Trust Deed Investments and the secured, equity protected, non-correlated monthly cash flow should create peaceful and blissful sleep filled nights.
Sometimes, however, I wake up at 3 in the morning wondering about this hard money lending business and our loan originations. Usually, these sleepless encounters result from an upcoming decision or circumstance that causes angst. 2020 caused many of these annoying, eyes open staring at the ceiling, moments and I am determined to fight off and prevent this middle of the night insomnia attack in 2021. While the Serenity Prayer is comforting, I know I must also think ahead and take proactive actions to assuage work anxiety and prevent being “Sleepless in the OC”. The following table depicts concerning issues and proposed remedies to get back to sleep:
| Issue Causing a 3am Wake Up | Proposed Proactive Remedy |
| Fear of being passed by technologically | We deploy a tightly integrated and loosely coupled platform of off-the-shelf and custom software to maximize a better experience for our borrowers and our lenders. We have been working to test, deploy, and iterate new features and capabilities that keep us ahead of the competition |
| New CA Foreclosure Laws that add 75 days to the Foreclosure process and delay the cycling of properties through a Default | The ill-advised and poorly written SB 1079 hampers the critical Non-Judicial foreclosure process in California. Unfortunately, the unintended consequences of this Legislation will be higher costs and penalties to the struggling borrowers. Lenders will have to adjust pricing and loan to values (LTV’s) to reflect these new foreclosure timelines. |
| New CA Eviction laws | New Eviction Laws including AB 3088 reduce Landlord rights, add burdensome regulation, and delay the Eviction process. Lenders and Servicers have already implemented new procedures to accommodate these new stringent and mind-numbing regulations which will increase costs to the borrowers. |
| Business Model Changes | We continue to sharpen the saw with education and understanding of the many niches in Mortgage Lending. |
| Overreaching Government regulation | California is very fortunate to have laws enabling multi-lender loans. The California Mortgage Association, where I serve on the Board of Directors, fights for fair legislation, and educates Legislators and the borrowing public on the tremendous economic, job creating and home creating social advantages of these Hard Money Loans. |
| Missed an important Underwriting Item | Every loan brings a unique scenario. We are working to deploy more comprehensive guidelines, virtual checklists, CRM technology and many other safeguards to ensure quality loans from the outset. |
| Borrower Fraud | Our team including Underwriting, Service Providers, Title, Escrow, Servicing and IT will continue to sniff out fraud by using experience and new, more sophisticated, tools that catch loan red flags. |
| Title Companies adding last minute conditions to time sensitive loans | Tile companies add last minute exceptions to policies and demand additional unnecessary prophylactic documentation. Our job is to anticipate these new requirements and choose Title Companies that appreciate the many benefits of Private Money Loans. |
We hope you can sleep well in 2021 and can thoughtfully address your own issues with similar measures.