tag:blogger.com,1999:blog-26672447460931616252024-02-08T02:43:52.877-08:00Great Falls Commercial LendingHard money, Stated Income, and Loans Modifications.Great Falls Commercial Lendinghttp://www.blogger.com/profile/13332107490901186836noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-2667244746093161625.post-37198088021647015222014-02-11T07:42:00.002-08:002014-02-11T07:44:02.859-08:00ONCE AGAIN, COMMERCIAL REAL ESTATE HAS EMERGED AS A VALUED ASSET<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;">Due to the improvement
in the American economy, many investors have chosen to fund the purchase of the
commercial real estate properties. The commercial real estate is any property
that is not used for residential purpose. Some of the examples of commercial
properties are shopping malls, IT parks and others. Any property built and
developed to host a commercial activity can be grouped under ‘commercial real
estate’.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;">The experts say that
there are billions of dollars in the loop, waiting to go to fund an
economically viable and profitable business. Funding can be sourced through private
equity funds, pension funds, life insurance companies, REITA and other sources and
it can be used for the purchase of commercial real estate properties. Even
banks have relaxed their underwriting criteria, so that more amount of capital
is available in the market.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;"><br /></span></div>
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<b><u><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;">Reason for the hike in the investment activity in
commercial real estate<o:p></o:p></span></u></b></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;">The first and the
foremost reason that the investors are very much motivated to invest in this
market is that the yield is expected to be high. In a few years, the real
estate has moved from ‘out of favor asset’ to ‘in favor asset’. People always
look for something to invest which has a very less risk involved in it. In the
risk and return threshold, any asset that has high return and very less risk
involved in it is considered to be a very perfect solution for investing. The
results of the stock and bond market are highly unpredictable. The bonds that
were considered to be safe suddenly became undesirable, due to the economic
condition.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;">In this uncertain
global economy, the high probability of turbulence in the bonds and stock
markets has made the real estate, a better option for the people to invest with
very little risk. They can surely expect high yield or return, in the future.
The solid income in the future and the less risk factor involved has made the
domestic and the commercial real estate, more attractive in the eyes of the
investors.<o:p></o:p></span></div>
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<b><u><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;">Forecast for commercial real estate and the elements
involved in it<o:p></o:p></span></u></b></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;">All the investment
results in the coming days of 2013 would be positive news for anyone who is
planning to be a part of the commercial real estate property arena. The supply
and demand game in the commercial real estate market is a complex and is always
fluctuating. The demand and the supply are negatively co-related. When the
supply decreases, the demand increases. Thus, the rents spikes out and people
look out for new construction opportunities. This type of market growth fuels
the practitioners, who are very specialized in this industry.<o:p></o:p></span></div>
<br />
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;">May it be a broker or
an investment manager, the number of commercial deals for real estate in this
year is forecasted to be very high. This high growth in the investment
activities in this industry would lead to more opportunities and commissions
for all the elements in this industry. With more number of funds available for
the industry, the brokers and the investment managers would experience a high
fee for the processes, the number of jobs related to this industry increases
and moreover, the output of this industry would increase providing high yield for
the investors.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;">Do you need a loan to to buy a commercial property?.</span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;">Call us!.</span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 14.0pt;"><br /></span></div>
<br /><br />Great Falls Commercial Lending<br /><br />1 Howe Ave, Suite 303<br />Passaic, NJ, 07055<br />Tel. 973-767-2850<br />Fax. 1-877-767-2150<br /><br />info@gfcommerciallending.com<br /><a href="http://www.gfcommerciallending.com/">www.gfcommerciallending.com</a> Great Falls Commercial Lendinghttp://www.blogger.com/profile/13332107490901186836noreply@blogger.com0tag:blogger.com,1999:blog-2667244746093161625.post-28613340652009224032013-11-13T12:52:00.001-08:002013-11-13T12:52:44.105-08:00Want 18% returns? Become a subprime lender<a class="thumb" href="http://www.marketwatch.com/story/bank-wont-give-you-a-home-loan-ask-hank-2013-11-11" target="_blank">
</a>
<br />
<div class="authors">
By <a href="http://muckrack.com/AAndriotis">AnnaMaria Andriotis</a>
</div>
<div class="desc">
<span class="domain"><a href="http://www.marketwatch.com/story/bank-wont-give-you-a-home-loan-ask-hank-2013-11-11" target="_blank">marketwatch.com</a></span>
—
Barry Jekowsky wanted to build "legacy wealth" to pass down to his
children. But the 58-year-old orchestral conductor, who waved the baton
for 24 years at the California Symphony, didn't trust the stock market's
choppy returns to achieve his goals. And the tiny interest earned by
his savings accounts were of no help.
Instead, Jekowsky opted for an unlikely course:
He became a subprime lender, providing his own cash to home buyers with
poor credit and charging <span class="mandelbrot_refrag">interest rates</span> of 10% to 18%. It may sound risky, but “it helps me sleep better at night,” he says. “Where else can you find [these] returns?”
<div class="" id="">
It has come to this. Unable to save enough for retirement with
traditional investments, baby boomers in search of yield are becoming
their own private Countrywide Financials. They’re loaning cash from
their deposit accounts and retirement plans and hoping for a big pay
day: specifically large returns that will boost their income and maybe
even allow them to pass an inheritance on to their children. There is no
official data, though it’s estimated that at least 100,000 such lenders
exist — and the trend is on the rise, says Larry Muck, chairman of the
American Association of Private Lenders, which represents a range of
lenders including private-equity firms and individuals who are lending
their own cash. “We know the number of people who are doing this is
increasing dramatically — over the last year it’s grown exponentially,”
he says.
