Montegra Capital is a Denver based commercial private money lender for commercial and investment purpose residential properties.  We started business in 1971 and have been making these loans for 50 consecutive years.

During our underwriting of loan requests, we meet many borrowers who have found themselves in a very unfortunate position through dealing with out of state, non-local, private money lenders.  Sometimes Montegra can help them but often it is too late.  Here are some of the stories we have heard recently.

An out of state west coast lender on a collection of single-family homes refused to provide a payoff letter for the borrower until the borrower agreed to allow imposition of unexpected penalties and default interest rate on their loan.  The Borrower was forced to delay their loan payoff for three months until they could force their out of state lender to provide an accurate payoff letter.  The delay created more interest to the borrower and almost prevented them from getting this loan paid off and getting them out of the clutches of this lender.

A Borrower applied for a loan from Montegra but stated that they could not provide an appraisal deposit or other required deposits because they had given all their liquid cash to an east coast national lender to pay its substantial up-front fees only to find out that they did not get the loan they needed.  All their deposit money given to this predatory lender went down the drain and they were unable to get the financing they required to save their project.  Montegra could not work with them because of their lack of funds to use to apply for a loan.

More then one of our borrowers described being a victim of a “bait and switch” loan where, at the closing table, the out of state lender provided them with loan documents at a much higher than agreed upon interest rate and higher than agreed upon loan origination fees.  They were either forced to pay these unfair charges or find themselves without the loan that they had anticipated for several months.

The moral:  know your Lender.  Ask your attorney, your CPA, Realtors and developers you know about the reputation of your Denver-based Lender.  Do your due diligence on your local Lender in the same way as you do your due diligence on your real estate purchase or development.  It is difficult, if not impossible, to get accurate information on the reputation of a lender in New Jersey or in Seattle.  It is relatively easy to get feedback on a Denver lender, particularly if that Lender has been around for a substantial amount of time.  Getting victimized by a non-local Lender is not fun and is not necessary.