking institutions.

Originally posted by @Jannelle Marshall:

I posted a request for funding in BP market place the next day I was contacted by 2 scammers. One lady not sure what her real name is but she is operating under the business name Axiom Capital Group and not the one in Boston. They wanted $350 up front. The email she sent me she used the signature for someone who actually work at Axiom her name was Marlene in the body of the email but her email signature was Laverne Hypolite. Their website was just built in 2015. The application she wanted me to fill out for funding was a FHA loan application. The other person was from "Big Smiles" company a Steven Sill he was doing the whole rehab at 2% interest a month. The loan application was a joke and he had some other name in his email signature as well. Sad that people do this crap

Big scammers received e mails, checked out company, which does not exist. Axiom legiti in CA and only makes loans in CA and the one located in MA is legit

Already been scammed by another " private lender, don't want to have that happen again

My two cents.  I have learned If they push you or make you feel urgent in any way = scam

2)  there are good lending companies with long names. I have been contacted by a guy, who pretended to work for one of these "long name website" companies. He created email with the name of that company.  I caught a strange misspell in the email. That was clear that he used similar name to look like he works for them.

Watch out.

I have had several "lenders contacting me on FB too.

I try to keep it low, meanwhile I report them. :)

Good thread!

Originally posted by @Liam Weldon :

Additionally, in addition to references albeit simple and basic, I recommend to ALWAYS check the company you are looking to do business with out on www.bbb.org. I personally feel that any legitimate business should be an Accredited Business with the BBB.

Lastly, although simple, do a simple Google Search on the company name, company phone number, and company e-mail address of the company and individual you are considering doing business with. This will provide you a substantial amount of information about the company your considering working with (good, bad and indifferent).

Although this is an older post, there was an investigation by 20/20 in November 2010, on BBB that companies have to pay an annual fee of $425 to be accredited to get an A+, A, or A- ratings. Watch this video> BBB 20/20 Investigation

Wolfgang Puck, a renowned celebrity chef got an "F" because he chose not to pay and be accredited. May be he should consider changing his last name (JK). 

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