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Monday, August 28, 2017

Commercial Lending Stays Strong In 2017 Despite Potential Snags

Multiple industry trends have helped keep commercial lending strong this year. Learn more about these trends to see where your business can take advantage.

A number of factors have made the commercial real estate mortgage industry more dynamic in 2017 than ever before. More and more non-traditional lenders have entered the game, leveraging the latest integrated workplace technology to speed up the underwriting process and get an edge over established mortgage firms. As a result, commercial lending has stayed strong in 2017, even in spite of developments that might be expected to derail this consistent growth.


Lead by a major rise in commercial mortgage–backed securities, the commercial real estate mortgage industry performed especially well between March and June of this year. Urban Land, reporting data compiled by commercial real estate firm CBRE, said that commercial loan closings not only continued to rise between March and June but also finished 27% higher than the previous year.


Researchers from CBRE noted that pension funds, insurance companies, banks and other non-traditional lenders are actively investing in commercial mortgage-backed securities (CMBS). This diverse source of growth has been a major factor in helping the industry stay strong despite a myriad of potential problems.


The first potential snag that the lending market has seemingly overcome in 2017 is ongoing action by the Federal Reserve to raise interest rates that directly impact commercial real estate mortgages. Typically, interest rate hikes can discourage borrowers from taking loans or limit the amount of funds they choose to borrow.
According to Forbes, much of the potential issues have been offset by companies trending toward 5-7 year financing periods, allowing borrowers to refinance as their investment plays out. This flexibility is a strong incentive for borrowers to consider a commercial mortgage in spite of the increase in interest rates.


The National Association of Realtors also reported that large segment of 10-year commercial real estate mortgages, taken out between 2005-2007, were scheduled for refinancing between 2015-2017. Many experts suspected that this wave of refinanced loans would be detrimental to new loan growth this year. On the contrary, the number of transactions that have failed during the refinancing process have decreased over the past few years rather than spike. This unexpected stability has clearly been a major contributor to the strength of the lending market in 2017.

A Strong Commercial Lending Market Could Propel Your Business

More flexible lending conditions across the industry have undoubtedly played a role in sustaining a healthy lending market. Likewise, greater availability of short-term commercial loans have encouraged businesses to pursue new business opportunities. Any company that can leverage access to rapid capital or have long-term financial goals can directly benefit from market conditions in 2017.

 

Find out what you’ll need to take advantage of commercial lending opportunities

Want to make the most of the healthy lending market? You’ll be in a strong position to maximize a commercial mortgage by working with an experienced professional. By taking advantage of their expertise, your company stands to deploy a practical financial strategy in 2017 with the promise of a high ROI. Don’t miss out on this chance to pursue your company’s most ambitious business goals this year.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
clip_image002clip_image004clip_image006clip_image008

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years. 

Technorati Tags: commercial loans,commercial lending.commercial mortgage

Commercial Lending Stays Strong In 2017 Despite Potential Snags

Multiple industry trends have helped keep commercial lending strong this year.

Learn more about these trends to see where your business can take advantage.

A number of factors have made the commercial real estate mortgage industry more dynamic in 2017 than ever before. More and more non-traditional lenders have entered the game, leveraging the latest integrated workplace technology to speed up the underwriting process and get an edge over established mortgage firms. As a result, commercial lending has stayed strong in 2017, even in spite of developments that might be expected to derail this consistent growth.
Lead by a major rise in commercial mortgage–backed securities, the commercial real estate mortgage industry performed especially well between March and June of this year. Urban Land, reporting data compiled by commercial real estate firm CBRE, said that commercial loan closings not only continued to rise between March and June but also finished 27% higher than the previous year.


Researchers from CBRE noted that pension funds, insurance companies, banks and other non-traditional lenders are actively investing in commercial mortgage-backed securities (CMBS). This diverse source of growth has been a major factor in helping the industry stay strong despite a myriad of potential problems.


The first potential snag that the lending market has seemingly overcome in 2017 is ongoing action by the Federal Reserve to raise interest rates that directly impact commercial real estate mortgages. Typically, interest rate hikes can discourage borrowers from taking loans or limit the amount of funds they choose to borrow.