</div>
<div class="" id="">
Often referred to as hard-money lending, the practice has undergone a
significant shift in the past three or so years. It used to be that
individual lenders were millionaires who could afford to loan cash and
handle the risk of not being paid back. Now middle-income pre-retirees,
ranging from chiropractors to professors, are joining their ranks.
</div>
<div class="" id="">
These lenders say the arrangements are a win-win: They are helping
buyers who would otherwise be shut out of the housing market while
earning an attractive return.
</div>
<div class="" id="">
Critics say they are gambling with cash they cannot afford to lose. If
borrowers stop paying the loans, lenders may not be able to take back
the cash they invested, which could put their retirement at risk. On a
larger scale, there’s also the threat of a new wave of foreclosures.
“You’ve got unsophisticated lenders and unsophisticated buyers [and] it
sounds like a very risky combination,” says Doug Miller, a real estate
attorney and executive director of Consumer Advocates in American Real
Estate, a nonprofit based in Navarre, Minn., which assists consumers
with conflicts of interest in residential real estate. </div>
<div class="" id="">
Many of these so-called mom-and-pop lenders are using their retirement
accounts — self-directed individual retirement accounts and
self-directed 401(k)s — to fund other people’s mortgages. Unlike regular
IRAs and 401(k)s, self-directed accounts permit investing in
alternative assets, like real estate. Cash is not technically withdrawn
from the account, but rather a portion of the account equal to the
dollar amount the borrower needs is invested in loan. The borrowers’
monthly payments, including interest rates that can be up to 15%, are
paid into the retirement account, which ends up taking ownership of the
property if the borrower defaults.
</div>
<div class="" id="">
Lending from these accounts has been on the rise over the past few
years. Pensco Trust Co., a custodian of self-directed retirement
accounts, says it has more than $600 million in secured loans, most of
which are mortgages — a figure that’s been growing at a 15% clip since
2009. Another custodian, Polycomp Trust Co., says the number of loans
secured by real estate has grown 18% over the past two years.
</div>
<div class="" id="">
The move toward mom-and-pop lending comes in the wake of what experts
say is the creation of a perfect storm: Banks are still skittish about
lending to home buyers with poor credit. Meanwhile, investors who have
endured years of low returns from plain-vanilla investment portfolios
are itching for something more.
</div>
<div class="" id="">
<strong>How the loans work</strong>
</div>
<div class="" id="">
The operations often function like a game of telephone. Subprime home
buyers, who know they have no shot at getting a mortgage from a bank,
start spreading the word to friends and acquaintances that they are on
the lookout for anyone who will lend to them. Eventually, the word
reaches someone who is willing to lend his or her cash. Other times, a
group of individuals pool their cash together to fund the loan.
</div>
<div class="" id="">
There is no official checklist used to decide who gets approved or
denied for these loans. Some individual lenders will only work with real
estate investors who plan to renovate and resell the property or want
to rent it out. Others are open to lending for owner-occupied homes. The
loans can be hundreds of thousands of dollars or much less than that:
say, $25,000.
</div>
<div class="" id="">
What all these lenders have in common, however, is their willingness to
lend to borrowers with low credit scores. In some cases, they do not
even check their scores. They point to examples of otherwise reliable
borrowers who fell on hard times during the recession and were unable to
keep up with loans. Many say they work with borrowers who intentionally
stopped paying mortgages (even though they could afford the payments)
when they ended up owing more on the loans than the home was worth.
</div>
<div class="" id="">
Some will even consider borrowers while they’re in foreclosure. A few
weeks ago, mortgage broker Mark Goldman received a call from a homeowner
in distress. A 60-year-old architect in San Diego had fallen behind on
his second mortgage and was facing foreclosure. The caller wanted to
know if he could refinance his way out of this mess. Complicating
matters, his credit score was in the low 500s. (FICO scores range from
300 to 850.) Goldman knew that traditional lenders would not consider
the homeowner — so he offered a different lifeline: He directed the
homeowner to his friend who offered to loan him $357,000 of his own cash
at a roughly 10% rate.
</div>
<div class="" id="">
Instead of focusing on credit scores, lenders say they require borrowers
to make a large down payment, typically at least 30% to 40%. Similarly,
homeowners who are trying to refinance will need the same amount of
equity. (In Goldman’s case, the homeowner had 35% equity.) Lenders say
this lessens the chances that they’ll incur a loss should a borrower
default. Also, by requiring a lot of equity, the chance that a borrower
will walk away from the home if values suddenly drop is diminished.
Separately, some will only work with borrowers in markets where home
prices are rising. That way, if they have to repossess the home, they
can resell it at a higher price in the future. </div>
<div class="" id="">
These lenders require quicker repayment than banks. Repayment periods
vary from as little as six months to as long as 10 years. Many of these
loans require interest-only payments, and at the end of the repayment
period a payment of the total balance (often referred to as a balloon
payment) is expected. Lenders say the terms can work for borrowers who
are planning to sell the home within this time period or who plan to
refinance with a regular lender in the future and need this time to
improve their credit score.
