| SAFE Mortgage Licensing Act | | | | compensation or gain. Assist a consumer in obtaining |
| How The Act Affects Real Estate Investors | | | | or applying to obtain a residential mortgage loan by |
| Real Estate investors contend with all sorts of laws | | | | advising on loan terms (including rates, fees, other |
| which are different in every state and county. One | | | | costs), collecting information on behalf of the |
| way this has been done by the states is to require | | | | consumer. |
| certain activities to be performed only by licensed | | | | Taking an application also means receipt of an |
| persons. | | | | application for the purpose of deciding whether or not |
| Examples of this are the licensing of Realtors, | | | | to extend the requested offer of a loan to the |
| Contractors, and others. The affect of the licensing of | | | | borrower, whether directly or indirectly. Plus a number |
| any area creates a barrier for others to perform | | | | of other requirements. |
| those same activities. | | | | This act is to protect the end user (borrower - to be |
| License requirements are more about what is required | | | | owner). It does not apply to commercial deals. |
| by the licensed person and what they can and cannot | | | | This license does not apply to the real estate investor |
| do than they are about who can't do the particular | | | | when they are buying a property. |
| activity. | | | | It applies when the investor sells a property to an end |
| Fortunately, real estate investors are very creative. | | | | user and when that end user applies for residential |
| Since their investing actions are not restricted to just | | | | mortgage loan. |
| activities that realtors or contractors or loan officers | | | | The real estate investor may buy from anyone and |
| do they always find ways to avoid license activities. | | | | sell to anyone that is NOT a end user (borrower - to |
| This new Loan Originator License will be required by | | | | be owner) who applies for a residential mortgage loan. |
| every state. This is a mandate from the federal level. It | | | | Thus the real estate investor may buy, sell to a |
| was part of "The Housing and Economic Recovery | | | | wholesaler or another investor, buy and sell any |
| Act". It is called the "SAFE Mortgage Licensing Act". | | | | commercial property, and anything that does not |
| Every state has until the end of 2010 (or before) to | | | | involve a residential mortgage loan. |
| create and enact a license requirement for mortgage | | | | This does give the real estate investor problem with |
| loan originators. | | | | subject-to, wraps, and investor taking a 2nd mortgage. |
| It states that "Only" Licensed Mortgage Originators | | | | Be sure to check with the license requirements are for |
| may take mortgage loan applications, offer or | | | | any state that you are going to do business in. |
| negotiate terms of a residential mortgage loan for | | | | |