According to Forbes, much of the potential issues have been offset by companies trending toward 5-7 year financing periods, allowing borrowers to refinance as their investment plays out. This flexibility is a strong incentive for borrowers to consider a commercial mortgage in spite of the increase in interest rates.


The National Association of Realtors also reported that large segment of 10-year commercial real estate mortgages, taken out between 2005-2007, were scheduled for refinancing between 2015-2017. Many experts suspected that this wave of refinanced loans would be detrimental to new loan growth this year. On the contrary, the number of transactions that have failed during the refinancing process have decreased over the past few years rather than spike. This unexpected stability has clearly been a major contributor to the strength of the lending market in 2017.

A Strong Commercial Lending Market Could Propel Your Business

More flexible lending conditions across the industry have undoubtedly played a role in sustaining a healthy lending market. Likewise, greater availability of short-term commercial loans have encouraged businesses to pursue new business opportunities. Any company that can leverage access to rapid capital or have long-term financial goals can directly benefit from market conditions in 2017.

Find out what you’ll need to take advantage of commercial lending opportunities

Want to make the most of the healthy lending market? You’ll be in a strong position to maximize a commercial mortgage by working with an experienced professional. By taking advantage of their expertise, your company stands to deploy a practical financial strategy in 2017 with the promise of a high ROI. Don’t miss out on this chance to pursue your company’s most ambitious business goals this year.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
clip_image002clip_image004clip_image006clip_image008

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending.commercial mortgage

Understanding Commercial Lending Repayment Terms and Schedules

Commercial lending is similar to personal lending in some aspects but not all of them. In most cases the terms and repayment schedule for a commercial loan are very different than that of a personal loan.

Most consumers are familiar with a typical personal mortgage loan and the terms of 15 or 30 years. With this type of loan you make regular payments which are amortized. But commercial loans are available in two different formats. The first is an intermediate term loan and it covers a span of three years or less. The second is a long term loan and those will span five to twenty years. In addition, there can be a balloon loan which has a final payment that is the balance of the loan at that time.

The balloon loan is the type that requires some careful consideration and planning for a business owner. This can be a good solution if you know that your business will have a much larger income in a few years or if you are expecting to sell shares of the company to raise capital to pay off the mortgage. The term is typically five to seven years and then the final payment comes due. In most cases, this payment is a very substantial amount. Over the course of the loan the payments have been manageable but they have not reduced the loan amount a great deal. Hopefully you have been setting aside money to make the final payment on your commercial mortgage but if you have not then you are going to need to refinance the balance of the loan.

Refinancing the balance to a long term amortized loan could be an option, but you will need to be sure that your business is financially stable and can qualify for the new mortgage. In most cases, a company that has been in operation for five to seven years has enough credit established to qualify for a mortgage loan, but if not then you will need to submit personal financial documents from the business owners to secure the loan. Also, the equity that you have in the property should help your business to secure the funding needed to pay off the original balloon payment.

Understand the Full Interest Rate

Often times a commercial loan will have the interest rate listed and then also points will be listed. That is in essence the same as interest but it is paid immediately. So be sure to add up both of those items to know the true rate that you are paying for the money that you are borrowing. You can also help to reduce the interest rate that you are paying by making as large a down payment as possible. The larger the down payment the more equity there will be in the property and that means less risk for the lender so they offer a better interest rate.

Know What You Can Afford and Final Terms That Benefit Your Needs

There are many different types of commercial lending available and you need to be diligent in learning as much as you can about the loans and their different benefits. Repayment schedules can vary greatly and what seems like a reasonable monthly payment can leave you scrambling to meet a balloon payment that could end up in a foreclosure. Make a smart selection to ensure that your business remains financially stable.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

clip_image002clip_image004clip_image006clip_image008

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending.commercial mortgage

4 Problems Your Business Can Solve With A Commercial Loan

Sometimes your business needs quick cash to solve a major problem.

A strategic commercial loan can fill the gap, allowing your business to remain flexible with its capital.

Whether your company has recently chosen to make a commercial real estate investment or is just in need of rapid access to capital, a business loan is a flexible solution to a long list of problems. Understanding the type of hurdles a commercial loan could help your business overcome is the first step toward knowing if this is a sound financial move for the immediate future.
The following pain points are just a few examples of issues that can rapidly be addressed with a loan:


1. Missing Equipment And Lost Personnel - Accidents happen. Equipment breaks down. Key employees quit abruptly. All of these events can cripple your business’ momentum and hit your bottom line out of nowhere. A smart business loan can be used to repair a facility, replace much needed talent or purchase necessary equipment upgrades. Addressing such issues immediately with a business loan prevents your company from facing the long-term consequences of unexpected losses.


