Doss Guides

The primary sources of claims we are seeing in the private money world are coming from owner-occupied business purpose loans as well as if your borrower is a natural person, living trust, closely held entity, the loan is complex, the business purpose is in question, and/or if the borrower does not understand the terms of the loan.  The owner-occupied business purpose loan is a loan secured by a primary dwelling to finance a business or to purchase investment property.  When the borrowers on these loans default, some will go to their lawyers and seek help staving off a foreclosure.  If the claim is not settled immediately, the cost of the resulting lawsuit will be excessive.  If a borrower wins in proving the loan was a consumer loan, not only will the court give the borrower a free loan (reversal of all interest and fees) and more time to pay but will also make you pay for all of the legal fees (your law firm’s fees and the borrower’s attorney’s fees).  You could easily be out hundreds of thousands of dollars.

Courts will look beyond the label of the loan.  They will evaluate whether the transaction was actually for business purposes or whether the borrower used the loan for personal or household needs.  A written statement alone is not enough.  You need to be able to show the full picture.

Doss Law, PC has researched the nine ingredients to successfully document a business purpose loan.  If these nine items are done carefully and thoroughly, that should be enough to make a borrower’s lawyer go away before filing a lawsuit to challenge your loan.  

If you want to vastly improve your odds of deflecting a claim at its inception, think about leveraging a recorded borrower video.  After all, we now live in a world where human interaction is often via video rather than in person or a phone call.  A video of the borrower or borrowers explaining the business purpose live on camera is going to be a powerful deterrent to a claim based upon the alternate reality that might otherwise develop if the borrower defaults.

At Doss Law, we’ve developed a structured approach to these borrower video sessions.  The format includes borrower identification, confirmation of loan purpose, review of key terms, and an on-record acknowledgment that supports business purpose classification.  While every conversation will vary slightly, the goal is always the same: to create a timestamped record that documents borrower understanding and intent before the loan is signed.

The strength of the video lies in how it’s conducted.  A loosely run conversation won’t hold up later.  You need the right questions, asked the right way, at the right moment in the process. That’s why we developed DossLock™ – a streamlined, attorney-led borrower interview designed to capture legal proof of intent on video.  It covers identity, mental clarity, business purpose, document review, and repayment expectations, all structured to protect the lender.

When done correctly, a recorded video can serve as meaningful evidence of borrower intent and understanding.  The key is asking the right questions, documenting the right points, and avoiding anything that could weaken the file if it’s ever challenged.

The questions we ask are designed to reduce ambiguity, prevent post-default claims, and ensure that the file contains clear, consistent evidence of how the borrower understood and intended to use the loan.

A borrower intent video avoids unnecessary risks.  It’s an added layer of protection for lenders and brokers making business purpose loans secured by a primary residence as well as if your borrower is a natural person, living trust, closely held entity, the loan is complex, the business purpose is in question, and/or if the borrower does not understand the terms of the loan.  DossLock™ is a proven format built for defensibility.  It captures borrower intent, confirms purpose, and shows clear evidence of borrower understanding.