Watch out for upfront/Advance fees
No Upfront fees: What is the importance?
Fairview never charges upfront fees to any borrower. I’m commonly asked: What does it mean that Fairview does not charge upfront fees? The financial dictionary states an upfront fee is: “A fee paid before a good is produced or a service is performed. The upfront fee is generally a portion of the total fee that the buyer must pay. “ These are also referred to as “advance fees” In regards to lending, an upfront fee is a commonly used term by some lenders as a payment for due diligence, underwriting, etc… This is paid prior to the lender doing due diligence, underwriting etc.. on a transaction. Fortunately Fairview underwrites each transaction in house and so we don’t need any money to perform due diligence on the deal and issue a loan commitment. My one piece of advice is to run the other direction if you as a borrower are asked to pay an upfront fee. I’ve been preaching this for many years.
Many lenders still require upfront fees /advance fees from their borrowers before even issuing a loan commitment. Fortunately Fairview never charges and upfront fee and never charges advance fees. Below is an article about another lender “Remington financial) that charges upfront fees to its borrowers. “In the latest court filings, prosecutors allege that Remington induced more than 1,900 victims to each pay at least $10,000, or a total of $25 million, to get commercial financing for development projects. It found financing for just one client, they said.” “It’s unlikely they will get any of their money back.” (Entire article: http://www.azcentral.com/business/consumer/articles/20130426officials-scottsdale-scheme-suspect-rejailed.html?nclick_check=1 ) Don’t get suckered into the advance fee/ upfront fee scam. Go with a real lender like Fairview that doesn’t need a dime to review a loan. Fairview lets the borrower know quickly yes or no on their transaction.
By Glen Weinberg
COO/Partner Fairview Commercial Lending