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To Learn More About our NextGEN philosophy, visit our blog: http://hardmoneywholesalelender.blogspot.com
Bridgelock Capital Increases Funding
In a market where subprime lenders are imploding, brokers are exiting, and securitization has become a hardship, Bridgelock Capital continues to push full steam ahead with our NextGEN way of conducting business within the mortgage space.
Bridgelock Capital has increasingly become a multifaceted business partner for many Mortgage Brokers and Bankers. "We see this recent credit crunch as a time to show our strength and stability as a direct portfolio lender," says Brent Houston, Chief Operating Officer. "While the majority of lenders have become much more conservative in their underwriting guidelines, thus pushing many mortgage brokers and bankers out of the industry, we are fostering new relationships to ensure client retention in becoming the NextGEN lender."
Important Update Regarding Turn Time for Initial File Review:
Due to current market conditions, we are experiencing increased levels of submissions which have resulted in a 48 hour turn-around time for initial loan submissions. We are still meeting our 24 hour Docs & 24 hour funding service levels. For all New Submissions, please email them to LoanSubmit@bridgelockcapital.com to expedite your submission.
We appreciate your business.
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Every Question you ever had about Private Money
Private money is often misunderstood. Many industry professionals know very little about it and fallacies and misconceptions tend to dominate the collective wisdom.
Private money is generally used as a bridge: a way to get from point A to point B. It is generally a short to medium term solution (1-6 years) and there is nearly always an exit strategy going in. It is used for all types of real estate secured financing: commercial retail, restaurants, hotels/motels, marinas, elder care facilities, industrial, agricultural, raw land, land development, construction, rehab, multi-family and even single family homes.
Private money rates generally range from 10% to 15%. The rate is determined by looking at a combination of factors: (a) LTV ratio, (b) strength of borrower, (c) condition/desirability of property, (d) actual cash-in or real equity contributed by borrower. Typically our rates fall in the 11%-13% range.
Bridgelock Capital charges a loan fee which equals to a % of the gross amount of the loan as well as our administrative and underwriting fees. There are never any hidden fees. For a better understanding of our fees, please click here
Yes, if there is enough equity in the project. This is frequently the case.
Bridgelock Capital is a rather unique lender by offering a variety of products to meet your client’s needs. Unlike most of our competitors, we try not to fit all borrowers into the same matrix and allow for you to customize your borrower’s solution. Because of this, some of our programs have pre-payment penalties and some do not. However, you may always buy-out the prepayment penalty.
There are many reasons why a borrower would choose to use private money over a cheaper institutional option, but typically either the borrower or property doesn’t meet conforming lender guidelines. For example, professional real estate investors like to use private money when buying because they are able to make offers which are not constrained by long timelines and numerous rigid conditions. Often times speed is a very significant factor in completing a profitable transaction and in those cases it often makes sense to pay for a short-term private money option rather than lose the deal. Frequently the condition of a property won't allow for initial financing with conventional money and in those cases private money may be used. Often, the type of property is a factor. Banks don't like lending on raw land and lots, but private money lenders are more inclined to do so. Cash leverage is another factor. Bridgelock Capital, for example, loans based on the true value of a property, not the purchase price. So, sometimes we lend 100% of the total acquisition cost for a property. The structure of the deal may be a factor. Most private money lenders allow the buyer to establish their equity through the mechanism of a seller carry back; banks won't do this. The list goes on and on.
At Bridgelock Capital, our most common loans are typically sub-500 borrowers, foreclosure bailouts, bankruptcy buyouts, non-conforming borrowers needing to go stated income, have an existing notice of sale (NOS) or notice of default (NOD), need quick cash-out or just doesn’t meet conventional underwriting guidelines. There are many reasons why borrowers need access to private money, in fact, private money is now becoming the new sub-prime lender with the recent market turmoil.
We prefer to have one since they provide us with a professional opinion regarding value. However, some files are time sensitive and just don’t have time for an appraisal to be completed. That being said, we prefer to have appraisals for our analysis and have the flexibility to make decisions without one.
We do have specific underwriting guidelines, but this doesn’t prevent us from underwriting a file with a common sense approach. Some lenders might call this out-of-the-box underwriting, but we just view this as a great way to provide creative solutions for our customers. As far as credit, our team is not looking for a perfect credit score (though we do have quite a few borrowers with credit scores in the 700s and just as many under 500). We do look for patterns of payment over time and understand that everyone encounters financial hardship at sometime in their life. We want to be there to help your borrower and help transition them into better times.
Regarding financial strength (net worth and income), our primary concern is seeing that the borrower has either enough income (stated) or enough cash or liquid assets (stated) to ensure the loan is affordable for the borrower. That means showing the capacity to make payments for the duration of the loan. Beyond that, our underwriting can be flexible with an honest story. Yes, Story. We like to understand the borrower’s situation and how we can help. Remember, we use our innate ability to access the situation in applying our commonsense underwriting.
There are basically four steps.
The borrower (or a representative for the borrower) runs the scenario with an account executive. If we the scenario is acceptable, we require a complete loan submission.
Fax: Submission Form
Fax: 1008/1003
Fax: Credit Report
Fax: Broker Disclosures
Fax: Prelim/Title Commitment
Fax: Signed Borrower Authorization
Fax: Payoff Demands
Email: Appraisal
Email: FNMA 3.2 File
We generally ask for a minimum of 10 days from the time we receive the loan submission until closing, though we can close faster to accommodate special circumstances.
We have been known to close loans in as quickly as 3 days, but more typically, you should figure on 10 days. (Keep in mind that it is only with a complete loan submission.)
To be perfectly frank, it is our belief that mainstream mortgage brokers are being squeezed out of the industry. Lenders are ramping up their operations to better provide online loan sourcing directly to borrowers. We saw a similar thing in the travel industry over the past years. The travel agents that have survived and even thrived, are the ones who effectively established niches within the industry. It is our belief that the same will be true for mortgage brokers. Plain vanilla loans can be easily processed in an assembly line fashion which easily translates to the world of the novice and a web browser. Niche lending, on the other hand, tends to be a hand-crafting of sorts and cannot be easily automated. Look at private money. There are no absolute rules. Many factors must be considered in making a decision and frequently those factors are intangible. Ultimately a high degree of thought, work, and commonsense is involved. Private money will always be a people process. So if you tell us, "I am not interested in private money because I don't do unusual loans," our team would say to you, "You might want to reconsider."
It is simple. You bring us a borrower. We price the loan to you. (Think of yourself as a wholesale buyer.) You price the loan to your client, adding your fees as appropriate. You stay involved in the loan (or not) as you choose and prior to closing, you submit a fee demand to us and we include this in our lender documents for you to be paid directly from escrow.
It is difficult to find an answer to this question. We've heard plenty of speculation. Some people say that it's because the money is used for "hard to do" loans. Others say it is because the loans are "hard to get" or "hard to pay." It is our belief that it is called hard money because traditionally it has been "real money" in the sense that it is not borrowed. Institutions loan borrowed money and in this sense, they loan "soft money."
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