and we are not exaggerating!
Corinne Cordon, President
Capella Commercial Mortgage
3571 E. Sunset, LV, NV 89120
(702) 214-4700 Office
(800) 450-0936 Fax
We are a hard money lender who lends in Las Vegas, Nevada only. We lend on residential purchases and investor purchases and refinances. The only reason we cannot lend on owner occupied refinances is because of the federal law.
To All Mortgage Brokers Who Lend Hard Money on Residential Properties,
and To All Customers Who Ask For Money From Hard Money Lenders:
The Dodd-Frank Financial Reform Act was passed in 2010, with regulations to go into place as soon as July 21, 2011, and as the Dodd-Frank Act stands now, it will no longer be possible for your local hard money lender to lend any money for any owner occupant on any residential property ever again. The majority of my business is lending to people who want to buy, fix up, and live in an amazingly low priced home. The Dodd-Frank Act makes that impossible, and there is a very good chance that I will lose my business. But that isn't why I care!! I care because I help people who have no other choice; people who conventional lenders laugh at and put down; people who need another chance to realize the American dream. I care because our Government, whom I have always respected, but whom evidently knows nothing about what is really going on in communities, is outlawing a basic right of people to borrow money from whomever will give it to them and it is WRONG to make the law so onerous that no one will ever be able to lend to an owner occupant again. SO VERY WRONG!
House Minority Leader (later Speaker of the House) John Boehner said the bill is like "killing an ant with a nuclear weapon."
Hard Money is a community lending program; we stay in our backyards. Our investors are usually retired people in our same neighborhoods. We are lending money between one private individual and another private individual. We kept on lending even during the crisis because we know our borrowers; we can drive by their houses because we live here. Hard Money is a contract between two individuals who set their own terms; managed by a mortgage broker who is licensed, and who makes sure that no laws are broken, and that the proper disclosures are given. We aren't making huge amounts of loans; we aren't selling to Wall Street; and better yet, we aren't foreclosing on our borrowers, because OUR BORROWERS make their payments!! Our borrowers cry for joy when they are able to buy a house with a yard for their children to play in, even though they just lost their other home to foreclosure because they lost their job and their lender wouldn't listen to them, and the lender kept losing their paperwork, and then accidentally "just foreclosed". We hear these stories every single day, and we mortgage brokers who lend hard money on residential properties, know the good that we are doing.
So, to all of the mortgage brokers that are lending on residential property, and who follow RESPA, TILA, MIDA, HOEPA, and the SAFE ACT, to all of those hard money lenders who are licensed both state and nationally, I ask you to join our campaign to educate Washington as to what a local hard money lender does; the customers we help to buy their own home, when no one else would give them the money; the business owners who need to get money out of their free and clear property so they could stay in business during the Great Recession. We were there for them. When Fannie Mae, and Freddie Mac, and FHA couldn't lend, we were there, and we kept on lending. I ask you to write your story below and tell Washington what you do, and why you are a viable part of a community.
And to all of the borrowers who benefit from hard money; maybe you lost your home through no fault of your own; maybe you encountered severe illness, lost a job, lost a family wage-earner to death, filed bankruptcy; whatever the situation and however you were helped by a hard money lender. If you care about having the right to be able to buy a house to live in, to buy a house to rent out to supplement your income, or to refinance and get some money out of your residential property, I ask you to write your story below and tell Washington how you were helped by a hard money lender; how your regular lender turned you down repeatedly; and why you think it is important to keep local hard money lenders active in the community for situations that cannot be met by conventional lending.
WHY DOES IT HURT OWNER OCCUPANTS?
For the first time in many years it is possible for a family to buy a very, very affordable home all over the country. I'm talking about homes that cost under $80k, with three bedrooms and 2 bathrooms. These houses are usually bank owned, and usually have something wrong with them. Sinks missing, holes in the wall, appliances missing, etc, with means that you can't buy them with a conventional loan, but you can buy them with private money. Usually these homes get scooped up by the investors who pay cash or use private money, rehab them, and then resell them for a profit. But the majority of the investors have moved on, making room for non-investors - or "owner-occupants" to make offers and actually get the offer accepted.
