Selling your own Originated Loans

[Lupe Santiago]

Hello,

If I originate a loan (hard money residential - not for owner occupied dwellings) and then sell the loans to the open market, do I need a separate license? Am I a broker if I'm selling my own loans that I originate?

Thanks and best regards,
L.S.

[Bill Gulley]

If you "originate" or make a cash loan that is exempt from the SAFE Act, you may sell it in the "private" open market, to note brokers or private investors (regardless of them being a "company"). Search for "What do you want Mr. Note buyer" for info.

No, you will find it very difficult if not impossible for an institutional regulated lender or mortgage wholesale banking operation buying a privately originated note. One, it's not under an approved lender, it's not processed or originated by a bonded and insured lender, it's not originated by anyone having proof of underwriting abilities in compliance with the types of loans purchased and blocked in the secondary market and you'll likely be unable to cover any repurchase agreements required.

And if you had to ask the question as to a license, yes, if you are in the business of lending, you need a license in all states. While in some states there are people who may make an occassional loan, but don't fall into the "as a business" category, they may get by without a license, but after awhile you'll likely bump into the license requirements.

Good luck