🚫 Are you lending money? · The MHP Pros Mastermind

Darina Aleksa

Jan 24 • Financing & Closing

🚫 Are you lending money?

1. Don't feel bad when you say no to a deal.

2. Always remember that PML must haves are:

1. Promissory Note

2. Deed of Trust or Mortgage

3. Lenders Title policy (comes from the title company - paid by the borrower)

4. Added as loss payee additional insured - on hazard/liability insurance

5. Personal Guarantee

3. Always remember to:

1. Verify your position with title. When you are in 2nd, verify the 1st position payments are current and being made on time. You can get power of attorney to be able to speak with first position lender

2. You can Require monthly payment instead of being paid out at the end of the loan

3. Find out what the exit strategy is. Is there a clear money source being used to pay back your principal.

4. Always underwrite the property to make sure the ARV supports you having to take over the property should the borrower default.

1. Remember there are foreclosure fees, holding costs and the cost of the sale. If you are in 2nd position there is the cost to pay the primary lender back should you choose to foreclose and put yourself in 1st position.

5. Never do a deed in lieu unless you know that there are no other lenders/liens ahead of you. When you do a deed in lieu of foreclosure no liens are wiped out. This means you would be responsible for the first position loans to be paid off - and any other liens associated with the property. A foreclosure sale wipes out all liens. People would be coming after you to get paid rather than the former owner.

Make smart decisions 🪤

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