Is a Securities License Required to Sell a Private Mortgage Note?


if they're gonna sell it to a note buyer

I mean they don't have to have

securities license absolutely not

absolutely not because the issue you're

running into there is its securities

license there are a lot of Isis

securities license can be as simple as a

Series seven broker dealers license or

series 65 registered investment advisors

license little too common ones we see in

those scenarios it's very possible that

the fund manager could be required to

get there as here 65 and become a

registered investment advisor but simply

transacting in that situation the sale

of one's own loans it would not trigger

this the broker dealer regulations

because broker dealers are people who

sell securities let me have others and

are compensated for that via Commission

it's not really the case in that

scenario and so they're movies of

economics carry back via via a second

tranche or a servicing strip but it's

not really it's not only viewed as a

true securities transaction in that

respect that I'm brokering you know

securities on behalf of other people now

we have seen this strange fact pattern

where there's an intermediate

intermediary out there who will sell

loans on behalf of other people and that

becomes a very trend other tricky area

to navigate because if they earn a


you know on the lending side it's

probably gonna be governed by a lending

license like at the area license but

arguably you'd also be you know giving

investment advice possibly being a


so you'd be very careful there so if I'm

a California private lender and let's

say I haven't even funded the loan yeah

let's say I just want to refer one you

know another lender that I know and and

refer the sale of a closed loan an

individual investor that's mm-hmm would

I be considered like the little car

dealer yeah possibly might not forget us

possibly I don't want to say yes that

every fact pattern is different I've

seen that issue come up and it

oftentimes compas comes up more not on

individual transactions but more when

you're dealing with the sales loan tape

and it is a very very nuanced issue and

I I can't like give you a blanket answer

because every time we see it it's

different and most of the time when we

see it it's someone selling their own

paper it's very rarely someone is

selling paper on behalf of somebody else