Hard Money - Know your laws and regulations when lending!

By
Mortgage and Lending with Texana Bank

I'm a member of several REIA (Real Estate Investor Association) groups in our area.  Lately I've noticed the organizers giving attendees an opportunity to stand up and tell everyone what they're doing and what they're looking for in real estate and financing.  Here's where individuals have to be careful with what they say to the audience.  If you're going to speak to groups about financing you had better understand your limits especially if you're unlicensed.

 

First, ignorance of the law is no excuse so check your state's licensing laws and regulations, you should be able to find them on your state regulatory agency's web site.  For the most part lending regulations are covered under federal laws but each state will have details that are sometimes more stringent or varied, check them.

 

Here's what I hear at these REIA meetings that make me shake my head, "I'm a private lender and I have money to lend."  Unless you're a licensed lender you can not announce that you are a lender, pure and simple, that is a violation.  If you want to be a lender, go through the process and get your license.

 

Second, in Michigan, if you make more than 10 loans on residential property in a calendar year you need to be a licensed lender, this includes land contracts.  And if you are servicing (collecting loan payments) on more than 10 loans you need a servicing license.  These are probably the most misunderstood lending laws and most violated amongst real estate investors.

 

I wouldn't be surprised if at some point an investigator from the state shows up at a real estate investors meeting just to hear what's being said and who is saying it, taking down names and numbers and collecting business cards.  Know the laws if you want to lend and if you want to be in the business get your license.

 

Trent Dalrymple

Metro Mortgage Investments    

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Rainer
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Wale Adewoyin
1st Crown Realty Corporation 503-512-6200 - Saint Helens, OR

These services run the real estate market. Where your traditional lender cannot deliver, they service this nitch. I am in no way associated with the industry, but I know they are invaluable in the real estate market. The real estate supplemenatry market so to speak.

Oct 09, 2011 03:48 AM #1
Rainmaker
374,844
Trent Dalrymple (248) 854-0625
Texana Bank - Bloomfield Hills, MI
Allowing Mortgage Professionals to Lend Nationwide

I've been a licensed private/hard money lender for over 25 years, we have always filled the gap left by the banks and mortgage brokers.  Other than cash buyers, the investors who buy and restore vacant bank-owned houses require alternative lenders such as hard money.  My personal problem is the fact that most of my competition is from rogue lenders who are not following the rules and flying under the radar and conducting unlicensed lending.  I think most would agree that when an industry is threatened by unlicensed competition it's the consumer who is the ultimate victim. 

Oct 09, 2011 07:45 AM #2
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Rainmaker
374,844

Trent Dalrymple (248) 854-0625

Allowing Mortgage Professionals to Lend Nationwide
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