</div>
<div class="" id="">
<strong>Lawless territory</strong>
</div>
<div class="" id="">
Critics say the loan terms are reminiscent of the subprime lending that
led to the recession. If borrowers are unable to make the balloon
payment or to refinance into another loan at the end of the repayment
period, they could face foreclosure.
</div>
<div class="" id="">
Another concern: Lenders are operating in an anything-goes territory
with little federal or state oversight. In most cases, private lenders
are expected to follow the same mortgage lending regulations that banks
have to adhere to, but there’s little way for the government to know if
lenders are complying with the rules unless borrowers complain to a
government agency. “The problem is how do you find them, and it’s
something the federal government is not equipped to deal with,” says
Richard Painter, corporate law professor at the University of Minnesota
and former chief ethics lawyer for President George W. Bush and the
White House.
</div>
<div class="" id="">
Separately, lenders are supposed to be registered with the state where
they are originating loans, but many mom-and-pop loan officers are not,
says Guy Cecala, publisher of Inside Mortgage Finance, a trade
publication. And since most of these lenders do not originate a large
number of loans per year, they are not required to report their
activities to the federal government. “It’s a shadow business,” says
Cecala.
</div>
<div class="" id="">
Many lenders are looking for cover by sticking to investment real estate
only. New mortgage rules announced by the Consumer Financial Protection
Bureau kick in next year, which primarily impact mortgages for
owner-occupied homes. But the rules laid out by the bureau don’t
necessarily exclude investors, which means these lenders could find
themselves in hot water. For instance, lenders who provide interest-only
loans starting next year won’t be protected should borrowers who end up
in foreclosure file lawsuits against them. Those borrowers could claim
the lender didn’t do a thorough job confirming that they could afford
it.
</div>
<div class="" id="">
<strong>Unstoppable trend? </strong>
</div>
<div class="" id="">
In a sign that the trend may be here to stay, boot camps are training
average Joes to become private lenders. Last month, Wealth Classes, a
financial-education company based in Walnut Creek, Calif., that launched
in 2007, hosted a networking retreat for 250 students who recently
became lenders. Many of the company’s students end up lending to
subprime borrowers, though others lend to real estate investors who
don’t want to wait weeks to get a mortgage from a bank, says George
Antone, founder of Wealth Classes. (Private lending transactions
typically take about a week or two to go through, while a mortgage from a
bank usually requires at least one-month of waiting time.)
</div>
<div class="" id="">
Randy King, 61, joined Wealth Classes about three years ago when he
started using his own cash to fund other people’s mortgages. A former
U.S. Air Force servicemember, King, who is based in Colorado Springs,
transitioned to buying fixer uppers and selling them and is now a lender
for borrowers — many of whom are subprime — who are buying investment
properties.
</div>
<div class="" id="">
It’s not just mom-and-pop lenders who are becoming subprime loan
officers. The strategy is picking up on an institutional level as well.
Experts say a growing number of private-equity funds and hedge funds are
pooling together individual investors’ cash and using those funds to
lend to subprime borrowers at high <span class="mandelbrot_refrag">interest rates</span>.
</div>
<div class="" id="">
Going forward, experts say, it will be difficult to slow down privately
funded subprime loans. This funding spreads mostly by word of mouth, so
there’s no official advertisement plug that anyone can pull. Consider
King. He recently visited his chiropractor who inquired about his
lending operations and then asked if he could jump into one of the deals
as well. The chiropractor explained where he would get the funds to
become a loan officer: He would use some cash he had saved and withdraw
equity from his home using a home-equity line of credit.
</div>
<div class="" id="">
Most of all, though, the appeal of profits unavailable anywhere else are
likely to keep fueling this lending. Mark Goldman, who is also a real
estate lecturer at San Diego State University, says a student earlier
this year mentioned he was $50,000 short of the cash he needed to
purchase a home that he planned to renovate and resell. Banks wouldn’t
give the student a loan because he could not provide documentation that
proved his income. Goldman was intrigued and offered to loan him the
cash at a 17.25% rate. The student accepted, and after a few months of
renovations sold the home in September and paid Goldman back.
