The hard money industry suffered severe setbacks during the real estate crashes of the early 1980s and early 1990s due to lenders overestimating and funding properties at well over market value. Since that time, lower LTV rates have been the norm for hard money lenders seeking to protect themselves against the market's volatility. Today, high interest rates are the mark of hard money loans as a way to compensate lenders for the considerable risk that they undertake.
So, how is this affecting hard money lenders? If you own property in some of the states and counties that have been hardest hit it is likely that most hard money lenders will have increased requirements and may not be interested in lending on your property at all until the market settles out. Many residential markets in California, Florida, Nevada and Arizona are on special lists that data companies are providing to lenders and are being labeled as higher-risk markets due to their pricing volatility today.
