SL mortgage and loan lenders?

Can anyone offer any advice or recommendations on the various "entities" that offer loans in Second Life? Here's the situation:

Someone in my home sim (mainland) has 1536 m2 for sale, and a club has been trying to buy it. He's got it high enough now that _he_ thinks they won't go for it ($48000), but it doesn't seem that high to me ... for a person, yes, but not for a successful business, and if that particular club doesn't go for it, another might.

I'd love to buy it myself and I don't mind going up in tier, but I've blown all my ready lindens on setting up my own 2048 and it'll be a while before I have more. I don't use credit cards in real life, so I can't just buy that many lindens on short notice... have to wait till I can budget it in over the next couple of months. I'm happy to do that, but the seller has his second life to get on with and can't wait around for me.

There's a few of us in the sim also talking about buying it as a group property for our local landowners group, and I've already agreed to donate the tier if other people can provide the cash. But most of the others are broke First Landers too, and no one's stepped up yet. Even if we managed that, there'd still be bureacratic hassles to deal with, over how to buy and deed it, and what to do with it after. We've plenty of parkland already, so there's no urgent need for common green space, and I'm not eager for a bunch of fussing over the best use of the space. I'm sure we'd all agree to more parkland, but that wouldn't give us any return on the investment. I'd much rather just buy it myself and let it out as newbie rentals. There's not nearly enough out there that suits a newbie's budget without being ugly, and there's a RL efficiency build in my area that I'd love to try to replicate. The RL rondettes are adorable except for their lack of laundry facilities, and since avatars don't need washers and dryers... but to do that, I'd need the cash on hand.

Are there groups I should stay away from or ones that are well-respected? What kind of interest rates are reasonable, and what kind of vendors or scripts do they to use ensure payment? Since they'd be giving me the money, it _seems_ like they'd be taking on all the risk, but that can't possibly be right, could it? I'm sure there are deadfalls and snares in the idea somewhere, and I just don't know what they are yet.

When you take on a mortgage with someone, the person lending the money to you would buy the land on your behalf.

Using the group tools, the lender would create a group and set permissions such that you could do everything except resell the land.

The lender then deeds the land to the group and makes you a member. You can now use the land as you wish.

You and the lender would have to agree on a repayment plan. Repayments are based on the cost of the land over a period of time, plus tier, plus interest....as follows:

Payment = (TotalCost/#payments) + Tier + Interest

Your lender would usually include details about what happens if you are late or simply do not pay (you usually loose the land and anything you paid to date).
As you can imagine, the interest rate is not likely to be at prime lending rates - but that varies from lender to lender.

One thing that you should be aware of is that LL takes an active role in fraud detection and have stated that L$ obtained through fraud and transferred between parties could result in all parties’ L$ being removed - permanently. That fact is going to make getting the financing more difficult, unless your lender has access to LL’s Risk API – in which case the lender would be able to determine if you are a risk for fraudulent L$. Keep in mind that a lot of people deal in 100’s of thousands or millions of L$, so they have a lot to lose.

Keep in mind that the tier your lender charges you may be different from LL’s tier fee - especially if the lender needs to go to another tier level to finance your land for you.

So, to answer your question about risk, there is very little risk for the lender (other than the fraud aspect, but that can be mitigated). You, on the other hand, need to trust the lender to give title of the land to you or hang around long enough for you to pay it off.

-2fast

Unfortunately there's actually a lot of risk for the lender, which is why you generally don't get loans in SL.

The problem is, you're right that LL will monitor fraud by L$ exchanges, but they won't monitor fraud in other areas. If someone agrees that they'll pay a loaner some amount per week, and then they don't, but instead just quit SL.. then there's nothing that can be done. Even in the extreme case, LL might take away the person's SL assets or L$, but since they've quit SL, what do they care anymore?

Sure there is something the lender can do in this case . . . sell the land. Even if the person requesting the loan does not pay one L$ to the lender, the lender can simply flip the land.

Granted, if the lender had to tier up then there may be a problem - but that can be itigated a little by having the person requesting the loan pay somethging upfront.

Besides, most lenders would already be in the land business anyways - so they can easily assess the value of the land shoud they have to resell it.

-2fast

Thanks for the replies, folks. I'm slowly coming to the conclusion, not yet proven, that the club in question doesn't actually exist, so I'm no longer feeling any urgency to move on this. I'd still like to buy the land -- I was dreaming of building my rondettes in that area long before it went up for sale -- but that can be left for the future. My sim's nice enough that I'd expect to pay a little over market value and prices for 1536s seem to be all over the map anyway, but I'm not willing to pay _that_ much for it without an urgent reason. The lender information will still be useful for future reference, though -- thanks for giving such a clearly defined explanation! At least now I understand why someone would advertise themselves as a lender.