Commercial Lending Capital misrepresents themselves as Lenders, but they are not Direct Lenders, nor do they have any Correspondent Relationships. They once had Correspondent Relationships with Interbay Funding and SilverHill, but those lenders are out of business. They are Brokers.
The term sheet below has a number of Red Flags. Once you sign it and wire the Advanced Deposit, you cannot cancel the agreement without owing them 3%, you cannot obtain a refund, or look for funding elsewhere. There is no guaranteed closing timeline, and they can deny the loan and keep your money for something as simple and you incorrectly stating the appraised value. You also give up your right to Discovery, and agree to Arbitration in Riverside, California.
They generate the following Term Sheet (complete with an amazing loan deal) and without proper financial due diligence, and then pressure you to sign it.
Months later you will still be trying to get your loan closed, and they will ignore your calls and emails. If you have the "unfortunate" priviledge of speaking with the COO Nicole Ferguson, you will regret it, this woman is a Whack-Job.
Term sheet details
Scope of Representation:
The undersigned, herein after referred to as "Borrower" hereby retains Commercial Lending Capital, Inc., herein after referred to as CLC,
as his commercial mortgage Broker or Lender. This agreement is for the limited purpose of procuring a loan approval and an eventual loan
under circumstances and conditions that will be determined by, and not limited to, further investigation of credit, equity, income and marketable
title validation.
Loan requested (herein "the Loan") is as defined in page one of this agreement. Duties of CLC:
CLC promises to use diligence in its efforts to procure the loan approval. CLC will act as agent for the Borrower and owes them such loyalty
including full disclosure, confidentiality, and honesty. However, CLC will represent the Borrower on a best efforts basis only, and does not
guarantee nor promise the successful placement of any loan as there is not adequate information known at the time of signing this agreement to make such guaranty.
Duties and Covenants of Borrower:
The Borrower agrees to comply with any legitimate request for information, documentation, or report fees (appraisal, credit environmental, etc.)
within a reasonable time, not to exceed fourteen working days. The Borrower further agrees to deliver marketable title, but not limited to, any
required subordination (s). The Borrower also agrees that he will not apply to any other funding resource during the period of this document's
coverage period. Once notification passes to the Borrower, via the contact information available, that his loan documents are ready for
signature, then Borrower agrees that the cancellation provision shall trigger upon the passage of five working days thereafter without
performance.
Cancellation-Specific Performance Obligations:
Cancellation due to non-performance by Borrower (s): CLC does not collect ample deposits to cover the cancellation fees rendered by third
parties, nor to compensate CLC for actual costs, profit, fees and expenses related to your loan request. Immediately upon execution of this
agreement the Borrower hereby agrees to pay Commercial Lending Capital Inc. (CLC) a fee equal to 3 % of the herein approved loan amount, without offset, indicated on page one (1) of this agreement to cancel this agreement for any reason prior to funding. The parties agree that this is a reasonable estimate of fair compensation for CLC in such circumstances. Any unused fees or lender deposits paid to date may be credited towards this cancellation fee at Lenders absolute discretion. It is agreed by all parties to this contract that this provision carries the
responsibility of specific contract performance and shall not be construed as liquidated damages in any form.
Misrepresentation: If a loan does not close or result from this agreement because of materially false or inaccurate information provided by the Borrower or his agents or non-performance of the Borrower regarding document production within the time frame allotted by this contract then that constitutes cancellation due to non-performance under this agreement.
Market Changes: If your loan does not close or result from this agreement because of a material change in the loan terms because of market
changes then no cancellation shall be due. CLC cannot forecast nor accept responsibility for these market conditions and thus all deposits or
fees paid by you will be credited towards the actual expenses borne by CLC or its affiliates and the remainder, if any, shall be refunded to you in due course.
Compensation:
All deposits or fees paid to CLC become the property of CLC and are wholly earned, limited by either the 3% cancellation fee or the actual
expenses borne by CLC (whichever is greater), at the time of payment without a cooling off or rescission period. Monies paid to CLC cover a
wide range of expenses and fees and cannot be accurately determined or disclosed in advance of loan closing as to how we may allocate them. CLC is entitled to other fees and income, to be determined, at such time that a commercial real estate loan funds and/or in the event that the cancellation or circumvention provision of this agreement triggers.
Non-Circumvention:
The Borrower agrees and covenants that he will not directly, or indirectly, in conjunction with any other person, company, partnership or
corporation, apply to the Lender (s), sources, or money funds to whom CLC has submitted his loan application for a period of 36 months.