</div>
<div class="" id="">
MarketWatch was on the phone with him after he closed another deal with
this borrower this month. “Make me proud and make us both money,” he
said as he walked away to his car. <span class="endsquare"></span>
</div>
<div id="below">
</div>
<div class="emphasis">
<span class="credit"></span>
</div>
<div class="" id="">
<br /></div>
<div class="" id="">
Need a hard money lender?:</div>
<div class="" id="">
<br /></div>
<div class="" id="">
Great Falls Commercial Lending<br />
<span class="style1">1 Howe Ave, Suite 303<br />Passaic, NJ, 07055<br />Tel. 973-767-2850<br />Fax. 1-877-767-2150</span><br />
<a href="mailto:info@gfcommerciallending.com"><span class="style1">info@gfcommerciallending.com</span></a><br />
<span class="style1"><a href="http://www.gfcommerciallending.com/">www.gfcommerciallending.com</a> </span></div>
</div>
Great Falls Commercial Lendinghttp://www.blogger.com/profile/13332107490901186836noreply@blogger.com0tag:blogger.com,1999:blog-2667244746093161625.post-62634660441774975092013-11-04T07:29:00.001-08:002013-11-04T07:29:16.137-08:00Stated Income Commercial Property Loan<span class="style10"><span class="style1"><!--[if gte mso 9]><xml>
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<span lang="EN-US">Stated Income Commercial Loan is a hassle
free solution when looking out for financial support. Unlike the full document
commercial loan, the SICL is light and does not require full documentation. In
this type of loan, the borrower is not required to prove that they can afford
loan re-payments from their own income or assets. Instead, this type of loan
relies on the commercial property in which the loan is being invested either in
terms of the property real estate value or the rentals it potentially can earn.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-US">Main
purpose</span></b></div>
<div class="MsoNormal">
<span lang="EN-US">This kind of state income commercial loan
is designed keeping the borrower’s benefit in mind.<span style="mso-spacerun: yes;"> </span>Here, the borrower need to come up with 30
down payment that can be from his owns funds or a combination of 20% of funds
and a second mortgage from the current owner up to 10%. This kind of invested
commercial property does not have to be possessed in the name of the borrower
or the operating company but it can be held in the name of the holding company.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">Since this loan is literally undemanding
and easy on the borrower, it is usual done only on a first trust basis. Of
course, this also depends on the type of commercial property, credit of the
guarantor and the underwriting considerations.<span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-US">Key
benefits:</span></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-US"><span style="mso-spacerun: yes;"> </span>Less Paper Work</span></b><span lang="EN-US">:
The approval process is simple and involves minimum documentation, when
compared to the more traditional commercial loan. In most cases, since the loan
is only underwritten to the property cash flow or potential cash flow, it is
not necessary to provide any detailed documentation, which would have been the
case, if the borrower’s income was being assessed and tagged, to the loan.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-US">Fast
approval process: </span></b><span lang="EN-US">This commercial loan has a faster
turn-around time, since the paper work is at its minimum. This loan lays
emphasis more on the property cash flow hence the approval process is not
hampered as against the case of conventional loan process, where the borrower’s
income proof and credibility is scrutinized in detail before the approval takes
place.</span></div>
<div class="MsoNormal">
<span lang="EN-US">No verification is needed on the secondary
repayment source such as the borrower’s income and also such loans usually come
with a reduced credit scoring requirements making it easier and more flexible
for the borrower. </span></div>
<div class="MsoNormal">
<span lang="EN-US">This loan sees a quick closure, usually
around 30-45 days from the start to finish of the commercial plan</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span lang="EN-US">Pre-requisites</span></b><span lang="EN-US"></span></div>
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<span lang="EN-US">Stated income commercial loans have a few
simple terms that need to be fulfilled in order to be eligible for this loan.</span></div>
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<br /></div>
<br />
<ul>
<li><span class="style10"><span class="style1"><div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<span lang="EN-US"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span lang="EN-US">The type of business for which
the commercial loan is being applied for should have been in business at least
for 2 full years</span></div>
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<br /></div>
<div class="MsoListParagraph" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<span lang="EN-US"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span lang="EN-US">Although the credit score is
very relaxed, there still is a cap of 650 and above credit score of the
guarantor to be eligible for this loan.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;">
<span lang="EN-US"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span lang="EN-US">The guarantor and the operating
company cannot have bankruptcy that is more recent than 3 years <span style="mso-tab-count: 1;"> </span></span></div>
</span></span></li>
</ul>
<span class="style10"><span class="style1">
</span></span><br />
<div class="MsoListParagraphCxSpLast">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US">With the above pre-requisites in place,
securing a loan is easy and hassle free. </span></div>
<div class="MsoNormal">
<br /></div>
Great Falls Commercial Lending<br />
<span class="style1">1 Howe Ave, Suite 303<br />Passaic, NJ, 07055<br />Tel. 973-767-2850<br />Fax. 1-877-767-2150</span><br />
<a href="mailto:info@gfcommerciallending.com"><span class="style1">info@gfcommerciallending.com</span></a><br />
<span class="style1"><a href="http://www.gfcommerciallending.com/">www.gfcommerciallending.com</a> </span>Great Falls Commercial Lendinghttp://www.blogger.com/profile/13332107490901186836noreply@blogger.com0tag:blogger.com,1999:blog-2667244746093161625.post-46725303433421134602013-11-04T07:27:00.002-08:002013-11-04T07:27:30.767-08:00Need of a Commercial Loan Modification.<span class="style10"><span class="style1"><!--[if gte mso 9]><xml>
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</xml><![endif]-->Lenders are very interested in helping borrowers in the modification of their commercial loans. Commercial real-estate borrowers used to get help easily before than they do these days. As commercial mortgage modification comes into existence, borrowers, who qualify, are able to negotiate in terms of reducing the interest rate, extending the term of their loan, deferring past due balances and extending interest-only payments for unchanging period. <br /><br />Lenders are quite willing to modify commercial mortgages. The reason behind commercial loan modification is that most of the commercial mortgages in the U. S will have balloon payments, which borrowers are not able to satisfy. Hence, it is obvious that the borrowers need to refinance when balloon payment becomes due. As financial institutions do not want to lend money, borrowers have got trapped in a situation that they make huge payments or go onto default as they are not capable of refinancing. Nowadays, it becomes commonplace to do commercial mortgage modifications, due to unwillingness of lenders to foreclose on properties. <br /><br />Previous limitations about modifications have been relaxed by the Internal Revenue Service for fixed kinds of loans that is particularly held by REMIC’s. It means that borrowers got a chance to escape defaulting for getting a modification. Such a novel and beneficial change even advances a low-risk and smooth transition for all of those involved in it. <br /><br />This means a modification can occur even if a hardship is foresighted in the future, such as a balloon payment coming due a year from the date, the borrower applies for a modification. This is a boon to borrowers: no longer do they have to go into default, ruin their credit and risk foreclosure, just to get a modification. Now, let us see how to apply for a commercial mortgage modification. Before lenders get informed by borrowers about the modification, loan documents of borrower should get reviewed. <br /><br />Documents that are supplied by borrowers, to lenders, for modification are same as the ones the borrowers submit with the original loan application. Essential documents include profit and loss schedules, tax returns and proof of accounts. Lenders also need to provide borrowers information of present leases, payment histories of tenants, if the borrower is a landlord.</span></span><br />
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Great Falls Commercial Lending<br />
<span class="style1">1 Howe Ave, Suite 303<br />Passaic, NJ, 07055<br />Tel. 973-767-2850<br />Fax. 1-877-767-2150</span><br />
<a href="mailto:info@gfcommerciallending.com"><span class="style1">info@gfcommerciallending.com</span></a><br />
<span class="style1"><a href="http://www.gfcommerciallending.com/">www.gfcommerciallending.com</a> </span>Great Falls Commercial Lendinghttp://www.blogger.com/profile/13332107490901186836noreply@blogger.com0tag:blogger.com,1999:blog-2667244746093161625.post-10641793909323017162013-11-04T07:26:00.003-08:002013-11-04T07:26:33.335-08:00Reasons behind hiring Commercial loan modification specialists.<!--[if gte mso 9]><xml>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 115%;">It
becomes significant to call for commercial loan modification experts if it
becomes impossible to deal with the monthly payments for paying off mortgage.
