25 Years of Hard Loans in California: What I’ve Learned About Getting to Yes

I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. This post is more personal than most — it’s what 25 years of closing hard California loans actually taught me about finding yes when other lenders say no. Call (800) 239-1103.

Twenty-five years ago, I closed my first hard loan in California. A self-employed contractor in Marin County, two years out of bankruptcy, buying a house on a street most lenders had flagged as a fire risk. Three lenders had already passed. I found the fourth.

That’s basically been my career. I didn’t set out to specialize in difficult loans — it just turned out that California has a lot of them, and I got good at saying yes when other people said no.

Here’s what 25 years of closing hard California loans has actually taught me.

Most “Impossible” Loans Have a Solution — Just Not at a Bank

Banks are approval machines designed for a narrow range of borrowers. W-2 income, standard property, conforming loan amount, clean credit. When all four line up, a bank is fast and efficient. When any one of them doesn’t, you’re out of their system entirely.

What I figured out early in my career is that for every type of borrower a bank can’t handle, there’s usually a lender who can. The job is knowing who that lender is. Over 25 years, I’ve built a network of 40+ wholesale lenders and private investors — most of them invisible to the general public because they don’t advertise. They work through brokers. They have specialty programs. They have underwriters who actually read files rather than running them through a scoring model.

The loan I spend the most time on today is one I’ve done hundreds of times: the self-employed borrower whose tax returns show a fraction of their real income. Their business deposits tell a completely different story. A bank sees the tax returns and declines. I go to a bank statement lender. The income picture looks completely different. The loan closes.

The Property Issues Nobody Warns You About

California has property types that most states barely think about. SB 326 non-warrantable condos. Agua Caliente tribal leased land in Palm Springs. Fire zone properties. Mixed-use buildings. High-rise condos with hotel arrangements. Each one creates a financing puzzle that sends most lenders running.

SB 326 is the one I’m handling the most right now. California’s balcony inspection law has created a wave of buildings flagged as non-warrantable by Fannie Mae and Freddie Mac. A buyer comes in, wants a condo in San Francisco or Oakland, the building has a pending SB 326 issue, and their conventional lender declines. They think the deal is dead.

What I know is which portfolio lenders have reviewed and approved the SB 326 landscape and will close on affected buildings — and at what rate premium. I’ve closed enough of these to know the questions to ask: What exactly did the inspection find? Is there a funded repair plan? Has litigation been filed? The answers determine which lender fits.

Palm Springs leased land is another one that separates brokers who know what they’re doing from those who don’t. About a third of Palm Springs sits on Agua Caliente tribal land. Fannie Mae and FHA both have approved protocols for financing Agua Caliente leases within conforming limits — that part is actually straightforward. Above $806,500, it gets harder. Most jumbo lenders don’t have a leased land approval process. The few wholesale investors who do, I know by name. I’ve called them. I’ve closed the loans.

The Lender Network Is Everything

The single biggest advantage I bring to a difficult loan is lender relationships. Not a directory of lenders — actual relationships. When I call a non-QM underwriter on a complex file, they know me. When I ask them to take a second look at a file they’ve initially flagged, they do it. When a deal has a legitimate explanation for a red flag — a one-time income drop, a short sale during COVID that was economic not financial, a credit event with a real story — I can make that case in a way that gets heard.

That doesn’t work at a bank. At a bank, your file goes into a queue. An underwriter you’ve never spoken with makes a decision based on what’s in the file. There’s no conversation.

The brokers who close hard loans have invested 10, 15, 20 years in those relationships. You can’t build them overnight. Mine took 25 years.

Creativity Is Really Just Experience

People call me a “creative” mortgage broker. I appreciate it, but the truth is more boring: I’ve seen enough situations that most unusual files aren’t actually unusual to me. A retiree with $4M in investments and no earned income — I know immediately that’s an asset depletion loan. A foreign national buyer from Canada wanting a Palm Springs second home — I know which three lenders handle that well. A borrower with a 592 credit score who has $300,000 in equity and pristine payment history for the last 18 months — I know where to put that.

“Creative” is usually just having done the deal before.

The genuinely difficult ones — the truly unusual situations I haven’t seen — those I work the phones on. I call lenders. I explain the scenario before submitting a full application. I find out who has appetite for this specific combination of factors before the borrower is waiting on an answer. That’s not creativity. That’s research.

What I Still Can’t Do

In 25 years I’ve gotten better at saying yes, but I’ve also gotten clearer about when the answer really is no. No income, no assets, no equity, no story — there’s no program for that. Someone who’s 60 days behind on their current mortgage looking to take cash out — I can’t help with that. A property in such poor condition it won’t appraise — the numbers have to work.

The most useful thing I can offer someone with a hard loan situation is a straight answer fast. If I can do it, I’ll tell you what it looks like and what it costs. If I can’t, I’ll tell you that too — not after three weeks of processing, on day one.