The commercial lending industry operates with particular speed and responsiveness thanks to freedom from regulation, making it an attractive option for those seeking quick funding. However, this has also created a highly predatory lending environment where many companies refer loans to one another, also known as brokering, while increasing the price and loan points with each referral.
There is also great concern about the practices of some lending companies in the industry who require upfront payments to investigate loans and then refusing to lend on said properties while keeping this fee. Borrowers are advised not to work with hard money lenders who require exorbitant amounts of upfront fees prior to funding in order to reduce this risk. If you feel you have been the victim of unfair practices, contact your state’s attorney general office or the office of the state in which the lender operates.