FAQ for Borrowers
A private lender is essentially an individual, broker and/or originator of loans funded with private money to people who are having difficulty obtaining a traditional bank loan. Private money lenders can work faster and are an alternative for borrowers who may not qualify for a loan. MOR Financial only brokers loans secured by real property.
Currently, we only lend in California.
Our process is easy and transparent for the borrower. Most borrowers call in to MOR and establish a relationship with an account executive. The Account Executive will guide you through all of the steps needed from inception to completion of the process. We also provide an option to submit a loan scenario through our website. One may also send an email to [email protected], or give us a call at (213) 784-0737.
MOR Financial offers a wide range of loan programs for residential fix-and-flips and commercial acquisitions. We also have experience with funding multifamily, retail, and medical buildings as well. Loan programs offered are specific to the deal, please call in for specific pricing.
MOR Financial handles all aspects of the deal from origination through servicing.
Your note will stay in-house, and will not be sold off to outside servicers. We
originate, fund, and service all of our loans. Because of that, we make ourselves
available to our borrowers to assist in anyway that we are able.
Borrowers will have an Account Executive at MOR that will work with them throughout the lifetime of their career to provide them with competitive capital and help them acquire properties with creative solutions.
Unlike other private lenders, MOR will walk through deals with you and tell you when we do not see potential in a deal. We want our borrowers to be successful. Our account executive will provide training to our clients to help them identify deals more efficiently. We are vested in our borrowers success!
Loan scenarios are typically pre-approved within 24 hours. Conditional approval letters are also available.
Your credit score is a contributing factor, but we mainly rely on the value of the property and plan for the property during the loan term. When evaluating a transaction, MOR Financial evaluates numerous factors in order to balance out the risk of a transaction. Ultimately, we are an asset-based lender. If the property has equity or significant potential, we can provide a solution.
Upon approval, MOR Financial can fund a loan in as little as 48 hours. Our usual submission process is about 7-10 business days.
MOR Financial usually offers loan terms for 12-36 months with rates between 7.99% and 11.99% for most loans.
Once we have a recent application and credit report on file, we can expedite the loan submission process. However, we will still need the core property specific documents for each transaction. These are simple items. (Fully executed purchase contract, Title and Escrow info, Preliminary Title Report) If additional documents are needed throughout the submission process, your account executive will let you know quickly in order to keep the process moving.
Typically no, MOR Financial only offers loans on non-owner occupied, business- purpose properties. There are certain exceptions in which a borrower may pull cash out of their primary residence for business purposes. It is best to call in and speak to an Account Executive to see if you qualify.
Yes, MOR Financial requires an appraisal on all new loan submissions to be conducted by a licensed third-party Appraiser. We have resources all over the state and can schedule an appraisal within 48-72 hours. Appraisal may be waived in certain instances where the LTV is very low.
The more information you can provide us on your respective transaction, the better we will be able to understand the overall picture of your deal. We typically require recent bank statements, government-issued Identification, social security card, and a line item rehab estimate (if you are requesting a fix-and-flip loan).
Before the close of escrow, you will be given an estimate of costs. That estimate may include the first month’s interest to cover the next month. However, you may be funding into the month, where you will owe a payment on the subsequent 1st of the month. Typically, borrowers have this money set aside to absorb the cost of capital. In some instances, there may be so much upward potential on your respective transaction, that the points and fees can be built into the loan.
MOR Financial accepts personal/business checks, cashiers checks, money orders, bank wire, or you can have an ACH (automated clearing house) payment authorized to be deducted from your account. We do not accept cash payments in order to be in compliance with anti-money laundering laws.
For loans that are structured on the “After-Repair Value” of a property, MOR Financial is mandated by the California Department of Real Estate to hold those rehabilitation funds in a trust account. To access those funds, a request must be sent to our servicing department who will then schedule a site inspection from a third-party inspector. Upon the review of that inspection report, the servicing department will disperse funds equal to the percentage of work completed.
We completely understand if projects do not go as planned. We are willing to work with our borrowers to find solutions to keep your project and business moving forward. As long as property taxes and insurances are current, and no new derogatories have appeared in regards to the borrower or the subject property, we can typically offer extensions or refinance options to our borrowers.
Request a formal payoff demand from the servicing department with the estimated date of closing. Our servicing department can usually have that prepared in 48-72 hours.
There is no penalty for paying off your loan before time of maturity. We want our borrowers to be encouraged to move through each transaction as quickly and efficiently as possible.
FAQ for Investors
MOR Financial has over 10 years of experience in brokering private mortgages. We pride ourselves on our highly sought after TDO’s (Trust Deed Offerings). Our notes are in high demand because of our rigorous underwriting which has led to one of the lowest foreclosure rates in the industry (less than 1%). Capital preservation is our primary goal for our investors, and our business model of creating our own ecosystem from loan application to payoff, allows us to monitor each transaction throughout its lifecycle and consider additional data points when evaluating risk.
