ComplaintsforStronghill Capital

• Initial Complaint

  02/26/2024

  Complaint Type:

  Product Issues

  Status:

  Answered

  More info

  We tried to avail a Mortgage against our property on ************************************************* in June of 2023. We were approached by Stonghill Captial in ****** ** in response to a requirement submitted online on Scotsmanguide.com. They Were interested in Giving us a Mortgage loan for which they asked for the requisite documents like the Rent Roll, The expenses and the income to come up with a Loan Amount. We sent them everything that they needed every time there was a need for any document all through the process.The Promise was to finish the Process in 45 Days after signing the contract and paying a deposit of $10000. which was fulfilled in a timely way by us. After 90 Days of time that they took, It seems like they came to feel that the loan of $450000 Against a plaza worth $1 Million was too small a loan for their portfolio and that was mentioned by them a few times during our conversations. Instead of terminating the contract at that time and refunding the money, they came back telling us that the insurance for the plaza was not good enough and that We would have to provide an insurance only approximately $70000 extra.I checked with my insurance agent and they said no one was able to do that due to the age of the property which Stronghill knew from day one. They knew our coverage and checked all the expenses before they estimated a meager 45% loan Coverage.On knowing that this insurance was not attainable and if it was it was at least 10 times the premium which would defeat the purpose for. taking the loan. They shopped for Insurance without our permission and came back with a $18000 Premium instead of the existing $1900. After refusing the loan, They did not refunded only $900 of the $10000 stating that they spent it on appraisal and a lawyer who still seems to be unpaid. We need our deposit back as a whole as they could not fulfill their committed loan and knew everything from Day one! More details available on request. This is a complete breach of Trust.

  Business response

  03/06/2024

  Stronghill Capital issued a Conditional Loan Approval to the Borrower on May 18, 2023, which outlined the terms and conditions under which we could make a loan.  This letter stated including compliant insurance as one of the conditions, and the following:
  
  The following items will be due with executed Conditional Loan Approval:
  
  Non-Refundable Underwriting Fee $5,000.00
  Appraisal Fee * To Be Determined $3,400.00
  Legal/Title Fee Deposit $2,000.00
  Total Deposit $10,400.00
  
  On 6/1/2023, we received the $10,400 deposit and signed Conditional Loan Approval from the Borrower.  
  
  The Conditional Loan Approval also stated that the maximum loan amount would be $450,000, with a maximum Loan To Value ratio of 45% of the value of the property. ************** estimated that the property was worth $1,000,000.  However, the appraisal we received on 6/28/2023 concluded the value was $710,000.
  
  Even though the market value was lower than the ********* estimate, SHC continued to process the loan.  We did this, as a service to the Customer, and because the *** ratio is only one consideration in our approval criteria.  Even though this loan was now at 65% ***, we worked diligently towards issuing an approval.
  
  On 6/29/2023, one day after we received the appraisal, our representatives reached out to the ********* insurance agent to request updates that were needed to his policy to meet our requirements. The Borrower was copied on the email.
  
  On 6/30/2023, we paid the appraisal invoice to the appraisal company in the amount of $3,400.
  
  On 7/18/2023, our analyst informed ************** that his insurance agent had not responded to our insurance representatives in more than a week, and that we reached out to our network of insurance agents to obtain quotes that met SHCs requirements. We also indicated that these would be provided to ************** for his review. ************** responded to that email by answering questions that the agents asked. The analyst thanked him and let him know she passed the information on to the agents.
  
  SHC reached out to 5 agents to find compliant coverage that worked within the ********* budget and allowed the property to still cash flow. However, neither the Borrower nor SHC could find an agent that could insure the property to our requirements for a reasonable cost. SHC never recommended that ************** move forward with an insurance quote that they assisted in finding.
  
  The subject property is in *******, within 50 miles of the coast. The associated risk requires that the Property have *************************** Every lender requires this. The ******* insurance market has seen rates increase by 102% over the past 3 years. This is not unique to SHC.
  
  The Borrower was issued a refund in the amount of $975 in September 2022, after SHC paid the appraisal invoice, all 3rd party costs related to the loan, and a full accounting was completed. 

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