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Ely
Ely, Counselor at Law
Category: Real Estate Law
Satisfied Customers: 102601
Experience:  Qualified attorney in private practice including business, family, criminal, and real estate issues.
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I am trying to get a hard money loan and received an LOI

Customer Question

I am trying to get a hard money loan and received an LOI from one particular company. In that LOI it states that once I sign it I have to go forward with the loan or be forced to pay $1600 in document fees. My problem is this I signed it and the next morning I got a much better offer from another company. At which point I talked to the first company and told them about the offer asked them to match it and I would stay with them but instead I got a threatening email stating that if I don't go forward with their loan I will be forced to pay the $1600. My first question is this legal? My second question is on the LOI my legal name was not correctly listed on the document (my legal name is R ***** ***** they had it as Chris R Turner)and the amount of the loan was incorrect. I asked for $130,000 and the LOI was written for $120,000. Can either of those errors make the contract null and void. Thank You
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Alex Esquire replied 1 year ago.

Hello. My name is***** will be happy to answer your question.
I am sorry to hear about this unfortunate situation.
Please note, I cannot comment on your specific situation, as this services is only limited to general information and for any legal advice / legal service you should contact your local attorney.

Was an actual contract signed by you which stated that you did agree to $1600 document processing fees?

Were documents processed?

Please provide me with more details.

Customer: replied 1 year ago.
I did stupidly sign it even though it had the errors and yes it did state that if I backed out of the loan or anything else short of doing the loan Iwould have to pay. But no documents have been done yet.
Customer: replied 1 year ago.
here is the document
Expert:  Alex Esquire replied 1 year ago.

I am sorry but I am not permitted to review any actual documents for JustAnswer.com customers, so I will opt-out of your question at no charge to you and will open your question up for review by other JustAnswer.com legal professionals.

I wish you the best of luck!

Customer: replied 1 year ago.
don't look at the document
Expert:  N Cal Attorney replied 1 year ago.

New Expert here.

Thank you for your question.

I have to ask why did you sign it if the loan amount was incorrect?

Customer: replied 1 year ago.
Because I am an idiot! To put it simply
Expert:  N Cal Attorney replied 1 year ago.

Are you saying that you did not notice that the amount was incorrect and that you signed it by mistake?

Customer: replied 1 year ago.
I emailed him back and waited for the new LOI but didn't receive so I signed the original and sent i.
Expert:  N Cal Attorney replied 1 year ago.

I am sorry but State Bar rules prevent me from phoning you.

I will opt out and let another Expert take over.

Customer: replied 1 year ago.
Ater
But is there any possibility that the ecause the new LOI was never sent that this one with te errorsis null and void?
Expert:  Ely replied 1 year ago.

Hello. I am sorry you are getting "bounced around" a bit. Allow me to answer your questions. Please note:This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

My first question is this legal?

It may be unethical, but it is legal. If someone in your situation had already signed a contract agreeing to work out a loan or something akin to this, then they may have been talking about enforcing this. If there was no contract signed at this time, but they still threatened the $1,600 fee, then they may have been bluffing to scare you. And it worked. It is unethical, but not illegal per se. However if this is the case, a complaint may be filed with the administrative authorities who may slap them on the wrist for their actions. NOTE however, this would not decease one's liability under the contract.

My second question is on the LOI my legal name was not correctly listed on the document (my legal name is R ***** ***** they had it as Chris R Turner)and the amount of the loan was incorrect. I asked for $130,000 and the LOI was written for $120,000.

I am afraid not. Allow me to explain why. As for the name, (a) if it was a minor mistake and obviously both parties understood who the party borrower was, then this is not an issue. And, (b) the loan is enforceable against whoever signs it. So if someone in your situation signed it and received money from it, then one is liable.

As for the loan amount, under something called parol evidence rule, when there is a written agreement and a verbal agreement about the same thing, the written agreement controls. As such, whatever amount is written into the contract which you signed controls the situation. I am sorry. It is presumed that the signor read and agreed to the terms prior to signing.

Please note: If I tell you simply what you wish to hear, this would be unfair to you. I need to be honest with you and sometimes this means providing information that is not optimal. Negative ratings are reserved for experts who are rude or for erroneous information. Please rate me on the quality of my information; do not punish me for my honesty.

I hope this helps and clarifies. Please use the SEND or REPLY button to keep chatting, or please RATE when finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of TOP THREE FACES/STARS and then SUBMIT, as this is how experts get credit for our time. Rating my answer the bottom two faces/stars (or failing to submit the rating) does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith with a positive rating.

Expert:  Ely replied 1 year ago.

Hello again. This is a courtesy check in to see if you needed anything else in regards ***** ***** question. I am simply touching base. Let me know if you did not see my answer after the previous experts had opted out. Thanks!