This is a warning to all brokers and principals out there contemplating using this bogus company called Commercial Equity Management (CEM). This scheme is orchestrated by a "man" named John Keenan. He operates a virtual office out of the 5/3 Center in Cleveland but really just works from home. This guy will claim he runs a hedge fund but is really just a broker, if that. More like a used car salesman. So here's the scam.
They tout their abilities to fund your project. He'll claim that he only funds twice a year and can do 125% on raw land. 100% LTV/LTC projects are "No Problem!" Puts out a bogus term sheet or LOI and asks for $18K up front. This supposedly covers an appraisal and "Legal Fees" that CEM incurs. They never actually do an appraisal and tell you that the $6500 of those fees are non-refundable.in fact, to make the scheme more "legit", Mr. John Keenan will actually go out and visit your clients on his dime in an effort to more easily extract the $18K.
After client puts up the $18K, you'll be passed along to a so called "Account Executive". He's got a couple of cronies working with him, one of which is named James Reese. Again, nothing more than a broker. You'll be strung along for a couple of months and they'll finally say the appraisal was done and spit out some figure. When you ask to see the appraisal, they say they can't release that information. After a couple weeks of that nonsense, they'll tell you it's in underwriting. Meanwhile, they're frantically shopping your deal everywhere to find a lender for it or to simply steal it from you. A few more weeks go by and you'll get a Statement of Denial for your loan. This denial letter is a "Cut and Paste" job from various denial letters you can find off of other mortgage or financial websites around the web.
If you click on the "About Us" page, you'll see claims of deals they've funded. Again, it's a "cut and paste" job from a legitimate company that actually did the financing. Just google one of their claims and you'll see what I mean. Also, there is pending litigation against them for fraud.
Again, fair warning... Do not go near these scumbags!
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