being the lender on a mortgage

[Richard Glen]

In Cook County Illinois.

Can I do this?

I am considering giving a loan to a guy that bought a two flat for cash and is stalled 1/2 way with his rehab for lack of cash.  It will be a owner-occupied two-flat but he can't do a 203k because it is not habitable.  Portfolio lenders have similar issues in providing him with a construction loan.

Ideally the loan would be a properly recorded mortgage with a lien such that it would be paid off when he completes his project as part of the refinance.  I don't want the refinancing lender to have any concerns that it clouds title after closing.

In Illinois, there is an additional requirement to record either a Certificate of Non-Predatory Lending (if you are a bank etc) or a Certificate of Exemption for Non-Predatory lending.

One attorney has told me that I cannot record a mortgage without having a mortgage broker license. However how do hard money lenders do this then?

Perhaps I just need to find the right attorney or mortgage broker to help with this?

Here are a few links:

https://www.ilapld.com/Overview.aspx

https://www.idfpr.com/FinLit101/SB1167/PrivateMort...

https://www.idfpr.com/finlit101/SB1167/SB1167FactS...

[Richard Glen]

Success!

If someone says it can't be done, but can't give a cogent reason why, they are often wrong.  : )

I had to call about 15 attorneys before finding one that understood the process in Illinois and then identify a title company that would take care of the certificate of non-predatory lending exemption and title insurance.

The process is pretty straightforward:

• Have your attorney draft the mortgage
• Have your attorney work with the title company (In Illinois National Title Solutions will insure you to be in the first lien position)
• Close with your borrower

The borrower paid all costs out of their loan amt at closing:

• Title insurance: $600 (included cert of non-preditory lending exemption)
• Closing fee: $300
• Recording fees: $90
• Attorney's fee: $750

I'm happy to provide details if anyone is interested.