It is also essential to consider such move by borrowers, when they are not able
to deal with balloon payments, which are due at the end of long-term or even if
they are not able to refinance the debt. These specialists also have the
ability to provide required help for the development of ability of the borrower
for negotiating with the lender, in terms of modifying the loan terms. It is
because banks are usually unwilling to restructure the commercial real estate
loans for a purpose that doing so may mitigate their incoming profit flow. </span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt;">As a huge number of borrowers are
willing to make a request for adjustments to the payment compulsions, doing
negotiation with lender for commercial loan modification becomes tougher. Banks
are also willing to become strict for restricting the number of approved
reductions in monthly payment compulsions. Banks will make the rule of limiting
the number of approved reduction in monthly payments strict as there are
several cases, resulting loss in cash inflow, which, in turn, may harshly
affect their operations. </span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt;">If observed from the borrower’s point of
view, he fights disputes in an unprofessional way, due to the fact that he does
have, a lot of exposure. This is the critical situation where the help of
specialist is needed, who can provide adequate assistance and support as
failure results into loss of property or even a foreclosure. These specialists
can apply for different loan workout strategies as they are aware about
different situations and even can decide on what the best approach is, for making
changes, which will help the petition get approved by the bank.</span><span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"></span></div>
<div class="MsoNormal" style="line-height: 18.0pt; margin-bottom: 12.0pt; text-align: justify; text-justify: inter-ideograph;">
<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">Another
possible and common way of strengthening the position of the property owners by
these experts is by making the analysis of the loan documents. They can even
find out a few violations that are committed by the lender against rules, by
making thorough observations of the elements of the contract. Those who commit
violations need to pay penalties that include declaration by a court that the
stipulations of the agreement like foreclosure may not be forced, on legal
basis. As a result, it becomes simple to induce the bankers when they realize
that they stand to lose, if they do not approve, the proposal. A financial
situation may develop in which the owner does not believe that he will return
to the right financial path. When this happens, he can agree to the use of
commercial short sales.</span></div>
<div class="MsoNormal" style="line-height: 18.0pt; margin-bottom: 12.0pt; text-align: justify; text-justify: inter-ideograph;">
<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">In
such a process, the purchaser may agree to buy property, for a significant
discount. As a result, the selling cost gets mitigated, as compared to the loan
cost, which is not paid yet. A few things are needed to be considered by the
owners and they include increased taxation as the forgiven cost can be
considered as a type of profit for property owners. </span></div>
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<span lang="EN-US" style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span class="style10"><span class="style1">Great Falls Commercial Lending</span><br />
<span class="style1">1 Howe Ave, Suite 303<br />Passaic, NJ, 07055<br />Tel. 973-767-2850<br />Fax. 1-877-767-2150</span><br />
<a href="mailto:info@gfcommerciallending.com"><span class="style1">info@gfcommerciallending.com</span></a><br />
<span class="style1"><a href="http://www.gfcommerciallending.com/">www.gfcommerciallending.com</a> </span></span></span></div>
Great Falls Commercial Lendinghttp://www.blogger.com/profile/13332107490901186836noreply@blogger.com0tag:blogger.com,1999:blog-2667244746093161625.post-25107779285969289072013-11-04T07:25:00.003-08:002013-11-04T07:25:38.574-08:00What Commercial Loan Modifications stands for?<!--[if gte mso 9]><xml>
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<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-outline-level: 1; text-align: justify; text-justify: inter-ideograph;">
<span lang="EN-US" style="color: #333333; font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 18.0pt;">In
an old saying, modifications are known as workouts. There are numerous
appearances in which commercial loan modifications are skills, which can
include fixing the rate, reducing face rate of the mortgage, changing margin
utilized for loan and changing the index. An important and costly lesson has
been learned by many lenders in 1970’s and 1980’s. Long term lending does not
work as well as it should. Lenders were provided with an amount for long
duration of time generally for thirty years in 1960 and 1970’s, which turned
out to be a financial disaster. </span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span lang="EN-US" style="color: #333333; font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">Different banks in 1970’s greatly caught with
long durations of low interest loans in a world of fast increasing interest
rate, which turned every long duration loan into a losing scheme for the
lender. Nowadays, the biggest issue is that no capital market is available for
commercial loans. There have been almost 40 percent rejections in value from
the year 2007, to date. Lenders have hugely reduced their LTV’s and the issues
have clearly become evident. </span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span lang="EN-US" style="color: #333333; font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">One more chance is to lengthen the loan term,
making amortization duration lengthier, in order to lower the payment and to provide
relief to the borrower. There are a few cases in which loans, which got cast
making use of twenty year amortization are being modified to 25, 30 and
unbelievably in a few cases, there were forty two year amortization schedules.
