Table Funding - Brokers using their own name then assigning Note / DoT

[Lupe Santiago]

Hi,

There is an individual I know that is trying to get me to fund a note that he is brokering. He structures the transaction so that the Borrower executes the Promissory Note and Deed of Trust in favor of the individual, then simultaneously I fund the escrow and individual assigns the Note / DoT to me. I am operating as a sole proprietor / individual investor.

Is this legal in CA? I've read various discussions that it's illegal to do this in CA. Does it matter whether the true lender (me) is an institutional investor or not? I can't find the applicable statutes within the CA Dept of Real Estate's statutes.

Does a broker's license allow him to structure this kind of transaction?

Please take a look at this article explaining how table funding is illegal in CA effective January 1, 1999. I've also read other forums where people say that it IS in fact illegal, but like all discussion on the internet, details are absent as are citations to actual law.

http://realtytimes.com/rtpages/19981008_tablefunding.htm

Thanks!