California and New York are the two largest private-lending markets in the country and they take opposite approaches to usury. California writes the ceiling into its Constitution and exempts broker-arranged loans by statute. New York runs two ceilings — civil and criminal — and [...]
Carla Barker v. Rokosz, No. 22-CV-2412 (E.D.N.Y. July 8, 2024) is the federal-court template for the Reg Z business-purpose pierce. The lender required the borrower to form a corporation as a condition of obtaining the loan. The corporation took title. The loan was documented [...]
A business-purpose classification under Regulation Z survives challenge only when the file documents every step of the lender's analysis. Comment 3(a)-3 to 12 C.F.R. §1026.3(a) lists five factors; a defensible file holds five matching document categories. This is the step-by-step build private lenders use [...]
California Civil Code §1916.1 exempts loans arranged by a DRE-licensed real-estate broker from the constitutional usury ceiling — but only when the file proves the broker arranged the loan in substance, not just in name. These seven recurring mistakes are the pattern that piercing [...]
Usury law is the rate ceiling — set by state constitution, statute, or both — above which an interest charge becomes unenforceable, criminally chargeable, or in some states triggers principal forfeiture. For private lenders, the practical question is not "what is the cap" but [...]
Seller financing triggers federal and state compliance obligations that most private lenders underestimate. SAFE Act licensing, TILA disclosure requirements, ATR analysis, and RESPA Section 6 transfer notices all apply depending on how the deal is structured. A third-party servicer handles the compliance infrastructure so [...]
Seller financing is a real estate transaction structure in which the property seller extends credit directly to the buyer, replacing or supplementing a traditional institutional lender. The seller holds a promissory note secured by the property, collects payments, and retains a security interest until [...]
Seller financing gives private lenders direct control over origination terms, underwriting standards, and default remedies — but it also places the full weight of Dodd-Frank, TILA, and RESPA compliance squarely on the lender's shoulders. Conventional mortgages distribute that burden across licensed originators and institutional [...]
Structuring a seller financing deal that survives audit requires eight sequential steps: qualifying the borrower under Ability-to-Repay standards, confirming RMLO exemption status or engaging a licensed originator, issuing Reg Z/TILA-compliant disclosures, setting a non-balloon amortization schedule, recording the lien with a clean chain of [...]
Seller financing gives private lenders speed and flexibility — but seven compliance landmines sit between closing and a performing note. Miss SAFE Act licensing, balloon restrictions, ability-to-repay requirements, TILA disclosures, RESPA transfer notices, recordkeeping, or escrow allocation and you face regulatory enforcement, statutory damages, [...]
