Watch out if you are solicited by Darrell Ellis to "invest" in this loan scam. Darrell is a slight, African American man, approximately 5' 6" tall, in his late 40s (but looks younger than that).
Darrell claims that he works with banks who feed him leads of people who do not qualify for conventional bank loans because of bad credit scores, etc, and these borrowers need cash for various reasons (to re-finance a house, purchase their first home, etc). He's very charming at the initial introduction and then is very aggressive when you commit to lending him the money and he's trying to get the money.
To guarantee the money that you loan to him, Darrell implies that he has the deed to the house, ready to be signed over to him, should the applicant not make good on his loan. At which time, Darrell would foreclose on the home, sell it and pay off the debt.
He'll draft a very "official looking" loan document for you to sign, but read the contract carefully... It is usually filled with typos (in his favor, or course), and it sounds very safe because the contract requires the borrower (Previa Financial) to pay all legal fees, etc.
The loans will vary in amount, and never with any backup documentation about the property being secured, etc. When you press him for details, he'll respond that he can't share private client information.
When the loan comes due, Darrell is an expert at ignoring phone calls and voice mail. If and when he does respond, it is usually with some excuse or another as to why he doesn't have the money such as:
Health - I've not been feeling well
Business - I've been out of town
Escrow company - The escrow company is still holding the money
Also, if and when he does issue a check, you can rest assured that it's not worth the paper it is written on. He's been known to bounce checks and then blame it on the bank.
He spends a fair amount of time in Las Vegas as well. Buyer beware - if the deal looks too good to be true, it probably is.
To date, he's taken more than $500K in cash from unsuspecting people who think that they are helping with hard money loans in return for a higher interest rate on the loan, or additional financial gain when the property is sold or foreclosed on. He supposedly is in the process of closing down his Ontario, CA office (which turns out to be a house that he was renting) and has moved his "office" to a P.O. Box in Glendale.
Watch out!
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