2. Need For A Flexible Line Of Credit: Whether your business is looking to spend while protecting its existing capital or needs to build credit for the future, business loans can be used as a versatile means of turning financial strategies into a reality. By negotiating terms that are favorable in immediate future, your business can maximize the effectiveness of a business loan.


3. Capital For Short-Term Investments - Business leaders know that there are many times when flexible capital is necessary to take advantage of a short-term investment. When the ROI is more than likely to pay back the amount of the loan, borrowing the amount is a helpful solution to have on hand when the perfect opportunity comes knocking.


4. Limiting Physical Space - Available square footage has a huge influence on the success of your business. In corporate offices, modern amenities and generous work spaces can make employees more loyal and productive. On the other hand, a stifling, poorly equipped office can stifle creativity and morale. Similarly, lack of space in a retail or service industry space make it harder to attract repeat business. A business loan can make it possible for your business to quickly absorb new operating space


How Do I Find Out More About Commercial Loans For My Business?

Doing your homework is a necessary part of any major business decision. The choice to take out a loan is no different. That’s why it makes sense to spend time learning as much as you can about the common terms and conditions that go along with a business loan. Your company wants to know what to expect in the long-term.

Don’t make a decision without consulting an experienced commercial lending professional

Want to know more about the right type of commercial loans to meet the needs of your business? Get in touch with an experienced lender to get a clearer picture of what financing for your next expansion, development or strategic investment might look like. The quicker you take advantage of all the benefits a smartly timed business loan provides, the sooner you can see these perks play out for your business.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

clip_image002clip_image004clip_image006clip_image008

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.


Wednesday, August 16, 2017

Deutsche Bank Gets Their Butts Nailed for $95 Million ……Is that a lot of Money?


The state of Maryland has reached a $95 million settlement with Deutsche Bank over claims of deception with their sale of residential mortgage-backed securities. Maryland Attorney General Brian Frosh announced the agreement earlier this month that includes a requirement that Deutsche Bank provides $80 million in relief to the state’s consumers. Municipal and local governments also stand to benefit from the deal as the agreement stipulates $15 million of the $95 million restitution going towards public investments.

Deutsche Bank is accused of providing misleading information to investors regarding securitization and collateralized debt offerings. All of the alleged turmoil ensued before the nation's financial crisis that occurred nearly a decade ago. The Department of Justice accused Deutsche Bank of knowingly making false or misleading representations when soliciting to investors. Such fraud centered around the nature of mortgage loans that were issued between 2006 and 2007. The advances totaled in the billions and included private buyers as well as corporations, along with public entities such as city and county governments.

Deutsche Bank acknowledged its failure to provide investors with complete and accurate information, and thus agreed to a settlement that included relief to homeowners currently underwater because of the financial institution’s carelessness. The Department of Justice has mandated around $4.1 billion in aid going to such borrowers, with an $80 million portion of the most recent agreement set aside for consumers, accounting for some of the funding.

Mortgage forgiveness and forbearance are two of many ways that Deutsche Bank plans to make good with the public on the $95 million settlement. The financial institution also plans to implement low to moderate income lending along with affordable housing practices. Investing in the community as a whole will be another way that Deutsche Bank makes amends for its wrongdoing. The corporation has plans to contribute to housing stabilization for various cities and, as a result, help shore up the state of Maryland's economy.

It seems that Deutsche Bank has had to answer up in recent months for some deceptive practices. The financial institution settled a federal mortgage probe in December 2016 in which it was ordered to pay a civil penalty totaling $3.1 billion. The final price tag for the investigation was $7.2 billion, which was a reduction from the initial $14 billion that the government initially proposed. The $4.1 billion relief expense imposed by the Department of Justice resulted from this probe and may have contributed to Deutsche Bank’s legal costs, which accounted for $2 billion in losses on the financial institution’s fourth quarter report.

