Jack Miller gives a little history of Hard Money lending (hard money loans or mortgages), Gelt has been helping commercial real estate and investment borrowers since 1989. When your bank says NO, we say YES!
“Hi, everyone! This is Jack Miller at Gelt Financial. I thought I would talk to everyone today about what is a hard money lender because we get calls with questions all the time. The first question is, “Are you a hard money lender?” I have to be honest; I’m not sure I know how to answer it, and I’m not sure there’s a great definition. But let me give you a little background, and maybe it’ll clear it up for you, and you make the determination if we are not. I think you’ll say we are.
When I first started the company in 1989 — it’s going back a long way — there was no such thing as hard money. No one ever heard of hard money. No one really even heard of subprime then. Subprime, that word didn’t exist. It was either conforming or non-conforming. Conforming consisted of Fannie Mae and Freddie Mac, then there was jumbo, which was considered non-conforming. Then there was government, which was FHA and VA. So I know I’m giving you a little history, but I just want to know. I don’t know. Give me a little history. So initially, Gelt Financial was started as what we would call a non-conforming lender. People used to get us confused with jumbo loans, but really, we were non-bank lenders, meaning we would do the same type of loans we’re doing now but loans that banks wouldn’t do. So they had to have some hair on them, or, you know, maybe there were credit problems, no income verifications, or the people didn’t want to wait for a bank. It takes a long time for a bank to approve a loan where we could approve a loan back then and today pretty much instantly and close very quickly. Then somewhere along the line, the word non-conforming went away, and the word subprime came into being. I don’t know when, but I’m guessing in the ’90s. And that was what was called the non-bank loans then. So, then we were a subprime lender, and we did that for 10 years — again, the same type of loans that we did before the word subprime, the same type of loans that we did after the word subprime. It’s basically, we’re doing non-bank commercial and real estate investment loans. Recently, and since the financial crisis of 2006 to 2011, subprime became a very, very dirty word. So if you use subprime, you were like a real bad guy. By the way, as a point of fact, the government won the subprime loans before. I don’t want to get into that. The whole subprime crisis was because of government intervention. They used to push lenders to lend money to people who couldn’t afford them. But that’s a whole another story, and I’m not going to go on a political tirade with you.
So subprime went away with the financial crisis of that 2006 to 2011 period became a very dirty word. So, we get calls, “Are we a hard money lender?” I don’t know how to answer the question. I’ll tell you some of the deals we do. We do deals at Gelt Financial that banks don’t do. Either they can’t verify their income, the credit’s not good, maybe they’re in bankruptcy, maybe they’re in foreclosure, maybe it’s a discount, no-purchase financing, maybe it’s a subordinate. We get all kinds of weird deals. We do recourse; we do non-recourse, all kinds of weird situations that banks don’t do. So I don’t know if you can call that hard money or not hard money. I can’t get a good different definition of it. I know I just actually Wikipedia’d it and got a definition, but I don’t know if that’s a great definition. But either way, I think you could say that, including many things we do at Gelt Financial; we would be considered hard money lenders. But again, everyone has a different definition.
We focus at Gelt Financial on helping borrowers who can’t or don’t want to go to banks, traditional lending sources for their commercial or investment real estate needs. Now, a lot of our borrowers, believe it or not, can go to a bank and are very creditworthy. They just don’t want. They either don’t have the time, or they don’t want to go to the bank for it. So that’s a short version of hard money lending, a little bit of history, maybe more than what you wanted, but what the heck. Anyway, call us anytime at 561-221-0900, ext. 238, or go to us on the website geltfinancial.com. And I hope you have a great day.”
Category: About Us
Tag: hard money
