Is 2% per month financing legal? - Posted by Sara_CA

Posted by Tom NH on March 21, 2006 at 05:16:00:

Isn’t a monthly interest rate of 2%, 24% annually?

Is 2% per month financing legal? - Posted by Sara_CA

Posted by Sara_CA on March 17, 2006 at 11:12:19:

24 percent a year.

This is for the sell of a lot in the California desert.

Is this high interest legal?

Thanks in advance.

Re: Is 2% per month financing legal? - Posted by The Frisco Kid

Posted by The Frisco Kid on March 18, 2006 at 18:03:00:

Sara

Maybe yes, maybe no. Yes if seller carryback, yes if arranged by a real estate broker. You need to provide more info for a more specific answer.

2% a month is legal if seller carry back. - Posted by Sara_CA

Posted by Sara_CA on March 19, 2006 at 03:57:42:

Thanks for your response.

I bought this Calif desert land 2 years ago. The seller offered me 100% owner financing at 2% a month. But I opted for all cash purchase. Now 2 years later I am selling it myself, I wondered if I can also offer 2% a month owner financing to my buyer for 2-3 years until he builds. California desert land is still very hot. My buyer will still make a lot of money. But if he fails the payment, I will foreclose and get the land back.

Thanks again. Would appreciate anybody with additional comment?

Re: 2% a month is legal if seller carry back. - Posted by usury laws

Posted by usury laws on March 21, 2006 at 19:03:25:

24% may be an OK rate for an unsecured credit card but not for a secured loan on a property.

You might want to read about HOEPA–Home Ownership and Equity Protection Act of 1994 and also check out the usury laws for your state.

http://www.ftc.gov/bcp/conline/pubs/homes/32mortgs.htm