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When a seller carry's the loan, do you need a MLO Licence?

By
Real Estate Broker/Owner with Note Builders, Inc. Keller Williams

 

Seller financing would include under the definitions of the SAFE Act, Carrying all or part of the purchase to a buyer of the home, a wrap around loan, AITD, lease option, lease purchase, contract of sale!

The Safe Act final rule became law August 29 2011. One of the new laws  agents may be exempt from the necessity of having a MLO licence depending on the laws that were passed in your particular state. Each state has it's own version of the SAFE Act. In California it is SB36.

Agents crossing the line into the seller financing world should study up on these laws before giving advice to make sure they are not engaging in MLO activity. Fore sure any agent or seller engaged in the business of offering seller financing (Business not defined), needs to have an MLO endorsement. NAR's opinion is if you are negotiating the seller financing in the normal course of business you are probably ok.

The point is with the passage of the SAFE Act and Dodd Frank. the line is very Grey on offering advice and negotiating terms to these types of transactions. There is also a higher standard of care that has been incorporated into these laws under the guise of "consumer protection" As an agent there is no more room for error or ignorance. The NAR final rule opinion letter is on the link below.

 

http://www.docstoc.com/docs/92444238/Seller-Financing-Safe-Act-Final-rule-and-Dodd-Frank

 

Note Builders, Inc. Is a licensed MLO Mortgage Loan Originator specializing in compliant seller financing transactions in California. Notebuilders.com

Posted by
Terry Lewis COO
NMLS #517367 DRE#01898702
Yes@terrywlewis.com

Keller Williams, Yes Team
Owner, broker #00686433
Yes@TerryWLewis.com
Cell: 858-699-3139
Fx: 858-345-3726
Alan Kirkpatrick
Austin Texas Homes - Round Rock, TX
Alan in Austin

Terry 

very nice post and good information. You answered some quesitons I had. 

Sep 29, 2011 06:30 PM
Terry Lewis
Note Builders, Inc. Keller Williams - La Jolla, CA
Seller Financing, Lending, Broker

Thank you, Alan & Michele

The link in the post is the actual NAR document. I found it very helpfull.

Sep 29, 2011 06:35 PM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

I very much appreciate the blog.  I have not negotiated a carry back or financing but it could happen.

Sep 29, 2011 06:51 PM