Introduction: A History of Legal Trouble and Scams in the Lending Industry
Kennedy Funding Financial, a private hard-money lender based in Englewood Cliffs, New Jersey, has been embroiled in numerous lawsuits and complaints regarding its business practices.
Founded by Kevin Wolfer, the company is known for offering commercial bridge loans for real estate development, foreclosures, bankruptcies, and commercial property acquisitions. While the firm claims to have closed over $3 billion in loans, it has faced significant criticism from both businesses and individual investors who allege they were defrauded or misled by its operations.
In this article, we’ll take an in-depth look at the red flags associated with Kennedy Funding Financial, its multiple lawsuits, and the widespread public distrust that has earned it a reputation as a fraudulent lending institution. If you’re considering a loan with this company, or you’re simply interested in learning more about its history of complaints, read on to find out why many industry professionals caution against engaging with this lender.
What Kennedy Funding Financial Claims to Offer
Kennedy Funding Financial positions itself as a direct private lender specializing in hard money loans for real estate developers and businesses in need of quick financing solutions. Their offerings include:
- Bridge loans: Short-term loans to cover gaps in real estate transactions.
- Foreclosure and bankruptcy financing: Specialized loans to help businesses or individuals facing foreclosure.
- Commercial property acquisition loans: Loans to fund the purchase of commercial real estate.
- Workout loans: Financing for businesses in financial distress.
Despite these claims, numerous complaints and lawsuits suggest that Kennedy Funding often charges hefty upfront fees without delivering on the promised loans. Many individuals and businesses report losing substantial sums to the company, only to find their loans never close.
Kennedy Funding Financial’s Marketing Tactics: Heavy Spending on Public Relations
An interesting aspect of Kennedy Funding Financial’s operations is its heavy investment in public relations (PR) campaigns. A simple Google search of “Kennedy Funding Financial PR” reveals numerous press releases, paid promotions, and positive stories designed to enhance the company’s public image.
However, this raises an important question: Why would a lending firm invest so much in PR if it were genuinely reputable and trustworthy?
The answer lies in the negative reviews and widespread complaints about the company. Kennedy Funding Financial’s PR efforts appear to be a countermeasure to suppress the negative publicity surrounding its business practices. With so many people coming forward with allegations of scams and fraud, the company’s marketing efforts seem more like damage control than genuine promotional activity.
Kennedy Funding Financial Complaints: A Pattern of Fraudulent Practices
The most common complaints against Kennedy Funding Financial revolve around its predatory lending practices, especially concerning upfront fees and unfulfilled loan commitments. Below are some of the most notable red flags and complaints from customers:
1. Excessive Upfront Fees
One of the primary complaints from customers is that Kennedy Funding charges exorbitant upfront fees for its loans, often under the guise of a “due diligence fee” or similar charges. These fees can run into the hundreds of thousands of dollars and are often non-refundable, even if the loan is never closed.
For example, a customer reported that they were charged up to $100,000 for a due diligence fee, only to never hear back from the company. Despite multiple attempts to contact Kennedy Funding for a breakdown of the fee, the company remained unresponsive. When the customer visited their office, they were told they could request a refund within three days, but their refund request was ignored.
Such reports are consistent with other customer complaints, where clients are asked to pay substantial sums upfront for loans that ultimately never close.
2. Misleading Loan Terms and Fake Projects
Another common complaint is that Kennedy Funding misrepresents the terms of their loans. Once an investor or business signs a contract and submits their fees, the company often delays or even cancels the loan, citing various excuses. In some cases, clients have reported that Kennedy Funding misrepresents the status of the loans on their website, listing fake or incomplete projects to create the illusion of being a legitimate enterprise.
One reviewer mentioned that they knew investors who paid up to $180,000 for loans that were never funded. These investors were later informed that Kennedy Funding could not proceed with their loans, despite having paid significant sums in advance.
Kennedy Funding Financial Lawsuits: A Legal History of Breach of Contract and Fraud
Kennedy Funding Financial’s business practices have led to numerous lawsuits and legal disputes. Some of the most notable cases include:
1. $1.67 Million Lawsuit for Breach of Contract and Fraud
In one high-profile case, a cemetery owner filed a lawsuit against Kennedy Funding Financial after the company breached its contract. Kennedy Funding was supposed to keep $675,000 in escrow for a bridge loan but never funded the loan. When the cemetery owner attempted to withdraw the funds from the escrow account, they found that there was no money in it.
The lawsuit, which lasted nearly two decades, culminated in a jury verdict in favor of the cemetery owner, awarding them $1.67 million in damages for breach of contract and fraud. However, the verdict was later adjusted on appeal, with Kennedy Funding being ordered to pay only $675,000.
2. $282 Million Lawsuit with Fortis Bank
Kennedy Funding Financial was also involved in a $282 million lawsuit filed by Fortis Bank, one of its large institutional lenders. The lawsuit alleged that Kennedy Funding had caused an increase in loan defaults, forcing the bank to take quick action to recover its losses. Although the lawsuit was settled out of court, it highlights the company’s troubled financial standing and the aggressive nature of its business practices.
3. Lawsuits from Real Estate Developers and Businesses
Kennedy Funding Financial has been involved in a series of lawsuits with real estate developers and business owners who claim the company charged them upfront fees for loans that were never funded. In one case, the company allegedly offered a $3 million loan to a real estate firm, but after the firm paid the required fees, Kennedy Funding kept changing the loan terms and ultimately failed to issue the loan.
Other lawsuits involve similar claims of breach of contract and unfair business practices. One such case saw a company named Royale Laua Resort suing Kennedy Funding for a $2.7 million dispute over breach of contract. The court found that Kennedy Funding had failed to honor its agreement, resulting in damages for the resort.
4. Other Legal Battles
In addition to the major lawsuits mentioned above, Kennedy Funding Financial is also facing multiple legal battles related to the improper charging of commitment fees for loans that were never issued. These cases are ongoing and involve significant sums of money, with plaintiffs seeking restitution for funds lost due to Kennedy Funding’s unethical practices.
Why You Should Avoid Kennedy Funding Financial
Given the numerous lawsuits, public complaints, and ongoing legal troubles, it’s clear that Kennedy Funding Financial is not a reliable or trustworthy lender. The company has developed a reputation for scamming businesses and investors by charging hefty upfront fees and failing to follow through on loan commitments.
If you’re considering doing business with Kennedy Funding Financial, it’s important to carefully assess the risks. The company’s history of fraudulent behavior, unfulfilled promises, and questionable financial practices makes it a high-risk choice for anyone seeking funding.
Conclusion: Protect Yourself from Lending Scams
Kennedy Funding Financial’s pattern of charging upfront fees for loans that never close, combined with its long history of lawsuits and public complaints, makes it a prime example of why you should be cautious when dealing with hard-money lenders.
If you’re in need of a bridge loan or other commercial financing, it’s crucial to do thorough research and consider reputable, well-established lenders. Avoid any company that demands large upfront fees without clear terms and transparent processes.
Remember, always read the fine print of any contract, and consult with a financial advisor before making any major financial decisions. There are legitimate lenders out there, but Kennedy Funding Financial is not one of them.
