After calling everyone and their brother in the New Jersey Dept of Banking and Insurance, I finally got someone who knew what type of license is required to take back mobile home notes in NJ. You MAY need a license… or then again you may not… read on.
If the CASH PRICE of the transaction for the mobile home buyer is UNDER $10,000, you will need a license. If it’s over $10,000 you don’t. I thought I heard it wrong, it must be the opposite. But no…that’s the way this early 1960’s law is written. The law is called the “Regional Installment Sales Act”. It was specially aimed at used car dealers selling low priced cars to low income people with abusive terms. New Jersey wants to regulate that transaction. I even had the Banking Dept email me a confirmation of it to be sure I understood it correctly.
EXAMPLE: You sell a MH for $9,000 and take back a note for $8,000. You need a lender’s license. You sell the same MH for $10,000 and take back a note for $8,000, you do not need a lender’s license.
In New Jersey that is not much of a problem because almost all retail MH deals have cash prices of over $10,000. If a similiar law is in effect in many low cost areas of the country, this could be a problem when you try to enforce a note that has gone bad.
Posted by John Merchant on September 17, 2004 at 22:45:04:
Do us all a favor and put the NJ statute’s legal citation, Volume, Section number, page, etc., online here so we can all see what it says. It’ll be something like 25 NJ Statutes, Section 45, Art. 33.
Hard to believe that a state is trying to tell an owner what he/she can or cannot do in reselling his own property! Amazing.
What happens if the note holder sells the note and you buy it? I would
assume there is no regulations covering the secondary market as there
is no sale of the MH in this case.
John,
Are you currently doing Lonnie Deals in New Jersey? If so, would you mind if I e-mailed you with a few questions? I’m just starting up in the business.