Deutsche Bank was also found liable in a silver manipulation lawsuit in October 2016, and ordered to pay $38 million in damages. The financial institution is accused of employing manipulative device claims along with a myriad of other offenses that it was unable to refute effectively. The original class action lawsuit for this matter was filed in July 2014 and included other banks, which subsequently cleared their names and avoided substantial penalties over the alleged deceptive practices.

The most recent settlement between Deutsche Bank and the state of Maryland adds to the company’s total in legal bills and overall liabilities.

Only time will tell if more cases concerning Deutsche Bank result in losses, placing, even more pressure on the Frankfurt-based financial services company to revamp their policies.

Posted By Amy Martinez | Geraci Law Firm

Dennis Notes:

I remember my first real estate class with Skip at Westford Collage of Real Estate years ago, and one of the first things he said was 'full disclosure'. Never hide information about the deal. Today I'm the mortgage business (private hard money), I remember this comment. But I'm always surprised when I talk to borrowers who try to 'hide pertinent facts' about the deal. It's a feeling that what you don't know is none of our business. I partially get concerned when I ask borrowers questions, and three is a reluctance in telling the true story about the deal. when I look at those trouble loans that went off the deep end, there always was some shenanigans occurring by the borrower. Not telling the true story and hiding information about the transaction only to be discovered when the deal goes to foreclosure. Of course you know when the deal goes off the tracks, the borrower always wants to blame someone else, like the mortgage company or you the sales agent. My recommendation is to avoid these sketchy individuals that are trying to do some sneaky transactions. Usually my instincts tell me what's going on, but sometimes they slip thru and cause problems. So beware, always disclose and hopefully your client will fully disclosed to you also.



Happy senior business man making his notes at workDennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC 
Private Hard Money Lender

Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

 You TubeFace Book Active Rain Linked In 

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years. 

Wednesday, August 9, 2017

BofA Gets Nailed with a $45 Million Penalty……Wow!


After years of trying to help home owners it was nice to see that finally the borrower was vindicated in the modification requests. Following is an accounting of Bank of America recent attempt with the modification process.


By Jenny Park | Geraci Law Firm

A California bankruptcy judge handed down a $45 million penalty against Bank of America Corp. (“BofA” or “Bank of America”), decrying the manner in which the bank treated a California couple who attempted to save their property from foreclosure.

Judge Christopher Klein, a federal bankruptcy judge for the United States bankruptcy court, Eastern District, stated the financial institution’s mortgage modification protocol and errant foreclosure on Erik and Renee Sundquist's home rendered them emotionally distressed. The case sheds light on how the mortgage industry’s inadequate loan servicing transactions negatively affect some borrowers. Judge Klein referenced internal procedural failures, claiming that Bank of America had scant incentive to change the loan terms in such a way that would preclude the 6% interest rate the bank was collecting from the Sundquists' loan.

The couple’s problems started in 2008 when the couple’s construction firm went out of business because of the economic collapse, and they purchased a less expensive house outside of Sacramento. They borrowed approximately $590,000 from a financial firm, later acquired by Bank of America, with promises from a loan officer that they could request a reduction in their monthly payments.

The couple ceased making payments in March 2009 following Bank of America’s refusal to consider modifying loan terms for customers who were current on their payment schedules. According to the court’s ruling, the Sundquists’ “sole reason for defaulting was acquiescence in Bank of America’s demand that they default as a precondition for loan modification discussions with Bank of America.” Over the course of the next few years, the plaintiffs submitted around twenty separate requests to modify their loan terms, which Bank of America either lost, deemed inadequate, or denied without explanation all the while repeatedly scheduling foreclosures.

The Sundquists filed for bankruptcy in June 2010. Doing so precluded a foreclosure sale on their property because of the automatic stay, but Judge Klein’s ruling claimed the bank, while knowing of the bankruptcy, unjustly reclaimed the home and issued the couple a three-day eviction deadline. According to the ruling, Bank of America even “staked out the premises, tailed the Sundquists, knocked on doors, knocked on windows, and rang doorbells, all to the terror of the Sundquist family." Eventually, the couple vacated the property, and Ms. Sundquist subsequently suffered stress-related heart attack symptoms that required hospitalization.

Bank of America representatives eventually reversed the sale and transferred title back into the Sundquists’ name without notifying the Sundquists or their attorney of the change. The couple eventually moved back in after several months only to discover that they were charged $20,000 during their absence by the homeowner association for neglected landscaping and maintenance.

