Can Anyone Tell Me Which States I Cannot Execise An Option?

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I know in North Carolina you must have a real estate liscense to buy and sell real estate, however in other states you may secure an option. I want to know which states I can excerise an option w/o a real estate license.

Comments(26)

  • cjmazur29th October, 2008

    read the exceptions to the rule..

    In CA "you need a license" unless you are active on your own account.

    So if I buy/sell real estate for my self, I do not need an agent.

    Look for the loop holes.

  • JohnLocke29th October, 2008

    theregisterfiles,

    Glad to meet you.

    You do not need a License to buy and sell real estate in North Carolina as long as you are a Principal in the deal.

    John $Cash$ Locke
    [addsig]

  • ITBInvestor12th February, 2010

    JohnVonBrawn, sorry, but the statement "HUD has proposed to eliminate ALL seller financing unless the seller lives in the home or becomes a licensed mortgage originator" is not what this is about.

    The bill says "[i]... The commercial context implied by the taking of an ‘‘application’’ is also absent where an individual seller provides financing to a buyer pursuant to the sale of the seller’s own residence. The frequency with which a particular seller provides financing is so limited that HUD’s view is that Congress did not intend to require such sellers to obtain loan originator licenses. Accordingly, this rule would provide in § 3400.103(e)(5) that such individuals are not subject to State licensing requirements."

    If you are not brokering mortgages, this bill does not pertain to you.

  • NewKidInTown313th February, 2010

    Furthermore, the Secure and Fair Enforcement Mortgage Licensing Act of 2008 (SAFE Act) was enacted into law on July 30, 2008, as part of the Housing and Economic Recovery Act of 2008.

    HUD is not proposing to restrict seller financing. It is already restricted by law. This proposed regulation is just codifying how HUD will implement the responsibilities imposed upon them under the SAFE Act.

    If you are attempting to start a letter writing campaign to change the law, you are too late.[ Edited by NewKidInTown3 on Date 02/13/2010 ]

  • ITBInvestor19th June, 2010

    Well... see also http://www.hud.gov/offices/hsg/ramh/safe/safeact1.pdf

    This may be a state law implementation issue. NC Legislature repealed Article 19A - Mortgage Lending Act. (http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_53/Article_19A.html) and now has Article 19B, The Secure and Fair Enforcement Mortgage Licensing Act. http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_53/Article_19B.html

    From http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/BySection/Chapter_53/GS_53-244.040.html:
    (d) The following are exempt from all provisions of this Article except the provisions of G.S. 53‑244.111 (Prohibited acts):
    Any person who, as seller, receives in one calendar year no more than five residential mortgage loans as security for purchase money obligations, unless the United States Department of Housing and Urban Development has expressly and definitively determined that such persons are loan originators as the term is defined by § 1503 of Title V of the Housing and Economic Recovery Act of 2008, Public Law 110‑289, and such determination is in effect on July 31, 2010.

    Prohibited acts are things like concealing the material facts, engaging in unfair, misleading, or deceptive advertising, etc. http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/BySection/Chapter_53/GS_53-244.111.html

    This bill was not meant to kill REI selling their own properties. At least in NC this is the case.

  • LeaseOptionKing19th June, 2010

    I thought the states had to at least mirror the federal law. Five properties in NC is still a restriction for an active investor. Texas passed a very strict version.
    [addsig]

  • LeaseOptionKing19th June, 2010

    If it covers Land Contracts/Contracts For Deed (as my attorney says it does), the implications will be far-reaching beyond the scope of your analysis to interpret.
    [addsig]

  • LeaseOptionKing25th July, 2010

    Of what use is a mortgage broker in a wraparound mortgage situation or a land contact? And what incentive would one have to even be involved...except for maybe the hope for a future refinance. This law is intrusive and violative of private property rights. The push is to eliminate FSBO selling altogether, which would give realtors and mortgage brokers a monopoly.
    [addsig]

  • ITBInvestor25th July, 2010

    On 06-19-2010 I said "I still think this only applies to brokers and originators, not principals" and I stand by that post.

    LeaseOptionKing appears to be from Georgia. Let me look at Georgia state law http://www.legis.state.ga.us/legis/2009_10/versions/hb312_HB_312_AP_8.htm. 7-1-1001. Regarding "The following persons shall not be required to obtain a mortgage loan originator, mortgage broker, or mortgage lender license and shall not be subject to the provisions of this article"... Exemption 8: "Any natural person or the estate of or trust created by a natural person making a mortgage loan with his or her own funds for his or her own investment, including those natural persons or the estates of or trusts created by such natural persons who make a purchase money mortgage for financing sales of their own property;"

  • LeaseOptionKing25th July, 2010

    To summarize, Paragraph 8 that you quoted just provides exemptions from licensure as a mortgage broker or mortgage lender only. A mortgage loan originator license would still be required.
    [addsig]

  • LeaseOptionKing25th July, 2010

    So the only true exemptions are in Paragraphs (3) certain loan originators, (4) family member, (5) attorney, (6) real estate broker or sales agent, and (10) primary residence.
    [addsig]

  • LeaseOptionKing25th July, 2010

    One last thing--this is the part that threw you off (well, this and not reading further down), and make note of the last part:

    (a) The following persons shall not be required to obtain a mortgage loan originator, mortgage broker, or mortgage lender license and shall not be subject to the provisions of this article but may be subject to registration or notification requirements, unless otherwise provided by this article:

    Like most laws, you really have to know how to read through double-talk and long-winded gibberish. This is the part that makes the statement not really apply except for those few exclusions listed in my last post:

    "unless otherwise provided by this article:"
    [addsig]

  • LeaseOptionKing25th July, 2010

    I think you will have trouble finding an attorney to do those three deals if to owner-occupants. And what the S.A.F.E Act does is make us all loan originators in those instances.
    [addsig]

  • LeaseOptionKing26th July, 2010

    Your attorney is going to violate federal law, itb? Really? Interesting. I do see your points, Eric.
    [addsig]

  • ITBInvestor27th July, 2010

    Like you said in your 06-17-2010 post, "States either created their own law last month (or before) or now have to defer to the federal law."

