On September 16, the NYDFS announced that they have issued subpoenas to nine “hard money” lenders, groups that originate short-term, high interest loans secured by a borrower’s home or other real estate, as part of a probe into whether such lenders are intentionally structuring loans with the expectation of foreclosing on the property. NYDFS noted that “[w]hile many hard money lenders may be engaged in legitimate financial activities, certain unscrupulous companies appear to be taking advantage of borrowers in tough financial straits by making loans that are designed to fail.” The NYDFS’s investigation is focused on whether the nine lenders are intentionally structuring hard money loans with onerous terms, such as high interest rates, numerous upfront fees, and enormous balloon payments, so that borrowers are driven into to default.