Judge Klein’s 107-page ruling incorporated entries from Renee Sundquist’s personal journal that highlighted harassing encounters with Bank of America loan officers, and Mr. Sundquist’s suicide attempt following the couple’s frustrated discussion regarding their mortgage issues. Judge Klein awarded the Sundquists nearly $1.1 million, verified the remaining amount they owe on their loan, and fined Bank of America $45 million.

The $45 million penalty, which will be dispersed via grants to law schools and consumer advocacy groups, is intended to be substantial enough that it will deter future misconduct on behalf of Bank of America. Rick Simon, a spokesperson for Bank of America, claimed the Sundquists' issues originated before the implementation of the new loan procedures and criticized Judge Klien’s ruling for being unsubstantiated and breaking established precedent. Mr. Simon refused to comment when asked if Bank of America will seek an appeal.

However, in April, Bank of America filed papers requesting Judge Klein to reconsider his $45 million fine calling the amount “unprecedented in its magnitude.” In court papers, bank officials asked Judge Klein to amend his 107-page ruling against the bank, arguing that his “excessive” fine amount violates guidance from Supreme Court justices in 2008 meant to prevent outsized awards. The fine stands as the largest punitive damages award for violations of bankruptcy law’s automatic stay rules.

Dennis Notes:

When we were doing loan modifications, "losing paper" was a common problem when we worked with borrowers. It was an persistent and constant problem. But, I would say in BofA favor, it probably was not a deliberate attempt to stop the modification, when you look back at the tremendous volume of paper work that was required for a modification, and the number of people requesting modifications it was easy to get the documents lost. We developed specific procedures to submit the application and eventually solved the paper work problem. Another problem with paper work, was it became out of date after 30 days and had to be resubmitted (that's the story they told us). In the beginning BofA underestimated the amount of staff that was required for modifications, and the long process of modifications.

The second point, of BofA following the customer, as motioned above, is hard to understand. I've never encountered this situation directly from any bank/servicer. During this time there was an army of fix/flippers that wanted to purchase homes, and this is probably the people who were knocking on the windows and doors and following the borrowers. I did have one situation, where the servicer went in and physically took control of the properly by changing the locks and posting on the door. When we objected to this practice, the servicer referred us to the Promissory Note, which stated that the borrower gave the authority to do so. Which they borrower did.

The good part of all of this is that this horrible situation is over. At one time I counted over 1,000+ homes being sold at the court room steps in ONE DAY. Fortunately, now this has dropped to just a few per day. I do understand the pressure the borrowers had on them during this process, and personally I have experienced clients losing their savings, ending their life. It's good that this bad time is behind us and things are improving. I just wish I had all of my teeth that I cracked and ground down dealing with the modification process. Overall during this time we were successful in obtaining about 10% of the modifications. Of those only about 2% still own their homes today.


Happy senior business man making his notes at workDennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC 
Private Hard Money Lender

Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

 You TubeFace Book Active Rain Linked In 

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years. 

BofA Gets Nailed with a $45 Million Penalty……Wow!


After years of trying to help home owners it was nice to see that finally the borrower was vindicated in the modification requests. Following is an accounting of Bank of America recent attempt with the modification process.


By Jenny Park | Geraci Law Firm

A California bankruptcy judge handed down a $45 million penalty against Bank of America Corp. (“BofA” or “Bank of America”), decrying the manner in which the bank treated a California couple who attempted to save their property from foreclosure.

Judge Christopher Klein, a federal bankruptcy judge for the United States bankruptcy court, Eastern District, stated the financial institution’s mortgage modification protocol and errant foreclosure on Erik and Renee Sundquist's home rendered them emotionally distressed. The case sheds light on how the mortgage industry’s inadequate loan servicing transactions negatively affect some borrowers. Judge Klein referenced internal procedural failures, claiming that Bank of America had scant incentive to change the loan terms in such a way that would preclude the 6% interest rate the bank was collecting from the Sundquists' loan.

The couple’s problems started in 2008 when the couple’s construction firm went out of business because of the economic collapse, and they purchased a less expensive house outside of Sacramento. They borrowed approximately $590,000 from a financial firm, later acquired by Bank of America, with promises from a loan officer that they could request a reduction in their monthly payments.

