We recognize that each loan presents unique circumstances and therefore we place emphasis on innovation and efficiency, working closely with our clients to ensure project funding.
Hard Money Mobile is a leader in the realm of direct lending, with closing times typically within two weeks, and a funding commitment issued within 48 hours. We strive to benefit clients who want to take advantage of opportunities requiring immediate action as well as clients that are facing financial crisis, such as foreclosure bailout or bankruptcy filing. Since funding commitments can be issued within 48 hours, our borrowers can proceed with their transactions, assured that a banking partner is present. All origination fees, including the commitment fee, are paid at closing.
Hard Money Mobile is managed by seasoned real estate lenders who seek to help you succeed in your real estate investments. Our process is quick, no fuss, and customizable to fit your unique circumstances.
When a real estate investor contacts HMM for a possible loan, our first step is to assess whether the project meets our general loan criteria based on the information gathered from the loan application. If necessary, we will gather more data on the potential borrower, the project, as well as a summary of the proposed deal. After obtaining this information, we can usually already tell the potential borrower whether HMM can fund the loan. If we can, then the next stage is the underwriting process.
If the deal falls within our criteria, further documents will be required to proceed with the process, such as:
Our appraiser will then appraise and inspect the property and obtain any additional documentations that are pertinent to closing the deal. These might include documentations related to the project contractor, property title and insurance. Further process would include formation of borrowing entity since we don’t loan to individuals, which means the requirement of the formation documents and EIN.
Generally there will be two transactions during loan closing: the property purchase and loan settlement. Prior to closing, we will review all documents necessary to ensure a smooth process. There will be various documents relating to the loan which the borrower is required to sign, including mortgage note, investment affidavit, assignment of rents and leases, etc. After the documents are signed and reviewed by the parties, the loan proceeds will be disbursed either to an escrow agent for further disbursement, property seller, or directly to the borrower.
In case of a rehabilitation or a new construction loan, the funds will be released in stages, where each installment will be transferred to the borrower’s (entity) account upon the completion of a particular draw stage as verified by inspection of work.
Generally, the money will be wired within 7-10 days since the initial draw request. Other than providing draw management service, HMM provides support related to insurance and payment of interests.
When the loan is due, we work with the settlement agent to ensure that the process is as straightforward as possible. In addition, HMM does not charge a prepayment penalty, in case the borrower pays off the loan before it’s due.
A hard money loan is a loan given based on the asset given as collateral, usually a real estate property. They are also known by other names, such as private money loans, bridge loans, short-term loans, transitional loans, or asset-based loans.
Many private investors who seek a return on their capital would make hard money loans. They can either be one individual, a group of investors who each invest an amount to your loan, or a group of private investors with a ready-to-use pool of funds managed by an asset manager or loan broker.
Sometimes a borrower needs funds fast, such as when the borrower is competing with other parties in obtaining certain properties. Other times, they are unable to fulfill certain requirements to qualify for a traditional bank loan. Either way, a borrower needs to keep in mind that hard money loans come at a higher cost, namely a higher interest, and a shorter lending period. Therefore, many borrowers use hard money loans mainly as a bridge loan – or a temporary loan until such time when they are able to obtain loans from traditional banks, and with it pay off their hard money loans.
You can always try to get a traditional bank loan. However, in general, traditional bank loans require a strong collateral as well as excellent credit score and cash flow. Furthermore, in cases where you need funds fast, banks are generally unable to make loan decisions and provide funds in a speedy manner. Hard money lenders are the exact opposite. They are flexible in their requirements, focus on the collateral for the loan, and are able to provide a loan quickly.
Unfortunately this negative stigma linked to hard money lenders is a result of a few bad apples in the industry. Over time, the business has evolved and many good lenders are available, serving real estate investors and closing good deals. If you’re in the market for a hard money loan, you need to know the right questions to ask potential lenders to be sure you are dealing with credible lender who can give you what you need.
On the contrary, many real estate transactions can not conform with the conventional requirements, and vice versa. Therefore, hard money loans could be the preferable, if not the only, option for a borrower.
If you can’t pay back the loan, the property you have put up as collateral is subject to a foreclosure. However, most hard money lenders have no desire to take your property. Their service to you is an income stream for them, and by taking your property, they will lose the possible income of certain percentage points of the loan amount per year. It is in their as well as your best interest to keep you in the property. They will typically follow certain steps to try and avoid foreclosure and try to work things out amicably. The Notice of Default to trigger the legal foreclosure process is usually a last resort.