A new trade group that caters to the 'hard money' segment of the mortgage industry has drafted a code of ethics for its members — lenders that are privately held and cater to borrowers who can't get credit elsewhere.
The American Association of Private Lenders said the code of ethics is a working document that will be refined over time.
The trade group stresses that it is the intent of its members to "see the loan succeed and perform in accordance to the agreed upon terms. At no time will our members originate a loan only to seek the property back through unscrupulous lending practices."
The APPL says its lenders will adhere to mortgage-related regulations and laws including, The Fair Housing Act, Equal Credit Opportunity Act and SAFE Act as well as all predatory lending and predatory servicing laws.
Another bullet point specifies that "bait and switch" tactics will not be tolerated in the industry. "Members will try to work with their borrowers in an effort to exhaust all reasonable options prior to foreclosing on a mortgage."
AAPL said its membership includes not only hard money lenders, but brokers, attorneys, accountants, mortgage fund managers, loan servicers, debt buyers, and consultants.
