History

With the mortgage industry collapsing in 2008, we saw an opportunity to help borrowers as private lenders. Before the 2008 crash, John had been arranging traditional home loans for home buyers in new developments. As a result of new home construction coming to a halt in 2008, builders approached John to purchase private loans and earn interest to keep their revenue flowing. As it became clear that the 2008 collapse would freeze lending, John began the private lending operation, which was successful in those years due to many borrowers facing hardship and needing alternative lending sources. During the late 2000s recession, we helped many homeowners, business owners, and real estate investors avoid foreclosure. We were able to help bring defaulted loans current and help people prevent foreclosure using our private loan sources.

In 2010, traditional home lending was becoming available again. However, it wasn’t available the way it had been a few years earlier. Instead, many loans were government-backed and/or insured. We brokered many government-backed and/or insured programs to refinance our private money borrowers back into more affordable loans. With government programs like the Home Affordable Refinance Program, aka HARP, we helped borrowers obtain lower rates without the traditional equity required. Helping our borrowers obtain these loan programs was an excellent way for overextended homeowners still making payments to obtain lower rates. We also used other FHA and USDA-insured loans to help borrowers with lower credit refinance out of our private loans and get longer-term loans with lower payments until their credit was eligible for conventional loans. Eventually, by 2012, private mortgage insurance companies came off the sidelines and started insuring low down payment purchases and refinance loans again. We were able to help many of our homeowner clients refinance out of government-insured loans into low-cost traditional conventional mortgages. Many of our clients could then move up or purchase second homes and investment properties due to the savings, stabilized home values, and anticipated appreciation.

Also, in 2012, Alt-A loans reemerged under the new Dodd-Frank guidelines known as non-QM loans. At first, in 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act put a freeze on Alt-A lending, and purchasing a home as a self-employed borrower was next to impossible. But by the end of 2012, residential mortgage investors had eventually navigated the Dodd-Frank Act and developed programs for self-employed borrowers. We were at the front of that trend because many of our small business owner clients and real estate investor clients needed an alternative to private loans for home purchases. Many self-employed borrowers couldn’t qualify to meet traditional mortgage requirements and couldn’t afford to keep paying private money rates. We could now provide many 30-year term options at much lower rates than the private loans they were in.

The tide turned for commercial borrowers as well in 2012. Their commercial building rents increased after the worst part of the recession had passed, and many commercial owners had a few years to recover financially. We shopped many of our client's loans for longer-term permanent loans to pay off our private or high-interest loans from other lenders. We brokered many loans to small banks, REITs and life insurance companies across California that were finally motivated to increase their risk tolerance. Commercial lenders also started offering Alt-A loans again. There was now a middle ground between traditional banks and private money for commercial property, thanks to REITs and Wall Street Conduit lenders increasing risk tolerance. This increase in risk tolerance helped us originate loans for commercial borrowers whose loans didn’t fit traditional banks. As a result, the emerging real estate investor was back in business again.