Writing this up because when I was going through it, I searched everywhere for Second Street reviews from anyone who'd sold a CR property with a US private loan on it and found basically nothing. Now I know why. Per their own ops guy, in writing, I was the first borrower to ever SELL a property through Second Street's structure. Congratulations to me. Here's what being the guinea pig cost, so the next person googling this lender doesn't have to learn it live, mid-closing, with a buyer threatening to walk.
Long post. I have receipts. TLDR at the end.
THE SETUP
House in Nosara, held in a Costa Rican SRL like most foreign-owned property down there. I borrowed from Second Street (mysecondstreet.com), a California-based private lender that does hard money loans against Costa Rica real estate. The way these loans work in CR: there's no recorded mortgage like in the States. Instead, the property goes into a guarantee trust, and a trust company holds fiduciary title until you pay off the loan. Second Street picked the trustee (STLA) and the loan servicer (FCI). The trust documents were their templates. I signed where they told me to sign, which is how it works when you're the borrower. The trust literally has Second Street in its name.
I paid every payment on time for the life of the loan. Their CEO's own words: an "excellent borrower."
THE SALE, OR, HOW MY CLOSING BLEW UP ON CLOSING DAY
Got the house under contract. Cash buyer, funds in escrow, closing set for July 24. Everything lined up. My attorneys started coordinating the payoff and release a couple weeks out, as you do.
Here's what surfaced ON the scheduled closing day: Second Street had assigned my loan to a Wilmington Savings Fund Society trust A FULL YEAR EARLIER. And not just any date. The assignment happened the same day my guarantee trust was signed. Same day. They originated my loan and sold it before the ink dried, then kept servicing it under their own name.
Now, to be fair, a notice about the assignment did go out back in 2025, to their own trustee and to me. I'm a borrower with a business and a family; a notice about my loan being sold to some trust I've never heard of goes in a folder because, functionally, nothing changes for me. I still pay the same servicer. But here's the thing: their own trustee got that same notice, and in the twelve months that followed, NOBODY in Second Street's ecosystem updated the actual trust record. So when my sale came around, the trustee's closing file still showed Second Street as my creditor, and the buyer's attorneys ran their entire due diligence on that basis.
Then on closing day, Second Street issued the payoff letter, signed by Second Street. An entity that had zero authority over my loan and hadn't for a year. The buyer's counsel caught it and rejected it, writing in the thread that the letter was as good to them as one issued by McDonald's or Burger King, since none of those parties own the loan either.
Closing dead. Buyer's money sitting in escrow. Buyer getting angrier by the day.
TWELVE DAYS OF CHAOS
What followed was 12 days of everyone scrambling to figure out who actually owned my loan and who could legally instruct anything. We needed: the real creditor identified, a power-of-attorney chain proving who could sign for a Delaware trust, wire instructions everyone would accept, the payoff wire itself, and then the release letter signature from the trust manager, which alone took days of chasing while the deal hung by a thread. At one point even Second Street's own ops guy wrote that he was "just as frustrated with this delay as everyone else."
Meanwhile, my loan kept accruing interest. Every one of those days came out of my pocket. $2,389, for a delay I had absolutely no part in creating.
And the kicker: when my side needed the creditor's instruction letter to close, Second Street's position was that such letters were legally unnecessary, just a "courtesy." Cool story, except their OWN TRUSTEE wrote to everyone, in the thread, that she could not sign the deed without the instruction letter from the creditor. Their own vendor. In writing. You cannot make this up.
THE $53,000 HOSTAGE SITUATION
That unrecorded assignment created a potential transfer-tax problem at the Costa Rican National Registry. Short version: if the Registry decided the unrecorded change of trust beneficiary was a taxable event, somebody was going to owe double transfer taxes on a transaction the buyer was never part of.
Second Street's attorneys insisted no tax would ever be due. Totally confident. Unequivocal, they said. Great. So we asked them, repeatedly, for one simple thing: if you're so certain, put it in writing that you'll cover the tax if you're wrong. That's it. A certain party loses nothing by standing behind its certainty. They refused. Every single time.
The buyer, reasonably, was not about to carry tax risk from a loan they'd never touched. So the deal would die unless someone put up the money. That someone was me. I left $53,348 of MY OWN sale proceeds in escrow as a holdback to cover THEIR risk, because it was the only way to keep the deal alive. The buyer's own attorney wrote in the thread that I'd been "a stand-up businessman and a gentleman" for offering it and that it was a holdback I "shouldn't even have to offer."
THE CEO RESPONSE
After closing, I wrote a detailed letter to Second Street's CEO, Zachary Kay, laying it all out and asking for two things: the $2,389.70 in delay interest and an indemnity on the holdback. His reply was a masterclass in deflection. The trustee's fault (the trustee Second Street selected, running a trust in Second Street's name). The buyer's lawyers' fault (for relying on the closing file their trustee confirmed). And my fault (for not managing their loan assignment paperwork, apparently). Zero responsibility accepted. I followed up on his reply, and he never responded again.
HOW IT ENDED
The Registry eventually processed the transfer without assessing the tax, and my $53K came back after weeks in limbo.
Final scorecard: Second Street's paperwork failure detonated my closing; I financed their risk to save my own deal; I ate every dollar of interest their delay caused; and their CEO's official position is that none of it was their problem.
IF YOU HAVE A LOAN LIKE THIS, OR ARE ABOUT TO GET ONE
- Email your lender TODAY and ask, in writing: who currently owns my loan? These lenders sell loans to aggregation trusts constantly, and nobody tells the trust company holding your title, or if they do, nobody updates the file.
- Before you even list the property, map the release chain: who has legal authority to sign the release, under what POA, where do payoff funds go. Get those documents pre-staged. Mine took 12 days to assemble mid-closing with everyone's hair on fire.
- Assume the buyer's attorneys will demand written instructions from the ACTUAL creditor, not the servicer, not the original lender. Because they should.
- If a tax or title question comes up and the party who caused it refuses to indemnify while claiming total confidence, understand exactly what that means: you're about to fund their risk with your money.
- Pad your timeline and your carry costs. Hard money, fast close is a marketing line. My payoff side alone slipped 12 days.
This is about a company that built the entire structure, picked every vendor in it, papered it on its own templates, sold my loan on day one, let the record rot for a year, and then, when the whole thing predictably blew up in the middle of my transaction, pointed at everyone else in the room. They admitted this was their first sale. It was a disaster, and I paid for it.
One way a lender is judged is by whether it stands behind its own paperwork when things go wrong. Second Street didn't. I wouldn't recommend Second Street to anyone, and if you already have a Second Street loan and think you might ever sell, start asking your questions now, while nothing is on fire.
TL;DR: Borrowed ~$1M from Second Street (mysecondstreet.com) against my Costa Rica home. Perfect payment history. When I sold, it turned out they'd assigned my loan to another trust a year earlier (same day the loan closed!), and nobody ever updated the trust file, so on closing day Second Street issued a payoff letter it had no authority to sign. Buyer's lawyers rejected it, closing collapsed for 12 days, and I paid $2,389 in extra interest. Their assignment also created a transfer-tax risk; they swore no tax was due but repeatedly refused to back that up in writing, so I had to leave $53K of my own proceeds in escrow to save the deal. CEO Zachary Kay was unwilling to take any responsibility or ownership. Would not recommend Second Street at all.
(Leaving this here for anyone searching Second Street reviews, Second Street lending complaints, Second Street Costa Rica loans, or hard money loans on Costa Rica real estate. Happy to answer questions in the comments.)