It can minimize the payment for making it comfortable for borrowers and return
loan to a performing status.</span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span lang="EN-US" style="color: #333333; font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">A huge disaster is developing in America and
the World is engaged in a business called Mortgage business. In a recent
Business Week article, it is said that complete debt totals for each of child,
man and woman in the U. S are $6.4 TRILLION that is $21,333.33. Big challenge
for both Lenders as well as Borrowers is similar like setting up a value for a
piece of property. Many things should be taken into consideration such as
location, employment, expenses, economy, future prospects, income and
occupancy.<span style="mso-spacerun: yes;"> </span>Between the year 2010 and
2012, nearly $1.4 Trillion dollars worth of commercial mortgages are planned to
balloon, which has been seen as one of the biggest retreats of capital in the
market. Lenders do not want to lend and if they want to, it is at high levels
and costs, which make no sense, if capital needs of different borrowers are
thoroughly observed. </span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span lang="EN-US" style="color: #333333; font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">It has been recognized by the Federal Government
that a great disaster is threatening the Commercial Mortgage market. It has
been mentioned by the FED that there is a single way of stabilizing the market
and that is to engage a combination of workouts and modifications. A white
paper also has been issued by the FDIC, which set forth twelve scenarios, under
which a bank is able to modify a loan. </span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: justify; text-justify: inter-ideograph;">
<span lang="EN-US" style="color: #333333; font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">It is quite veracious that the purchaser likes
to stay in possession of the property and is willing to own as well as operate
the building. Money, energy, effort and a significant amount of time has been
spent by borrowers for the management of the property. No Judgments filed as
the process of loan modification starts outside of the court system. The medication
process stands from offering and helps both the lender and borrower to
compromise on issues.</span></div>
<br />
<span class="style10"><span class="style1">Great Falls Commercial Lending</span><br />
<span class="style1">1 Howe Ave, Suite 303<br />Passaic, NJ, 07055<br />Tel. 973-767-2850<br />Fax. 1-877-767-2150</span><br />
<a href="mailto:info@gfcommerciallending.com"><span class="style1">info@gfcommerciallending.com</span></a><br />
<span class="style1"><a href="http://www.gfcommerciallending.com/">www.gfcommerciallending.com</a> </span></span>Great Falls Commercial Lendinghttp://www.blogger.com/profile/13332107490901186836noreply@blogger.com0tag:blogger.com,1999:blog-2667244746093161625.post-71592849771099595982013-11-01T13:36:00.000-07:002013-11-04T07:10:46.313-08:00Commercial Hard Money<span class="style10">Hard Money Loans are a great and creative way that has made its way in the Money Lending industry over the past few years because of the economy and banks being a lot more careful about their loans, these changes have made Hard Money Loans a great asset to your portfolio, and will certainly help your clients. As loan originators, we have to know all the options the market has to offer and Hard Money Loans can come in handy when there are significant changes in our clients lives. However, Hard Money Lenders like ourselves know beforehand that Hard Money Lending in New York and New Jerseys an investor’s world therefore they are not your typical lenders, there are requirements your client must meet in order to close a Commercial Hard Money Loan.</span><br />
<div class="style10">
These investors
are private individuals, or partnerships; Who are willing to lend money
but they will do it as long as the ROI is higher than traditional
lenders since their own capital is the one at risk.</div>
<div class="style10">
Commercial Hard Money Loans are a much more complex process than Residential Hard Money Loans.</div>
<div class="style10">
Investors will analyze the borrower like on any other Residential Hard Money Loan
but they will pay much more attention to the commercial property, and
by that we mean they will look at every detail since there is often
situations where there is something unusual about the property or the borrower, That process could bring the transaction to a complex but not impossible Commercial Hard Money Loan.</div>
<div class="style10">
Most borrowers in need of residential hard money loans have the following reasons :</div>
<div class="style10">
Lack of employment, low credit scores, personal emergencies, health issues and so on; all of these scenarios sometimes go hand in hand with commercial hard money, plus you have to keep in mind the fact that the income of any commercial property can change or that there may have been a change in the use of the property. </div>
<div class="style10">
Also your client cloud have pending judgments, liens and bank rejections these may be why he’s opting for a Commercial Hard Money Loan. </div>
<div class="style10">
Our best advise on any kind of Commercial Hard Money Loan
transaction is that you must know and understand ALL the reasons and
variables that can come into play as why does your client, the borrower need that Commercial Hard Money Loan.</div>
<div class="style10">
Once you understand your client’s situation you can start to look at all the other factors.</div>
<div class="style10">
First : The property must have equity. </div>
<div class="style7">
The industry standards are 70% LTV on residences, 65% on apartment complexes, and 50% LTV on land.<br />
