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, [...]
Private lenders need documented servicing SOPs to meet regulatory expectations, protect loan portfolios, and deliver consistent borrower outcomes. The number of SOPs required depends on portfolio size and complexity, but every active lender needs written procedures for payment processing, escrow handling, default response, and [...]
