NY regulator cracks down on hard money lenders

by Ryan Smith16 Sep 2014
New York’s top financial regulator has opened a probe into several hard money lenders.

The state’s Department of Financial Services has issued subpoenas to nine hard money lenders in an investigation into possible predatory lending practices, according to a Bloomberg report. The department feels that lenders may structure certain types of high-interest loans to include terms designed to drive borrowers into foreclosure.

“While many hard money lenders may be engaged in legitimate financial activities, certain unscrupulous companies appear to be taking advantage of borrowers in tough financial straits by making loans that are designed to fail,” said Department of Financial Services Superintendent Benjamin Lawsky.
The department has subpoenaed the following lenders:
  • Alston Ferris Capital Partners
  • IAS Group LLC
  • Liberty Lending Group
  • Manitoli LLC
  • Mercier Realty Inc.
  • Meritt Funding Inc.
  • PMG Lending Group
  • Quick Funding LLC
  • Rushmore Capital Partners
None of the subpoenaed lenders has been accused of wrongdoing, Bloomberg reported.



  • by Nancy V | 9/16/2014 3:20:20 PM

    This should be interesting. This is a big topic of conversation lately.

  • by Cory U | 9/16/2014 6:33:36 PM

    This will be interesting. My personal experience with hard money lenders is that they offer short-term mortgages to mostly investors looking to quickly acquire a commercial property while seeking traditional financing, or those looking to purchase and flip residential properties. From the surface they look predatory because of their up-front points and higher than conventional financing interest rates. However, you take the short term aspect of the mortgage (usually 90 to 180 days) it's understandable why they do: The mortgage won't be around long enough to make any money on it, so they need to get it all up-front. Hard money lenders want their money back quick so they can lend to someone else and collect points again. They don't want to foreclose and hold properties. That's not the business they are in.


Is TILA-RESPA a good or bad thing long term?