Do I need a license to buy Mortgage notes?

Question

Do I need a license from my home state to buy mortgage notes? Do i need to be licensed in the state where the real estate is located for the mortgage one is buying? Thank you in advance.

Chris Seveney · Answer

@Carlo D. If you are getting started and are in New York, I would not recommmend you buy in New York

Start in a place like Michigan, Tennessee, Missouri or Mississippi. New York is the most complex and challenging state to own notes

Many still do it there as there is no competition, but it’s absolutely not for the faint of heart.

Ivan Terrero · Answer

@Carlo D.

No, you might need one in Georgia.

Carlo D. · Answer

Thanks @Chris Seveney.

It's the licenses that turned me off. Between all the licenses I already carry for my current business endeavors in different states, I'm not too keen on adding another set of licenses I would need to possibly study, apply for and take a test for then maintain with CE credits in an industry I'm not even sure I want to take on with any meaning volume.

Carlo D. · Answer

Thank you to everyone that responded and helped me determine that this is not the way I want to go.

Lauren Sanford · Answer

@Carlo D. We been in the space since 2010 and on one of our "Real Estate Notes Show" episodes we discussed this specific topic.  Yes certain states require a debt license even if you use a license servicer.

However sometimes it depends on how your company is structured.  If you want to learn more let us know.

You can also learn more via NMLS

https://mortgage.nationwidelicensingsystem.org/slr/SitePages...

Jason Giomboni · Answer

Whether you need a license to buy mortgage notes depends on the specific regulations of your home state and the state where the real estate is located. Here are some key points to consider:

1. Home State Licensing Requirements: Some states require individuals or entities that buy mortgage notes to be licensed, especially if you are buying them as part of a business or investment strategy. It is important to check with your state’s regulatory authority to understand the specific requirements.

2. State Where the Real Estate is Located: In addition to your home state, the state where the real estate securing the mortgage note is located may also have its own licensing requirements. Some states have specific rules for buying, selling, or servicing mortgage notes that you must adhere to, even if you are out-of-state.

3.Federal Regulations: While state regulations are the primary concern, be aware of any federal regulations that may apply, particularly if you are dealing with notes related to federally insured mortgages.

4. Consult a Professional: Given the complexity and variability of these regulations, it is advisable to consult with a real estate attorney or a professional specializing in mortgage notes to ensure compliance with all applicable laws.

For detailed and accurate information, please contact your state’s regulatory authority and seek professional advice.

Jason Wray · Answer

Carlo,  Check out this outher Bigger Pockets thread to help answer. https://www.biggerpockets.com/forums/70/topics/781713-licens...

Do I need a license to buy Mortgage notes?

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