real estate finance - full book (500 pgs)

However individuals can be subject to the usury

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Unformatted text preview: iting practices must be followed. Nevertheless, of all the lenders in the field of real estate finance, the nonfiduciaries have the most flexibility and can take the most risks, which often makes them the only source available to finance certain real estate transactions. PRIVATE LENDERS Although the term private lenders in its broadest sense refers to virtually all non– government lenders, for our purpose a private lender means a person who lends directly to another person. This narrow definition will help to distinguish a private lender from the other forms of noninstitutional lenders discussed in this chapter. 4-2 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 4: NONINSTITUTIONAL LENDERS There is no formal structure to the private lender industry. Individuals ordinarily do not operate in concert with one another. Private lenders have no association such as those found with other forms of lenders and are, at best, highly fragmented and scattered throughout California. An individual may, of course, form a partnership or a corporation, but these are mere business organizations designed to facilitate the operation of the individual's investments into real estate trust deed or mortgage loans. Unlike Institutional lenders, private individuals have fewer laws and regulations that restrict their lending activities. There are no uniform policies; practices, procedures, and policies vary considerable from one private lender to another. However, individuals can be subject to the usury statutes that dictate the maximum interest rate that may be legally charged. Exemptions from the usury law are discussed later in this chapter. TYPES OF PRIVATE LENDERS SELLERS AS PRIVATE LENDERS The single most important source of nonfiduciary finance funds consists of the sellers who finance a portion of the sales price with carry back loans. In fact, seller financing has become the only way many current sales can be...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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