Norma was worried.

The 60-year-old Inglewood resident had been on leave without pay from her U.S. Postal Service job to deal with a diabetes diagnosis. And now she was about to tap into $50,000 worth of equity at one of her rental properties to dig herself out of debt.

But after not working for nine months, her credit was a mess, and no A-paper lender would touch her. Instead, she found herself at a converted home on Balboa Boulevard in Encino, where a tiny six-person operation called Value Home Loan throws life lines to folks like her.

But at a price.

Norma had been forced into the nether world of the sub-prime market, where there is no shortage of both institutional and micro lenders and business of all sizes in between who are more than willing to part with what is called the "hard" money.

It comes with a lot of points, and interest rates that can reach 15 percent, but sometimes it's the only way to tap into equity, or even buy a first home when the Washington Mutuals of the world turn you down.

"After nine months off work, what can you say? Your credit is funny," said Norma, who requested her last name not be used to protect her identity from co-workers and tenants. "I just got in a squeeze."

Value may be the only sub-prime lender in the region plying its wares in a converted suburban house that could easily be mistaken for a home. A neatly trimmed hedge buffers the white-and-red stucco house from busy Balboa Boulevard. A water hose lies casually near its entrance. It backs up against an elementary school. But the appearances are deceptive.

High school beginnings

The company was started four years ago by Neil Gitnick, who at 34 traces his roots in real estate to his high school days, when he and a friend published a magazine containing Valley real estate listings.

Gitnick, who grew up Encino, later attended Georgetown University. (He's probably the only hard money lender with dual bachelors in art history and psychology.) But once out of school it was back to real estate, including a stint soliciting loans for another hard money lender in the mid to late 90s. The lender made mortgages to speculators who were buying homes damaged in the Northridge Earthquake, fixing them and selling them for a handsome profit.

By 1997, Gitnick decided he wanted a piece of the action himself, and started Value in the corner of a Canoga Park office in space donated by a friend. It was just him and an assistant doing everything, drawing $600,000 worth of capital he had convinced his family to invest.

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