As a long established (25+ years) private/hard money lender, I wish all mortgage brokers, note brokers, and financial intermediaries were professional, well trained, had extensive knowledge of real estate finance, and were diligent. However, the majority are nowhere like this “ideal”.

The brokers lacking these traits and abilities now try to disguise it by using AI to create their “presentation”. However, AI actually makes their deficiencies more evident, not less. The result is some beautifully written presentations that make no sense; contain glaring errors in definitions, and try to make mundane, irrelevant and questionable “facts” sound monumental.

Here are the most common problems with loan proposals presented to us by “amateur” brokers

1. They contain little of any relevant information about the property, borrower, or loan request

2. They have little if any supporting documentation because the broker has not obtained such from the borrower

3. The request is for a totally unrealistic loan amount or interest rate or terms because instead of educating the borrower as to market realities the broker merely accepts the borrower’s request unchallenged

4. When documents are sent to us the broker has not reviewed them. Hence, they are always surprised when we revert back with appraisals far below borrower stated value, financial statements/ tax returns showing large losses, title reports showing liens that have not been disclosed, and and leases that have already expired.

5. The property type, loan amount, or LTV is well outside of our well advertised parameters, which the broker either chose to ignore or neglected to read.

6. The broker is unable or unwilling to fill out our simple, short loan information form or fills in a small part leaving the majority blank.

That being said, the vast majority of the financings we complete are brought to us by a “core” of 15 or so brokers many of whom have been successfully closing deals with us for 20 + years. These brokers typically provide full packages; have counseled borrowers as to what is realistic in the market, send us only those loan requests where lower cost institutional financing isn’t appropriate or available, and are quick to provide accurate answers to any questions or concerns.