Family and friend loan

[Horacio Gutierrez]

Hello,Say someone like family member or friend or coworker lends you money with a fixed interest for down payments on rental properties and the rest the banks finances it to you. Would the sec rules apply here and you need to do all this legal paperwork or it will just be treated like a promissory note you made with them. Also, say that the person defaults on the the loan and the bank foreclosure s on it, what happens to the family loan can they put a lien on it and have the bank pay them back there down payment or when the bank sells the home they get some momey bank or they loosse there money ?