Unfortunately, for one reason or another, these people don't qualify to get the FHA 203k loan to purchase and fix up the property. Maybe they lost a house to foreclosure because of a lost job, or illness; maybe their credit score is one point lower than the minimum; maybe they haven't been doing the exact same job for two years; maybe the underwriter thinks they have too much debt. Or the big one - the loan amount is too small for an institutional lender to both with. Who knows? The good news is that if they have been able to save up 40% of the purchase price, a hard money lender will give them a loan for one to five years. This is usually enough time for the family to either pay off the loan, or refinance with an institutional lender, when their credit score has gone up enough points. We have been able to help so many families get houses this year, and they have been so grateful and excited. Many of them had been turned down at the very last second by an underwriter and they thought there was no way they could get the house. It's common sense - if you can save up 40% to buy a house, you can probably afford to make a $430 per month payment for a $43,000 loan from our investors.
BUT NOW COMES THE DODD-FRANK ACT, and with one swoop of a pen, owner occupied borrowers can no longer borrower private money. Investors can, but forget about it if you want to live in the house. Actually, that isn't exactly true. If you are willing to go through a HUD approved counseling class (when you already know how to save up 40%), and if you can find a private money lender that is willing to give you a loan and not charge you more than $400, and not charge more than 8% interest, and then, if you can find an investor who is willing to give you a loan for as long as necessary to pay it off completely without having a balloon payment, then you can have a private money loan.
But that isn't private money!!!!
That is institutional money, and you can't make private money work the same way as institutional money, because it is private investors who are willing to lend out their money in first position to people who are able to save up 40% to buy a house. Private money works because it uses common sense, and because it is investors who are willing to take a risk on a family who wants to buy a house, fix it up, and live in it for a few dollars per month.
IT IS WRONG FOR THE GOVERNMENT TO DENY INVESTORS THE OPPORTUNITY TO LEND THEIR MONEY, AND TO DENY BUYERS THE RIGHT TO BORROW THAT MONEY, ON THE TERMS AND CONDITIONS THAT ARE ACCEPTABLE TO THE INVESTOR AND BUYER.
WE ARE REQUESTING THAT 'PRIVATE MONEY' OR 'HARD MONEY' BE DEFINED AS
"ANY LOAN MADE BY PRIVATE INVESTORS WHO LEND MONEY TO ANY BORROWER, WITHIN THEIR OWN STATE, WITH THE PROCESS MANAGED BY A LICENSED (FEDERAL AND STATE) MORTGAGE BROKER, COMPLIANT WITH ALL STATE AND FEDERAL LAWS."
WE ARE REQUESTING THAT THE ACT BE CHANGED SO THAT IT EXCLUDES 'PRIVATE MONEY' TRANSACTIONS AND THAT THE DEFINITION OF A 'FEDERALLY RELATED LOAN' BE CLARIFIED WITHIN DODD-FRANK, RESPA AND TILA TO MEAN ONLY LOANS THAT ARE FUNDED BY A GOVERNMENT SERVICES ENTERPRISES, LIKE FANNIE MAE, FREDDIE MAC, FHA, GINNIE MAE, AND USDA.
OTHERWISE AMERICANS WILL LOSE THE ABILITY TO BORROW MONEY FROM ANYONE EXCEPT THE GOVERNMENT - AND THAT'S DANGEROUS AND JUST PLAIN WRONG. JOIN US IN THIS FIGHT! IF YOU HAVE ANY ADDITIONAL CHANGES THAT YOU THINK SHOULD BE MADE, PLEASE SEND AN EMAIL TO CORINNE.CORDON@GMAIL.COM
SEE PAGE THREE OF THIS WEBSITE TO FIND OUT EXACTLY WHAT THE LAW SAYS AND WHY WE THINK WE ARE GOING TO BE REGULATED OUT OF BUSINESS.