Posted by Michael Morrongiello on August 04, 2005 at 11:38:45:
Mike:
It depends on the laws in your state regarding making loans and lending money.
Mike:
The occasional loan made be an individual to a property owner may not fall under licensing requirements. However if its an owner occupied home, it may still have to adhere to “predatory lending” laws.
Michael Morrongiello
Note worth question - Posted by Mike (Seattle WA)
Posted by Mike (Seattle WA) on August 03, 2005 at 13:49:59:
Hi - I’m creating a note for someone right now and want to make sure I’m not screwing up a potential future sale.
12% interest on 30K secured 1st position by his home (Owner occupied).
25% LTV w/10 Year term.
Credit not good - in the low 500s.
Any other info I should post - and after some seasoning (6-12 months), do you think I could get par or above?
Orignation Vs Seller financed - Posted by Michael Morrongiello
Posted by Michael Morrongiello on August 03, 2005 at 14:58:02:
Mike:
Are you ORIGINATING this Note as a Loan against this individuals home and personal residence?
This sounds like a “refinancing” and If so, you may be subject to State and Federal Regulatory, disclosure, and predatory lending requirements.
Notes created as the result of a bonafide SALE of a property (eg. seller carry back or seller financed Notes) are “clean” and typically exempt from the worries outlined above.
If the Note being created is Subject to such requirments, and the requirements were not propertly met, any future assignee (purchaser) of such a loan would have to look at it as “damaged goods”.
Best to your success,
Michael Morrongiello
Re: Orignation Vs Seller financed - Posted by Mike (Seattle WA)
Posted by Mike (Seattle WA) on August 03, 2005 at 23:37:22:
OMG. And I learn another lesson. Yep, I was going to take a lien against the property and give him some money. I have a broker friend who could write it up for me if that matters. But, wow, I’m glad I asked first. If the licensed broker creates the note and sells it to me, is it then clear?