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HARD MONEY LOANS OCCUPANCY TYPE
People,
Just to clarify. It is illegal to do HARD MONEY LOANS for owner-occupant properties in every state in the nation. If someone is trying to sell you hard money loans on an owner occupant home, it is 100% a crime and violation of mortgage guidelines and could be classified mortgage fraud. HARD MONEY LOANS is a great loan program for investment real estate properties and commercial properties ONLY. Owner-occupant primary homes are regulated and the DODD FRANK rules and regulations apply.
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4 Replies
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It’s to bad we can’t do owner occupied. I feel like it is so that the banks are protected in giving majority of the loans in the US. Seller financing is a great way to get a loan other than the traditional banks if needed in owner occupied. Thanks for the information as always!
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Reason why hard money lenders don’t lend on owner occupied homes is because it takes years to foreclose. Investment properties get foreclosed in couple of months.
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That makes sense, especially in WA. Foreclosure process is so many steps and do time consuming right now.
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Illicit activity such as owner-occupancy hard money loan fraud has become commonplace and rather contagious recently. Here’s a breakdown of the key points with a few helpful quotes:
Occasionally, an HML involving an owner-occupied property might violate occupancy-type regulations. That precisely explains how contracts can have a moratorium or an expiry date.
Possible Criminal Charges: In essence, the violation of borrowing laws tends to result in the perpetrator being accused of breaching a legal agreement without prior authorization.
The Dodd-Frank Act: Complex financial credit institutions habitually impose systematic hierarchies on homeowner properties for funds lending. However, since hard money loans can be easily obtained, the rules-based lending system tends not to apply.
But the plus side of taking out such loans is that they don’t take an eternity to get approved, if at all—for those who are looking into renting out or constructing new residential houses, seeking funding for commercial buildings can be solved by taking out an HML.
The moral consolidation is quite simple—avoiding seeking HML’s occupied residence is key, but reading through the regulations will not hurt if one needs to.
Due Diligence: When you encounter offers for hard money loans on owner-occupied homes, it is very important to be careful and consult with experts so that you do not become a victim of fraud.
If you still have questions about hard money lenders or want more information on any other related topic, do get in touch!