Otherwise, the Borrower de facto owes CLC. An amount equal to the fees outlined in this agreement PLUS any Yield Spread Premium, Service Release Premium and any expenses encountered by CLC to process the loan to the point of cancellation. If you do not understand these terms or would like further explanation, please consult your Business Development Manager in advance of signing this document.
Third Party Services:
All properties are priced and evaluated individually. The closing cost deposit is collected by CLC as a deposit towards the third party fees, which
include an appraisal that CLC will purchase.in no case will CLC advance more than it has retained. These fees are credited to borrower upon
closing of the loan on the HUD-1 as a POC towards CLC fees, the appraisal and other closing costs. Variances in the upfront fees and the actual
costs shall be either debited or credited at closing. These fees are all at risk and are first credited to any cancellation fees and expenses. If the
Initial and Date %
We have reviewed preliminary information to render a specific scenario under specific circumstances. Final loan determination is made upon the successful completion of credit, value, title and income investigations. Clc inc. Reserves the right to directly speak to any and all parties involved in this transaction at any time. This pre-approval does not guaranty a rate lock until such time the appraisal process is completed. Closing dates are NOT promised nor estimated.
11870 Pierce Street, Suite 200, Riverside, Ca 92503
(951) 715-0084
Property value, economic performance factors, ratios or conditions stated by you or your agents varies from those values and conditions of that given by the third party appraiser or provider, your final loan terms or offer will change.in some cases you may not be eligible for any loan product.
Resolution of Disputes; Choice of Law This contract is executed in Riverside County and thus venue is agreed to be placed within Riverside county by all parties. Do not sign this contract unless you agree and understand this provision.
For disputes, less than $5,000 or within the local statutory limits, all disputes and controversies arising out of this Agreement or Broker's services shall be adjudicated through small claims activities within the Riverside, California venue. The prevailing party shall be entitled to recover all reasonable fees incurred specifically conforming and enforcing any award and resulting judgment. The court with venue shall have
jurisdiction to award the attorney fees under these guidelines. The California Superior Court for Riverside County shall have exclusive jurisdiction to adjudicate enforceability of this clause.
For disputes over $5,000, all disputes and controversies arising out of this Agreement or Broker's services shall be decided through binding arbitration using the Riverside County Bar Association Alternative Dispute Resolution (RCBA-ADR) program and its commercial arbitration rules if it has them. If the RCBA-ADR cannot or will not serve as the ADR provider, the parties will use JAMS and its commercial arbitration rules. The
arbitration shall take place in Riverside or San Bernardino County, California. The parties shall pay and advance equally all arbitration fees and costs. To the maximum extent permitted by law, any party failing to advance its share of arbitration fees may notparticipate in or present evidence at the arbitration, but he/she/it will be bound by the results. This Agreement shall be construed under, shall be governed by, and the
arbitrator shall apply California law. The prevailing party shall be entitled to recover arbitration fees and costs incurred but not attorney fees incurred in the arbitration. The prevailing party shall be entitled to recover attorney fees incurred specifically confirming and enforcing any arbitration award and resulting judgment. The court confirming the arbitration award shall have jurisdiction to award the attorney fees under
these guidelines. The California Superior Court for Riverside County shall have exclusive jurisdiction to adjudicate enforceability of this arbitration clause.By signing this document, you are agreeing to have any dispute decided by arbitration. You are giving up any right you may have to litigate the dispute in court with a Judge and/or jury, and you are giving up your rights to discovery and appeal.
You may opt out of this provision by not signing this agreement. If for any reason a court of competent jurisdiction rules this arbitration clause is not enforceable, the California Superior Court for Riverside County shall have exclusive jurisdiction to adjudicate all disputes and controversies arising out of this Agreement or Broker's services. It is specifically agreed that each party shall pay their own Attorney fees, costs and expenses should any dispute escalate into the California Superior Court.
This arbitration clause is self-executing. If a party does not appear in the arbitration, the arbitrator may enter a default award against that party.
Processing Disclosure:
PLEASE READ THIS NOTICE CAREFULLY.
CLC does not make any promise or guaranty that your loan will fund in any particular period or time frame. Do not sign this agreement if you do not agree or understand this provision.
Initial and Date %
We have reviewed preliminary information to render a specific scenario under specific circumstances. Final loan determination is made upon the successful completion of credit, value, title and income investigations. Clc inc. Reserves the right to directly speak to any and all parties involved in this transaction at any time. This pre-approval does not guaranty a rate lock until such time the appraisal process is completed. Closing dates are NOT promised nor estimated.
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