I am being barraged by questions regarding commercial lending and the need or not to be licensed. The area is not as grey as you may think. The problem is many commercial lenders disguise what would otherwise be a RESPA loan on a 1-4 family – by using LLCs. These lenders and brokers are completely ignoring the legal doctrine of beneficial ownership. And many times these lenders and brokers actually believe that no auditor or regulator has ever seen this scheme before. Really?
I believe that the best business practice for any person originating any kind of mortgage residential or commercial – is to obtain the proper license first.
RESPA is applicable to all “federally related mortgage loans,” except as provided under 1024.5(b). “Federally related mortgage loans” are defined as: 1.A loan secured with a first or subordinate lien on residential property 2.Where a one to four family unit…
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