Hi, i am going to sign a commercial loan contract approval, any advice is helpful?

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I have been quoted a rate by a commercial finance consultant company and they are asking for $ 2500.00 deposit to get the loan started. They say it is partially refundable if loan doesent go through, I don’t have a lawyer, here is the fine print in the contract, if someone could read it and tell me what it means. This is governed by CA law since it is a company in California, also what can I do if I send the deposit and sign the contract with the clauses here and they do not decide to give me back my deposit? Thank you.

Borrower hereby retains Commercial Capital as the placer for the purpose of procuring a mortgage loan approval. Furthermore to obtain a new mortgage upon further investigation of equity, credit, income and title validation.
Commercial Capital acting as exclusive placement agent for borrower will conduct proper due diligence in accordance with ethical business standards to adequately find and place borrower(s) loan request with proper lender. Commercial Capital does not guarantee successful permanent placement of loan, this agreement is for the sole purpose of proper due diligence and best effort for borrower(s).
Borrower(s) agrees to fully comply with document requests relating to loan placement and due diligence needs list requirements for the best efforts to fund loan for borrower(s). Borrower(s) agree to respond with relating documents within 7 days of request to ensure proper streamlining of loan.
Any due diligence fee & packaging fee deposit given to Commercial Capital becomes the property of Commercial Capital wholly earned at the time of payment or collection.
Commercial Capital Promises to use its best efforts to find borrower(s) financing for borrower(s) property. Commercial Capital does not guarantee loan funding within any period of time specified because underwriting guidelines may change from time to time & borrower may not qualify due to loan to value, fico score, or liquidity, debt to income, debt service coverage ratio, or property does not debt service.
Rates fluctuate daily, terms and rates are only approximate until borrower(s) signs the letter of interest from lender and has submitted all the required paperwork and goes to underwriting for loan approval.
Final rate depends on credit worthiness, dept to income ratio, net operating income, and asset liquidity of borrower(s) & credit risk. Initial rate quote is subject to change by lender. Commercial Capital is not responsible for lender or investor changing rate and will not be held liable or responsible.
Borrower(s) agrees to cooperate fully and submit all requested due diligence information in a timely manner, within 7 days in order to submit to underwriting.
Disclaimer: Rates may change if borrower does not submit within timely fashion within 7 day period.
All submissions must be done electronically. Broker required to submit all due diligence documents electronically.
If referring broker does not send all required due diligence documents within 7 day period it could adversely affect rate which was originally quoted to borrower.
We are advocate of client to use best effort to find investors or lenders which fit into borrower’s request. Subject to underwriter to receive all due diligence material within 7 days otherwise PMD fee is not refundable partially or in full.
This PMD fee is not subject to a refund, an offset or a reimbursement and is deemed earned once received.

Say you buy a foreclosed home in bad condition listed at say $ 20,000. Can you get a mortgage for say $ 45,000 dollars to cover mold removal, rewiring, just general improvements? I’ve tried to find information on-line and someone suggested an FHA streamlined loan but after reading more about the streamlined loan it doesn’t seem like that’s what a streamlined loan is really for.

3 Comments
  1. Reply
    raven_sunn
    January 27, 2011 at 7:41 am

    don’t do it. there are plenty of loan companies that will give you a better deal with out a down payment i use wells fargo and they have always been good to me and the interest is low. check it out before you end up in trouble

  2. Reply
    Leo F
    January 27, 2011 at 7:52 am

    No, you would have to pay cash or get a hard money lender at 14%-17% interest and then you would have to do each faze of the project and take a draw when completed. Conventional and FHA loans require the home to be in average condition. Lenders do not just give out $ 25,000 to anyone thinking they can redo a home. This home has some big issues.

  3. Reply
    Lisa S
    January 27, 2011 at 8:12 am

    Yes, they are called 203K loans. If you purchase a house for $ 100,000 and it needs $ 25,000 worth of work you can get the loan for $ 125,000. BUT, the house will need to appraise for $ 125,000, the appraiser will appraise the house at the “repaired” amount instead of the as-is amount. They take a little longer and you will need to have a couple of bids from contractors (I have never seen anyone get a loan based on doing the work themselves, but it may be possible)

    A lot of lenders don’t like doing them because of the added paperwork but check around, you’ll find one that will do it, make sure they have done them before.

    Good Luck!!

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