    Quote:
    On 2010-07-26 12:32, LeaseOptionKing wrote:
    Your attorney is going to violate federal law, itb? Really? Interesting. I do see your points, Eric.

  • ITBInvestor27th July, 2010

    I also agree with eric3. I think everyone can (probably) agree that regardless of the state, using a Registered Mortgage Loan Originator will satisfy the legal issue regarding origination in SAFE for owner financed property. Using a RMLO may be beneficial in the unlikely case that your buyer stops paying and you need to foreclose on them.

  • LeaseOptionKing29th July, 2010

    I apologize to the TCI community if I have appeared to be argumentative during this discussion. That was not my intent. I only wish to give attention to the S.A.F.E. Act so that investors can know about it; it snuck up on many of us and left a lot of people unaware.

    _________________
    "A deal is only as good as the quality of your Contracts." --Me[ Edited by LeaseOptionKing on Date 07/29/2010 ]

  • jfmlv195029th July, 2010

    Hi Guys,

    I hope you don’t mind me chiming in here and probably muddy the waters even further.

    Under SEC.1503 Definitions (3) Loan Originator (A) (i) (II) offers or negotiates terms of a residential loan for compensation or gain.

    Since I do my own deals and do my own negotiating with my buyers and sellers, I feel that this would be me.

    Then if that is the case, anyone I employ to take an application, close the deal including any attorney, licensed mortgage broker, real estate agent etc etc etc would fall under
    Sec. 1503. (3) (A) (i) (II) (ii) (i) and who performs purely administrative or clerical tasks on behalf of a person who is described in any such clause. (Would not need to be licensed since they are only performing clerical duties in my behalf)

    In other words since I am the investor who is profiting from this transaction, it doesn’t matter who I have doing the pen and ink stuff…since I am profiting, I must be licensed.

    If this law is to be interpreted this way, I think we all may have an issue.

    John (LV)
    nullnull[ Edited by jfmlv1950 on Date 07/29/2010 ]

  • LeaseOptionKing29th July, 2010

    Thank you, John, for chiming in. My attorneys (both female and both brilliant) said pretty much the same thing; they said if HUD wanted to interpret strictly, that HUD had the power to do just as you describe. I was also informed that if I do anything resembling taking an application or if I check credit myself, that I would fall under the strict interpretation of the Act. I would also like to add that the misdeamenor applies per incident.
    [addsig]

  • jfmlv195029th July, 2010

    LOK

    How lovely.


    John (LV)

  • jfmlv195029th July, 2010

    They need to go back to the drawing board with this mess and come up with something that might actually work.

    John (LV)

  • jfmlv195031st July, 2010

    LOK

    As far as I am concerned all I need is the person’s name which can be done on a cocktail napkin and the “correct” down.

    I already know his credit is trash or he wouldn’t be dealing with me. (LOL)

    John (LV)

  • jfmlv195031st July, 2010

    We did the No Credit Check one better.

    For years, John Locke and I would actually check a person’s pulse to see if they were alive, since one of our mottos was ”If your heart beats, your credit is good with me”. And as long as they had the “correct down”, they were approved.

    Always a lot of fun seeing the expression on their face when asking to do a credit check and all you do is check their pulse…and then telling them that they are approved.

    Relieves a lot of pressure off them and sets the right mood for the sale.

    Helped out a lot of good people with bad credit doing business this way.

    John (LV)

  • jfmlv19502nd August, 2010

    Eric,

    Let me try to explain WHY we feel this way and maybe you can then understand the reasons why we are taking this stance.

    First of all we all agree that this bill is poorly written.

    Second there are so many acts, proposals, interpretations and state rewrites that all say different things, there is no way to keep up with this thing.

    Third and probably most importantly is that there are different types of “eyeballs” looking at this thing. Yours, being the conventional mortgage lender, has one way of looking at this. While we, the experience creative investors, look at this in a completely different light. The reason I say experienced is because we are not newbies. We have been up and down the street. We know the effect of what happens whenever we do something. We have won in court because of our experience and correctness in our work. We are the teachers. In other words we know what we are doing.

    One of the biggest differences I would say is how we look at the role of the mortgage lender in a seller financing environment. I for one don’t need one or the services of one, nor do I need to pay one just to put some persons name down on a piece of paper. To me that person is just the paper shuffler who is already exempt from this bill.

    I am the seller and this is seller financing. This is MY house and I am the bank. I will sell it to whomever I please any way I please. And I am VERY capable of handling my OWN paperwork.

    John (LV)

  • LeaseOptionKing3rd August, 2010

    The problem with a Sec. 1983 suit is that there must be an injured party first. Here is what Sec. 1983 says about jurisdiction:

    JURISDICTION
    In order to state a claim under § 1983, a plaintiff must allege a violation of rights secured by the Constitution or laws of the United States, and that such violation was committed by a person acting under the color of state law.

    This is the key: "and that such violation was committed by a person acting under the color of state law." So someone would have to attempt to deprive us of our property rights by trying to enforce the S.A.F.E. Act, making us effectively an injured party under the color of state law.

    [addsig]

  • jfmlv19503rd August, 2010

    I have used 1983 in the past and agree that there must be an "injury". I was just looking for an opinion of your attorneys at this point.

    So to get an "injury", do you want to volunteer to be the first one arrested and fined for violation of the Safe Act or should I? (lol)

    John (LV)

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