ANCHOR LOANS

I have recently taken a loan from Anchor Loans for the purchase and rehab of a multi-unit residential real property. The loan transaction itself was okay, although it was not as smooth as I would have liked it to be. Also, I wish that they had been more responsive but I managed to close in a relatively timely manner. Their application process is a bit confusing and I think it can be streamlined a little better. I had to deal with multiple individuals and often I had to jump from one person to another. The rehab project is still in progress. I am experiencing difficulty because Anchor Loans is giving me a hard time in accessing the money that I borrowed (the construction holdback), on which I am PAYING INTERESTS of 12%+ per annum. There is basically one inspector at Anchor Loans, who comes out and checks the progress of your project and decides whether to release the funds you borrowed to you. If he does not like something about the way you handle your project, he can refuse to release the funds that you have borrowed. There seems to be no checks and balance in this process -- his word is basically what controls the fate of your project if you borrowed construction funds from Anchor Loans. And you can be caught up in a ridiculous situation where you can't access/use the money you borrowed and yet you continue to pay 12%+ interests on the money. They claim that they're doing this because they have investors to protect. But what they do not seem to realize is that there won't be any investors if there are no borrowers. I don't know if this is how Anchor Loans makes money but I am disappointed at the lack of their willingness to accommodate the borrowers, especially because everyone was nice and accommodating BEFORE I borrowed the funds, and I was recommended Anchor Loans by the LA Real Estate Investors Club, which I trust and respect. The Anchor Loans inspector currently alleges that the way I am handling the project is disorganized and there is "madness" going on, merely because we could not get started on all of the units at the same time because there were tenants living in some of the units. Inevitably, we had to be making a different progress on those units on which we got started later because of the tenant situation. To Anchor Loans, this somehow constitutes "madness" that entitles them to withhold my loan. Their language and demeanor in carrying out the conversation was offensive in and of itself, too, but I won't get into that here. Because they withheld funds pending production of certain documentation (e.g., copies of permits), and because it was imperative that we get immediate access to the funds upon their receipt of the documentation, I constantly gave them a heads-up on the ETA on the documents and requested to let me know when the inspector could be at the property. I did not hear from them in days; the day I transmitted the documents, I called their office three, four times (each time I was forwarded to the draw dept. person's voicemail and I left messages), emailed, frantically trying to get a hold of them. I finally got a hold of the inspector, but he could not show that day. He said he would call me the next morning and let me know when he could come to the property. He did not call the next morning. I called around 11am. He could not come that day either. I explained to him that it was imperative that we get access to the funds by the end of that week because the workers needed to be paid and therefore it was imperative to have him come out as soon as possible. To be fair, he said he should be able to come the following day (he could not give me a time though), but his basic attitude was,"why is that my problem? If I can't come, I can't." I purchased this property through an IRA-LLC. Therefore, we must use funds from a third party lender(s) and cannot use our own money in the interim. Hence the urgency if we run out of the funds on hand. I sufficiently explained this to them at the beginning. The management at the top seems to get it and they accommodated me in this respect at the beginning. But this understanding and accommodation is by no means systematic -- long story short, I have come to realize that Anchor Loans is not an IRA-investor-friendly lender. In any event, I will update my review if things improve or turn out to be different. So far, my dealings with Anchor Loans have been disappointing and a bit frustrating.