Very rarely you will see an investor doing Commercial Hard Money Loans over owner occupied, industrial or special use properties.<br />
<br />
Equity is what makes a Commercial Hard Money Loan possible, therefore the appraisal will be the main factor to obtain a <span class="style10">Commercial Hard Money Loan for your client and he must know that the LTV will determine the risk to the investor, your job is to obtain the must accurate appraisal for the sake of both parties and your reputation as a Commercial Hard Money Loan Originator.</span></div>
<div class="style10">
Now that the equity and the LTV has been determined comes the exit strategy or how the borrower will repay the loan, this is of great concern for a commercial hard money lender. They will make sure that the borrower has a realistic plan for repaying the loan, otherwise you've wasted everybody’s time.</div>
<div class="style10">
This all should be explain on a very detail presentation and be submitted to the private investor, partnership or corporation.</div>
<div class="style10">
These private parties will demand of you to be diligent in providing precise information and paperwork on behalf of your client. Most of them have a list of documents you must provide along with credit check, income garnered from the property, current title, expenses of the property. This step is key, a well presented Commercial Hard Money Loan package will help you earn a good reputation and get the loan for your client. </div>
<div class="style10">
Go the extra mile, offer investors to inspect the property personally, give them the demographics of the location, traffic, access and
information about similar businesses in the area, and always get environmental reports.</div>
<div class="style10">
Each investor has its own guidelines but you must go into every loan with the mentality that this must be a win - win situation for everybody otherwise, move on to the next Commercial Hard Money Loan.</div>
<div class="style10">
</div>
<br />
<span class="style10"><span class="style1">Great Falls Commercial Lending</span><br />
<span class="style1">1 Howe Ave, Suite 303<br />Passaic, NJ, 07055<br />Tel. 973-767-2850<br />Fax. 1-877-767-2150</span><br />
<a href="mailto:info@gfcommerciallending.com"><span class="style1">info@gfcommerciallending.com</span></a><br />
<span class="style1"><a href="http://www.gfcommerciallending.com/">www.gfcommerciallending.com</a> </span></span>Great Falls Commercial Lendinghttp://www.blogger.com/profile/13332107490901186836noreply@blogger.com0tag:blogger.com,1999:blog-2667244746093161625.post-8914372761672794002013-11-01T11:55:00.001-07:002013-11-04T07:09:49.797-08:00HARD TO GET FINANCING? <div class="style1">
Mortgage & Housing Market News from HSH.com<br />
<br />
<b>HARD TO GET FINANCING? <br />
<br />
WALK SOFTLY INTO <a href="http://gfcommerciallending.com/hardmoney.html">HARD MONEY</a> LENDING BY GINA POGOL</b></div>
<div class="style1">
<a href="http://gfcommerciallending.com/hardmoney.html">Hard money, or private lending</a>, is gaining popularity as financing remains tight. But borrowers need to know exactly how it works before they sign for a loan.</div>
<div class="style1">
<a href="http://gfcommerciallending.com/hardmoney.html">Hard money</a> lenders are often the only alternative when banks and brokers are unwilling to lend. In today's economy, they are understandably in high demand. Exactly what is a<a href="http://gfcommerciallending.com/hardmoney.html"> hard money</a> lender? It is a lender that does not use conventional standards to extend credit to borrowers. While banks and brokers evaluate credit history, income and debt to determine credit worthiness, <a href="http://gfcommerciallending.com/hardmoney.html">private hard money</a> lenders will often provide a short-term loan based on the underlying value of the property. Though they sometimes are difficult to find and their terms can be steep, <a href="http://gfcommerciallending.com/hardmoney.html">hard money</a> lenders are often a good option when traditional financing is out of the question or when cash is needed quick.</div>
<div class="style1">
<a href="http://gfcommerciallending.com/investors.html">Investors</a> looking for foreclosure bargains and homeowners looking to buy some time are two groups increasingly pitching <a href="http://gfcommerciallending.com/hardmoney.html">hard money</a> lenders.</div>
<div class="style1">
<b><a href="http://gfcommerciallending.com/hardmoney.html">Hard money</a> for foreclosure investing :</b></div>
<div class="style1">
Recent studies reveal that more people are buying foreclosures <a href="http://gfcommerciallending.com/investors.html">investing</a> than ever before, and many are using <a href="http://gfcommerciallending.com/hardmoney.html">hard money</a> lenders to complete their purchases.</div>
<div class="style1">
Jason Parker, Shortsale Expert said "Our clients oftentimes use short-term <a href="http://gfcommerciallending.com/hardmoney.html">hard money</a> to lock up hot deals that are too good to pass up. Then, they either partner up with another <a href="http://gfcommerciallending.com/investors.html">investor</a> to refinance the deal or sell it to an end buyer, leaving plenty of profit on the table for everyone involved."</div>
<div class="style1">
Parker says many of his buying strategies don't even require <a href="http://gfcommerciallending.com/hardmoney.html">hard money</a>, but knowing where to find it quickly is an added layer of security for <a href="http://gfcommerciallending.com/investors.html">investors</a>.</div>
<div class="style2">
<a href="http://gfcommerciallending.com/hardmoney.html">Hard money</a> to avoid foreclosure :</div>
<div class="style1">
