In California, along with most other states, private money lenders are subject to various rules and regulations at both the state and federal level. If you are interested in applying for a hard money loan, it is important to have an understanding of these regulations so you can get a sense of whether this type of financing is in your best interest.
If you are interested in a hard money loan to purchase a single-family home, whether it is owner-occupied or non-owner occupied, expect the loan to be subject to real estate licensing and regulations. However, for other property types of properties, the rules and regulations will differ based on the property, the type of loan, purpose of the loan, along with other factors.
California is unique in that it requires individuals engaged in making or arranging private money loan transactions to secure and maintain state licensure. This is an important factor when assessing whether to apply for funding with a particular lender. If the lender is vague about whether they have proper state licensure, it represents a red flag and an indication that you should seek a more reputable hard money lender in Los Angeles.
Hard money lenders in Los Angeles are obligated to secure licensure through either the state or the National Mortgage Licensing System (NMLS). In addition, the California Bureau of Real Estate issues licenses for real estate brokers. This license, in combination with the mortgage loan originator endorsement, is generally required by the NMLS and the SAFE Act for hard money lenders who are involved in a transaction involving residential property.
If you are interested in purchasing a piece of property that is subject to foreclosure, you need to be cognizant of specific laws that can impact whether your pursuit would be possible. For example, California is one of a few states that provides a statutory grace period of more than three months to borrowers before they are foreclosed upon. In addition, when a lender decides to foreclose on a property, they are legally obligated to personally contact borrowers and discuss alternatives to foreclosure. Only after the expiration of three months, the foreclosing party will need to record a notice of sale and mail a copy to the borrower at least 20 days prior to the sale date of the property. Hence, the sale of a foreclosed property in California cannot be completed any sooner than three months and 20 days after the recording date of the notice of default.
Have Questions about Working with a Hard Money Lender in Los Angeles? Contact PB Financial Group Corp Today
As you can see, there are an array of rules and regulations governing hard money loans and related real estate transactions. One of the most important regulations is the licensure of a hard money lender. PB Financial Group is a premier direct hard money, private money and bridge lender, who has been providing quick funding since 2006 and have funded over 2700 hard money/private money loans. Our objective is to work to satisfy your financing needs on important real estate projects throughout California in an efficient and effective manner. To schedule a consultation or for further information please contact PB Financial Group at 877.700.3707 or visit www.CalHardMoney.com to learn more.
PB Financial NMLS #357614/DRE #01522495