All Forum Posts by: John Bagwell

I am not a note finder, nor have I ever want to note find.

If you don't believe me, then call each state real estate commission, then call each state securities commission, then call the SEC (the feds).

Your life is on the line. Don't screw it up. This is the last reply to this issue I will address.

In addition, other major states such as Florida require you to be a real estate broker to receive commissions from anything related to real estate.

In addition, FINRA belives a note resold to an investor is a security and in such you would also be required to have a series 7 license with the state securities department.

Also, the S.E.C. may require note finders to become an investment advisor since you are giving continous advice of buying and selling of a security.

I would not recommend becoming a note finder unless you had at least one of the three licenses and received a legal opinion from your state real estate commission, banking commission, or securities commission.

My advice...seek a new busines to work in.

I just finished analyzing California. Anyone who does not have a real estate license in the state of California who "note brokers" any California resident is in violation of the Califonia real estate act.

I highly recommend you check each state you look for notes as to whether or not you are in violation of the the real estate or the mortgage brokering acts. In addition, it would be wise to invistigate any miscellaneous business laws which forbid you to receive a referal fee.

If you cannot do note finding legally, then become legal, or get out of the business before the state puts handcuffs on you.

To all Note Finders,
After carefull research on whether note finders need to be mortgage brokers you must look at the legal definition of each state's legal definition of a mortgage broker. My states defination for a mortgage broker is the following:
21(a): "Mortgage broker" means an entity that obtains, attempts to obtain, or assists in obtaining a mortgage loan for a borrower from a mortgage lender in return for consideration or in anticipation of consideration.
Since note finding does not relate to obtaining a mortgage loan for a borrower from a mortgage lender...then I do not need to be a mortgage broker in my state.
But your entire blog discussion did not examine another very interesting law that relates to referral fees related to real estate related transactions. Referral fees can be paid to residents in only the following states:
Arizona, California, Florida, Georiga, Illinois, Indiana, Michigan, Minnesota, Montana, New Hampshire, Oklahoma, Oregon, and Virigina.
If you are doing any note business and earning a referal fee from an investor in any state not mentioned above, you are breaking a completely different set of state laws.

To all Note Finders,

After carefull research on whether note finders need to be mortgage brokers you must look at the legal definition of each state's legal definition of a mortgage broker. My states defination for a mortgage broker is the following:

21(a): "Mortgage broker" means an entity that obtains, attempts to obtain, or assists in obtaining a mortgage loan for a borrower from a mortgage lender in return for consideration or in anticipation of consideration.

Since note finding does not relate to obtaining a mortgage loan for a borrower from a mortgage lender...then I do not need to be a mortgage broker in my state.

But your entire blog discussion did not examine another very interesting law that relates to referral fees related to real estate related transactions. Referral fees can be paid to residents in only the following states:

Arizona, California, Florida, Georiga, Illinois, Indiana, Michigan, Minnesota, Montana, New Hampshire, Oklahoma, Oregon, and Virigina.

If you are doing any note business and earning a referal fee from an investor in any state not mentioned above, you are breaking a completely different set of state laws.