Our in-house Investor Relations Account Executive handle each and every TDO that comes your way. Our Account Executives will determine your risk tolerances and your funding limits throughout a series of conversations. Once our Account Executives have identified the right TDOs for you, they will be packaged up and discussed with you in an easy to digest format. Should you choose to fund the TDO presented to you, your Account Executive will provide you with funding instructions to wire title. The account Executive will handle all aspects of your paperwork, (Vesting, Title Insurance, Promissory Note, Deed of Trust, State Required Documents). We encourage all investors to conduct their own due diligence and welcome questions about transactions.
As California Real Estate continues to increase in value, so does the demand on its financing. Our average loan size is about $485,000. We can accept as little as $20,000 to place your funds on a loan. MOR Financial also has additional products with a minimum investment amount of $10,000.
All loans are written on a promissory note secured by a deed of trust. That deed of trust is recorded with the county clerk with your name as the beneficiary. We also require borrowers to pay for a title insurance policy that covers 125% of the loan amount, and hazard insurance that is approved by our underwriting department.
Our servicing department collects all borrower payments and disperses them to investors monthly. Payments are considered late when received after the 10th of the month. Investor payments are usually dispersed by the 15th of every month or 2-3 business days upon receiving funds.
MOR Financial considers a number of factors depending on the borrowers plan for the property. With commercial properties we typically do not exceed 60% of the as-is value. When appropriate, we require a phase 1, we evaluate the borrowers intended plans for the property (buy and hold, seasoning with tenants for a conventional take out, additions/renovations, etc). For residential properties, we can get a lot more creative with balancing out the risk, we look at the as-is value, after repaired value when applicable, renovations, budgets, location, comps, exit options, and more. We rely on the professional opinion of third-party appraisers as well as recent sales/comps of similar properties in the vicinity of the subject property.
1st and 2nd position loans are in reference to senior and junior liens on a property. A 1st position lien will be first in line to get paid, the 2nd will be paid once the first is made whole, and so forth for other junior liens. MOR Financial does not write liens that are Junior to another hard money lender or private lender. In very few instances, we will take a 2nd position behind a low LTV conventional mortgage as long as we can mitigate the risk. Talk to your Account Executive about the various risks and advantages of going into junior position liens.
The return rates on trust deeds consistently outperform traditional investment instruments. All loans are secured with a promissory note secured by a deed of trust recorded with the county with your name as the beneficiary. MOR Financial has been originating and funding loans for over 10 years with an exceptional track record and with one of the lowest foreclosure rates in the industry. We keep all the loans in house with our servicing department. Our investors are treated like partners and we offer full transparency with our business practices. We have loans that cater to the risk tolerance of every investor.
There are risks in every investment but MOR Financial takes every possible effort to mitigate those risks. However, if the borrower fails to honor the terms of the loan, MOR Financial is more than qualified and staffed to deal with them. MOR Financial can facilitate notices to the borrower, filing notices of default and sale with the respective county. If a property is put for sale at auction and it reverts to the beneficiary, MOR Financial can assist the investor by providing options to protect the investment.
There are instances where the borrower’s business plan does not go as intended. In these cases, MOR Financial is fully capable of facilitating notices of default and sale with the borrower and county, as well as providing the investor with options if the property reverts back to them. However, MOR Financial goes to great lengths to mitigate the NOD process. We want to affirm that we are not a financial institution that “loans to own.” We have underwriting guidelines that ensure our default rates are among the best in the industry.
Yes, you are welcome to use a self-directed IRA to fund loans.
Once a request for the payoff is received by the servicing department, you will be notified and you can make the proper determinations to either roll those funds into another loan or receive the entire payoff.
There are a number of factors to consider when choosing between individual trust deeds or a mortgage fund. Although individual trust deeds offer the investor more control over the investment and the ability to cater to their own risk tolerances, mortgage funds consistently keep your money working 365 days a year, earning returns on your investment that are spread across an entire portfolio. Please call our Account Executive to discuss the pros and cons of each choice as it pertains to your specific investment goals.
MOR Financial is fully licensed, compliant, insured, and staffed to handle any type of mortgage loan servicing. We are fully capable to follow the lender instructions as well as government regulations.
Regardless of the term of the loan or the number of lenders on the transaction, MOR Financial is fully capable to collect borrower payments and disperse those funds. We also mail out statements, notify borrower of late-payments, maturity dates, lapses in hazard insurance, and status of property taxes. MOR Financial is also capable in facilitating and notices of default and sale with the respective county to ensure the lender’s investment is protected and that the lender’s instructions are enforced.
MOR Financial takes great effort to remain in compliance with all government and regulatory bodies. For borrowers that hold vesting as an individual, we ensure that they receive the end of year tax forms.
Yes, MOR Financial undergoes the necessary trust accounting compliance with the California Department of Real Estate. Furthermore, we have taken great efforts to use independent third-party CPA’s and accountants to audit our records.