Posted by John Merchant on June 18, 2007 at 16:26:24:
Where is the property securing the note?
And where does the borrower reside?
The legal venue (and relevant law)would be one or the other states, and if it’s a RE loan/note, I’m thinking the law would be the state of the RE’s location.
That’s the law you’d want to check to see if a recourse loan has been ruled to be a loan.
There was actually a quite similar court decision in State of WA a few years back where the note was ruled to be a usurious loan because the unsuspecting note buyer did demand and get note seller’s recourse.
While it’s possible usury could be an issue, nothing normally to involve the SEC or any state sec. agency.
Since it’s not a registerable “security” if it’s a RE note, no securities agency, fed or state would be involved.
RE notes are “securities” in the strictest sense of the term, but are normally exempt from Fed and State Sec. registration laws.
Unless the offeror/seller is offering them to multiple buyers simultaneously in “partial” interests, which could bring them back into registerable securities…