By Broker, Forest Tardibuono
New and Improved Hard Money
Realtors take note...
I recently saw a Wall Street Journal article Explaining the Methods of Hard-Money Lenders (written July 21, 2011). It begins with "As banks continue tightening their purse strings..." which is the theme of the article. The article mentioned the increased use of Hard Money due to the "...tight lending these days..." of institutional lenders.
It then goes on to explain the fact that the loans are concerned with "asset valuations and loan to value-ratios."…."There's no red tape."…. "Because there is little bureaucracy when compared with big banks, deals can be approved and closed in just a few days."
This article points out the reality that Hard Money is a very real option for borrowers / buyers who cannot get bank financing because of "spotty credit". By the way, "spotty credit" in my office can be someone with a recent bankruptcy, a recent foreclosure or a recent short-sale. A short time ago I successfully did a loan for a buyer who was in a reorganizational bankruptcy (he dismissed it), had 2 foreclosures the year before and was short-selling his current home.
For many buyers Hard Money is the only option.
The busy Realtor in today's market (and well into the future) has to know about Hard Money. The fact is there are the 30 year fixed rate type lenders out there, call them "A" paper lenders, and then there is Hard Money which is now the catch-all for everything else as there are no "B", "C", "D" or "sub-prime" lenders in today's market. So you have to be well versed in Hard Money.
Finally, I do want to mention the "improved" side of Hard Money: To be able to do Hard Money in the State of California, you need a state license through the Department of Real Estate or the Department of Corporations and a federal license from the Nationwide Mortgage Licensing Registry (NMLS). I believe the requirements for the federal license chased off a lot of Brokers including "A" paper lenders as well a Hard Money Brokers. It called for a lot of continuing education as well as credit checks, criminal background checks and financial checks. Their quarterly reporting requirement is designed to look for lending that does not comply with current federal dictates - and there are a lot of recent dictates. Then there is annual continuing education and an annual Financial Condition report.
So I think the Brokers who might have given Hard Money a bad name, have fallen by the wayside or cleaned up their acts.
Hard Money is here to stay and is a vital tool for the busy realtor. 2/3 of the loans I do are for purchases. The Buyers are so grateful too, as they thought they had no chance for home ownership. I invite you to call your local Hard Money Broker and really get the scoop on what Hard Money is all about! It is the only loan program I now offer. After 24 years of doing this, I know of which I speak.
Here’s to many more individuals becoming new homeowners!
The above article was written by Forest Tardibuono, the Loan Officer and Co-Owner of Sun Pacific Mortgage and Real Estate. While I certify move-in ready flips he grants hard money and private money loans to those buying in Northern California. Our website and facebook page are listed below.
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Lynn Tardibuono – Flipper Chick- Real Estate Agent and Co-Owner of Sun Pacific Mortgage and Real Estate. Serving Sonoma County since 1988. Her number is (707)523-2099 and you can also visit the website at http://www.sunpacmortgage.com