Homeowners trying to avoid foreclosure may take on <a href="http://gfcommerciallending.com/hardmoney.html">hard money</a> financing to gain time to sell the property. If you have significant home equity, your goal is to sell your home in a way that pays off the lender and maximizes your proceeds. A foreclosure sale on the courthouse steps does not accomplish those goals. So you refinance with a <a href="http://gfcommerciallending.com/hardmoney.html">hard-money</a> lender (some offer very short terms and require no payments), market the property, and hopefully sell it before re-defaulting on the home loan </div>
<div class="style2">
Finding <a href="http://gfcommerciallending.com/hardmoney.html">hard money</a> lenders :</div>
<div class="style1">
<a href="http://gfcommerciallending.com/hardmoney.html">Hard money</a> lenders can be found in multiple sources including local real estate investment clubs, mortgage broker contacts, newspapers or online.</div>
<div class="style1">
Peer-to-peer lending sites connect private investors who <a href="http://gfcommerciallending.com/services.html">have money</a> to lend with home buyers who need special consideration--folks with plenty of assets and good credit but unverifiable income, ex. Other firms operate in a similar way, getting money from <a href="http://gfcommerciallending.com/investors.html">investors</a> who decide which borrowers and projects they are comfortable with and what interest rate they will accept.</div>
<div class="style1">
These days, though, even <a href="http://gfcommerciallending.com/hardmoney.html">hard money</a> is harder to get. Mike Sigala of Z Loan Investment in South Lake Tahoe, CA explains, "Things have become tighter all around. The loan-to-values are lower because you have to be able to attract <a href="http://gfcommerciallending.com/investors.html">investor</a> money. what's fallen completely off the table is<a href="http://gfcommerciallending.com/hardmoney.html"> hard money</a> construction lending. It's perceived as riskier by <a href="http://gfcommerciallending.com/investors.html">investors</a> as well as some lenders."</div>
<div class="style2">
Pitfalls Customers who can find a <a href="http://gfcommerciallending.com/hardmoney.html">hard money</a> lender shouldn't expect to be offered grade-A terms even if </div>
<div class="style1">
their credit is good--that's just not the private-lending business model. <a href="http://gfcommerciallending.com/services.html">Private-money</a> mortgages typically have rates in the double-digits and often come with several up-front points. <br />
Those who don't have at least 30 percent to 40 percent home equity or down payments probably won't even be able to get a loan. That's because <a href="http://gfcommerciallending.com/hardmoney.html">hard money</a> lenders limit borrowers' loan-to-value ratios so they can still make money from the properties if they have to foreclose. </div>
<div class="style1">
Consumers need to watch out for "loan-to-own" predators, too. They structure <a href="http://gfcommerciallending.com/hardmoney.html">hard money loans</a> in such ways that borrowers inevitably fail, the lenders can take possession of the collateral properties and then profit from their sale. Carefully go through the terms of your loan and engage a real estate attorney if you don't understand them.</div>
<div class="style2">
Costs</div>
<div class="style1">
What does a typical <a href="http://gfcommerciallending.com/hardmoney.html">hard money loan</a> cost? That's difficult to say because there really is no "typical" transaction. But someone trying to avoid foreclosure might run into the following terms: </div>
<div class="style1">
• Interest rates: 10 percent to 18 percent;<br />
• Balloon payment: typical, usually due after one or two years;<br />
• Maximum loan-to-value ratio: anywhere from 50 percent up to 70 percent;<br />
• Points: might be beetween four to eight.<br />
<br />
<b>Protection</b></div>
<div class="style1">
<a href="http://gfcommerciallending.com/hardmoney.html">Hard money</a> lending can be wild and woolly, but for those purchasing one-to-four unit properties that they intend to occupy, there is another lending option. Fractional lending, in which groups of <a href="http://gfcommerciallending.com/investors.html">investors</a> provide the money on these homes, is regulated by the federal government and, in many cases, state governments. Borrowers still get the protections afforded by Regulation-Z, the federal code which covers mortgage lending, and other laws in two significant ways.</div>
<div class="style1">
First there are added restrictions, such as limitations on prepayment penalties, negative amortization, default rates, and balloon payments. If the loan contains any prohibited terms, it is a violation and subject to an extended rescission, meaning you can cancel the loan.</div>
<div class="style1">
Second there are additional disclosures that must be provided to the borrower that are triggered by loan terms considered especially burdensome. These disclosures must be provided three days prior to signing, and if they are not, the loan is also subject to the extended right of rescission. <br />
There are also additional statutory penalties and, in some states, California included, the lender may be subject to punitive damages. <br />
Note: These restrictions don't apply if you borrow the entire amount from a private person or finance <a href="http://gfcommerciallending.com/investors.html">investor</a> property.</div>
<span class="style1">HSH NEWS 2011.<br />
Commercial and Hard Money Lending Magzine.</span><br />
<br />
<span class="style1">For Hard Money Loans contact us:</span><br />
<br />
<span class="style1">Great Falls Commercial Lending</span><br />
<span class="style1">1 Howe Ave, Suite 303<br />Passaic, NJ, 07055<br />Tel. 973-767-2850<br />Fax. 1-877-767-2150</span><br />
<span class="style1">info@gfcommerciallending.com</span><br />
<a href="http://www.gfcommerciallending.com/"><span class="style1">www.gfcommerciallending.com </span></a>Great Falls Commercial Lendinghttp://www.blogger.com/profile/13332107490901186836noreply@blogger.com0