New Oct 1st Rules Regarding Private Lending?

[Curtis Mears]

I was in the process of lending my father in law some money so he could buy a new house (basically loaning him money until he sold his current house). I was going to put a lien on the existing house as is usual. He spoke to his attorney and the attorney said that as of Oct 1st, 2015, private lenders can no longer lend money and put liens on property, only mortgage banks can have liens. Has anyone heard of this? And if true, how does this effect private investors, and also WTF was the government thinking?

[Jay Hinrichs]

@Darren Eady@Curtis Mears 

disagree with Darren .... in many states its not permissible to originate a loan on a 1 to 4 unit without a NMLS license ... I bet that's what the attorney is looking at.. in some states there is an exclusion for commercial purposes but this is not that.. and in about 12 states it makes no difference if its commercial purpose or not.. 1 to 4 unit owner occ or not requires NMLS license.

So its not a god given right in each state and in each scenario.. there are some exclusions in some states for owner carry back.. but that's not it either and some states will allow you one or 2 but no more than 2 in your portfolio at a time.

So check a little deeper into it... God is not in charge of our mortgage laws the fed then the states are