The couple ceased making payments in March 2009 following Bank of America’s refusal to consider modifying loan terms for customers who were current on their payment schedules. According to the court’s ruling, the Sundquists’ “sole reason for defaulting was acquiescence in Bank of America’s demand that they default as a precondition for loan modification discussions with Bank of America.” Over the course of the next few years, the plaintiffs submitted around twenty separate requests to modify their loan terms, which Bank of America either lost, deemed inadequate, or denied without explanation all the while repeatedly scheduling foreclosures.

The Sundquists filed for bankruptcy in June 2010. Doing so precluded a foreclosure sale on their property because of the automatic stay, but Judge Klein’s ruling claimed the bank, while knowing of the bankruptcy, unjustly reclaimed the home and issued the couple a three-day eviction deadline. According to the ruling, Bank of America even “staked out the premises, tailed the Sundquists, knocked on doors, knocked on windows, and rang doorbells, all to the terror of the Sundquist family." Eventually, the couple vacated the property, and Ms. Sundquist subsequently suffered stress-related heart attack symptoms that required hospitalization.

Bank of America representatives eventually reversed the sale and transferred title back into the Sundquists’ name without notifying the Sundquists or their attorney of the change. The couple eventually moved back in after several months only to discover that they were charged $20,000 during their absence by the homeowner association for neglected landscaping and maintenance.

Judge Klein’s 107-page ruling incorporated entries from Renee Sundquist’s personal journal that highlighted harassing encounters with Bank of America loan officers, and Mr. Sundquist’s suicide attempt following the couple’s frustrated discussion regarding their mortgage issues. Judge Klein awarded the Sundquists nearly $1.1 million, verified the remaining amount they owe on their loan, and fined Bank of America $45 million.

The $45 million penalty, which will be dispersed via grants to law schools and consumer advocacy groups, is intended to be substantial enough that it will deter future misconduct on behalf of Bank of America. Rick Simon, a spokesperson for Bank of America, claimed the Sundquists' issues originated before the implementation of the new loan procedures and criticized Judge Klien’s ruling for being unsubstantiated and breaking established precedent. Mr. Simon refused to comment when asked if Bank of America will seek an appeal.

However, in April, Bank of America filed papers requesting Judge Klein to reconsider his $45 million fine calling the amount “unprecedented in its magnitude.” In court papers, bank officials asked Judge Klein to amend his 107-page ruling against the bank, arguing that his “excessive” fine amount violates guidance from Supreme Court justices in 2008 meant to prevent outsized awards. The fine stands as the largest punitive damages award for violations of bankruptcy law’s automatic stay rules.

Dennis Notes:

When we were doing loan modifications, "losing paper" was a common problem when we worked with borrowers. It was an persistent and constant problem. But, I would say in BofA favor, it probably was not a deliberate attempt to stop the modification, when you look back at the tremendous volume of paper work that was required for a modification, and the number of people requesting modifications it was easy to get the documents lost. We developed specific procedures to submit the application and eventually solved the paper work problem. Another problem with paper work, was it became out of date after 30 days and had to be resubmitted (that's the story they told us). In the beginning BofA underestimated the amount of staff that was required for modifications, and the long process of modifications.

The second point, of BofA following the customer, as motioned above, is hard to understand. I've never encountered this situation directly from any bank/servicer. During this time there was an army of fix/flippers that wanted to purchase homes, and this is probably the people who were knocking on the windows and doors and following the borrowers. I did have one situation, where the servicer went in and physically took control of the properly by changing the locks and posting on the door. When we objected to this practice, the servicer referred us to the Promissory Note, which stated that the borrower gave the authority to do so. Which they borrower did.

The good part of all of this is that this horrible situation is over. At one time I counted over 1,000+ homes being sold at the court room steps in ONE DAY. Fortunately, now this has dropped to just a few per day. I do understand the pressure the borrowers had on them during this process, and personally I have experienced clients losing their savings, ending their life. It's good that this bad time is behind us and things are improving. I just wish I had all of my teeth that I cracked and ground down dealing with the modification process. Overall during this time we were successful in obtaining about 10% of the modifications. Of those only about 2% still own their homes today.


Happy senior business man making his notes at workDennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC 
Private Hard Money Lender

Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.