{"id":417,"date":"2012-01-12T14:04:08","date_gmt":"2012-01-12T21:04:08","guid":{"rendered":"http:\/\/privatemoneysource.com\/broker-blog\/?p=417"},"modified":"2012-01-12T14:04:08","modified_gmt":"2012-01-12T21:04:08","slug":"hard-money-it-doesnt-have-to-be-so-hard","status":"publish","type":"post","link":"https:\/\/privatemoneysource.com\/broker-blog\/?p=417","title":{"rendered":"Hard money – it doesn't have to be so hard"},"content":{"rendered":"

Clay Sparkman <\/em>
\nIn my 18 years of working with loan brokers on private money transactions, one of the most significant difficulties I have encountered has been simply making our process understood\u2014in other words, explaining the sort of information, the timelines, and the expectations that are suitable and necessary to a private money transaction.\u00a0 It seems that brokers unfamiliar with private money tend to fall into one of three traps: (1) They are intimidated by the idea of the process, and so simply don\u2019t proceed; (2) They come into the process exactly as they would come into a conventional transaction; or (3) They think that since it\u2019s private money, there are no rules and recklessness is acceptable.\u00a0 All three of these mindsets are equally disastrous to carrying a private money loan through to its conclusion, and merely result in wasted time and effort\u2014for all parties involved.
\nThe goal of any private money loan process should be efficiency.\u00a0 In other words, the goal should be to either close the loan or get to a \u201cNo\u201d as quickly and painlessly as possible.\u00a0 It\u2019s all about a simple and streamlined exchange of information in definite stages.
\nOver the years, I have worked out a very simple system that has been proven to be highly efficient.\u00a0 Our underwriting process works as follows:
\nStep 1<\/span>
\nBroker submits a summary of the loan scenario to Fairfield.\u00a0 This may be done via phone, fax, e-mail, or on-line submission form.\u00a0 I highly recommend that brokers consider using the online submission form on our website, as it is designed to ensure that the necessary information is provided.\u00a0 The online form is at the following link:\u00a0 http:\/\/www.privatemoneysource.com\/loanproposal.php<\/a>
\nIf the scenario is not one that Fairfield can act on, we will tell you right away and the process will be terminated.
\nInefficiency traps<\/span>
\n(1a) If a broker submits an incomplete summary we will have to go back and forth for a while until a full summary is obtained.
\n(1b) Some brokers choose to skip this step altogether and jump straight to step 3.\u00a0 This has almost always proven to be a complete waste of time and resources.
\nStep 2<\/span>
\nHaving obtained a complete summary, a Loan Coordinator for Fairfield will provide a ballpark quote regarding rate, fees, term, and loan conditions.\u00a0 The broker shall then take this information to the borrower, discuss and explain it, and make sure that it is acceptable to the borrower.\u00a0 If it is not acceptable to the borrower, then the process is terminated.
\nInefficiency traps<\/span>
\n(2a) Many brokers, it seems, are reluctant to approach borrowers with the facts of a private money loan.\u00a0 Apparently they are hoping the borrower won\u2019t notice the rate and fees, or are hoping to have them far into the process so it will be difficult to back out.\u00a0 This is a huge mistake.\u00a0 If the borrower isn\u2019t fully on-board from early on, most likely a great deal of time and energy will be wasted.
\nStep 3<\/span>
\nThe broker shall contact Fairfield to say that the loan is a go.\u00a0 At that point the Loan Coordinator will provide the broker with a list of items need in order to process the loan request.\u00a0 The broker shall collect the appropriate items and overnight mail or e-mail these to Fairfield.
\nInefficiency traps<\/span>
\n(3a) If the broker fails to get appropriate checklist of needed items, they will most likely submit items that are not required and fail to submit certain items that are required.\u00a0 This is a waste of time, copy paper, and postage (time being the most precious and notable resource wasted).
\n(3b) If the broker faxes the packet, it will not be of suitable quality for processing the request.\u00a0 A single image file containing the packet may be e-mailed, but generally I have found that this is problematic in one respect or another and leads to a loss of time.
\n(3c) If the broker e-mails a vast array of individual files, this is very difficult to make sense of. We request that you prepare a single Adobe or Word file with all of the information organized and displayed appropriately.
\nStep 4<\/span>
\nFairfield will generally review a file submission within 48 hours.\u00a0 If details come out that are problematic, additional information or supporting documentation may be requested.\u00a0 If the loan proves not to be doable based on a complete review of the file, the loan process is terminated at this point. \u00a0(Generally this would be the case if the documentation did not support the concept initially submitted in step 1.)
\nStep 5<\/span>
\nFairfield will ask for a refundable deposit (the amount to be determined by various practical aspects of the loan) and a loan agreement letter will be drafted.
\nStep 6<\/span>
\nUpon receiving the deposit and a signed copy of the letter, Fairfield will make an appointment to personally inspect the property.
\nStep 7<\/span>
\nFairfield performs an on-site inspection of the property (and visits various comparable properties).\u00a0 This is generally the final step in the underwriting process.\u00a0 It is rare that a loan is terminated at this point because the process leading up to this point has been rigorous and complete.\u00a0 Termination is only likely to occur if there is a notable discrepancy between what could be noted on paper and with photos regarding the subject property and the comps and what could be seen in person.\u00a0 (This occurs maybe 5% of the time.)
\nAt this point, the underwriting is complete and the loan can generally be closed within 1 to 5 working days.
\n\u2013 Clay (clay@privatemoneysource.com, 503-476-2909)
\nClay is Vice President of Fairfield Financial, a primary source for private money since 1964.\u00a0 Fairfield is currently targeting loans in OR, WA, AK, CA, CO, ID, FL, GA, ID, MT, NV, NY, OK and TX.\u00a0 To submit a loan to Fairfield for consideration: <\/em>http:\/\/www.privatemoneysource.com\/loanproposal.php<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Clay Sparkman In my 18 years of working with loan brokers on private money transactions, one of the most significant difficulties I have encountered has been simply making our process understood\u2014in other words, explaining the sort of information, the timelines, and the expectations that are suitable and necessary to a private money transaction.\u00a0 It seems […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":""},"categories":[8,26],"tags":[42,43,46,54,55,58],"_links":{"self":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts\/417"}],"collection":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=417"}],"version-history":[{"count":0,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=\/wp\/v2\/posts\/417\/revisions"}],"wp:attachment":[{"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=417"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=417"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/privatemoneysource.com\/broker-blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}