Key Takeaways
- Watch for very short terms, high default rates, and harsh extension fees.
- Read every clause about default and foreclosure before you sign.
- Work with reputable lenders and an attorney who reviews the loan documents.
Mendy's Original Take
From the Mendy Realty archive, first published by Mendy Lipsker.
In a recent article by Karen Freifeld for reuters.com, the Department of Financial Services is looking into 9 “hard money lenders,” to see whether they are intentionally creating hard money loans with terms that might be driving borrowers into default.
What are “hard money lenders?” I asked my friend and colleague, Assaf Ran, CEO of Manhattan Bridge Capital, Inc., to give us an explanation of this term. Below is his response:
When you sign a purchase agreement for a real estate property, you can sign what's called a soft contract or a hard contract.
Soft Contract refers to situations where you can exit the contract and your down payment or deposit is refundable.
2026 NYC Investment Snapshot
Investor demand stayed strong in 2026. New York City investment sales reached $23.69 billion through Q3, with multifamily and development sites leading the market.
NYC sales by asset class, Q1 to Q3 2026
Figures through Q3 2026 include projected closings.
How To Protect Yourself
Vet the lender
Check references and past deals.
Review the terms
Have your attorney read the default and extension terms.
Plan your exit
Know how you will refinance or sell before the loan comes due.
Common Questions
What is a loan to own lender?
A lender who structures loans so the borrower is likely to default, letting the lender take the property.
How can I find a reputable lender?
Work with an experienced broker or advisor who knows commercial lenders.
Related Reading
Talk To A Brooklyn Broker
Buying, selling, or investing in New York real estate? Start with a direct conversation.
718.751.0738Market figures compiled from public records and published market data. Information is believed reliable but not guaranteed and should be independently verified.
