Posted by John Merchant on April 01, 2005 at 11:26:30:
River’s right re residential loans, so care must be taken to make sure licensing regs are obeyed.
But in world of commercial or investment lending, no such laws apply generally, and on a true business/commercial/investment loan, I know of no state (there probably are some, so be careful here) that licenses or really regulates these loans.
Meaning that Lou Lender, in AZ can probably loan to Bob Borrower in CA with NO regs, if it’s a true commercial or business loan, with whatever interest rate and terms as may be mutually agreed upon.
Can’t be just a disguised residential or consumer or personal loan that’s just labeled a business loan.
Courts around the country have overturned those and severely penalized the lender as having made usurious, or unlicensed loans.
I was wondering what the rule is about using a private lender from a different state? (than where I buy real estate) Is it legal? and if it is, are there certain rules to adhere to?
Re: private lending across state lines - Posted by River City
Posted by River City on April 01, 2005 at 06:33:10:
The lender just has to be licensed or authorized to lend in that state. Each state has their individual laws governing mortgage transactions. That is one thing that makes it difficult for “private” lenders to do mortgages in multiple states. They have a myriad of laws to wade through and keep straight. What is ok in one state may not be ok in another.