How to borrow without getting burned.
Private lending moves fast. The same speed that lets you close in 10 days also gives bad actors room to operate. These are the guidelines we recommend — not legal advice, not a guarantee, just the patterns we've seen separate clean closings from disasters.
Never wire upfront fees outside escrow.
Legitimate hard-money lenders do not ask for application, processing, or 'good faith' fees wired to a personal or LLC account before closing. Real fees come out of the funded loan at closing or are paid into escrow.
If a lender asks you to wire any money before closing — even a small amount — to anywhere other than a licensed escrow / title company, walk away.
Use a licensed escrow / title company. Always.
California requires escrow services on real estate transactions to be licensed by the Department of Financial Protection & Innovation, conducted by an attorney, or handled by a licensed title insurer. Common reputable options: Old Republic, First American, Chicago Title, Fidelity National, Stewart Title.
The escrow company holds funds, records the deed of trust, and disburses to the right parties. They are the licensed neutral party — not the lender, not the borrower, and not Hardline.
Require a recorded deed of trust before funds disburse.
On a hard-money loan in California, the lender's protection is the recorded deed of trust against the property. Funds should not disburse until the deed is recorded with the county recorder (or in escrow's hands ready to record same-day).
Confirm with escrow that recording is part of the closing instructions. If a lender asks you to receive funds before recording, that is a red flag.
Title insurance is not optional.
Get an ALTA Loan Policy (sometimes both Owner's and Loan policies). The title commitment is your evidence that the property has clean title and that no surprise liens are about to wreck the loan. Your lender will require it; you should require it of yourself.
Review the preliminary title report. If anything is unclear (easements, prior liens, judgments), ask your title officer to explain before signing.
Verify wire instructions by phone — every time.
Wire fraud is the #1 cause of closing-day losses in real estate. The pattern is always the same: criminals compromise email, send fake wire instructions that look identical to the real ones, and the borrower wires to the wrong account. Funds are usually unrecoverable within hours.
Always call your escrow officer at a number you looked up independently — from their company website, not from the email — to verbally confirm wire details before sending. Never trust wire instructions delivered only by email.
Carry hazard insurance with the lender as loss-payee.
Before closing you'll need a hazard insurance binder showing the lender as a named loss-payee for at least the loan amount. This protects them — and you — if the property burns down between funding and exit. Lenders will (and should) require it.
Read the loan documents. Especially the prepayment penalty and default rate.
Standard hard-money documents include the promissory note, deed of trust, and a personal guarantee or LLC operating agreement reference. Pay attention to:
• Default interest rate (often 18–24% in CA — what kicks in if you miss payments)
• Prepayment penalty or minimum interest (you may owe N months of interest even on a fast exit)
• Extension terms (how much it costs to extend if you can't exit on time)
• Cross-collateralization clauses (does this loan tie to other properties?)
Have a real estate attorney review the docs if anything is unfamiliar. The cost ($300–$1000) is rounding error vs. the loan size.
Hardline's role: coordination, not custody.
We don't move money. We don't take a cut of the wire. We don't sit between you and the lender. The wire goes lender → escrow → seller (and lender → escrow → you for any cash-out portion). All Hardline does is help you find each other, exchange documents, message safely, and track the lifecycle.
If anyone — including someone claiming to be from Hardline — asks you to wire funds to a Hardline account, that is fraud. Report it to us immediately.
Quick checklist before you sign
- Licensed escrow / title company is named in the closing instructions.
- Preliminary title report reviewed; no surprise liens.
- Title insurance binder issued.
- Hazard insurance binder issued, lender named as loss-payee.
- Wire instructions verified by phone (not email) with escrow.
- Loan docs reviewed — default rate, prepayment, extensions all understood.
- Recording is part of the closing instructions, not after-the-fact.
- No upfront fees wired anywhere outside escrow.
This page is general educational content, not legal, tax, or financial advice. Hardline is not a lender, broker, escrow, or title company. Laws vary by state; California rules apply to California transactions.