Lending Compliance

Lending Compliance

Your business faces unique issues. You have probably been frustrated when working with other law firms who do not appear to understand your business. They may be confused by the fact that you make business purpose loans secured by residential property and think that these are consumer loans. They may treat your transaction like a large commercial real estate loan when the transaction is much less formal and sophisticated. Our experts are here to provide you the compliance support you need to have peace of mind.

50 State Compliance

Are you scaling a nationwide lending business? Are you struggling to find answers about whether your business needs to be licensed to make, broker, and service loans? Are you worried that your loan terms are not compliant and may be unenforceable? We built our business by partnering with the largest nationwide lenders to be their expert legal counsel.

Geraci maintains an extensive 50 state research library with readily available answers to all of the following questions:

  1. Is a license necessary to:
    i. originate,
    ii. broker,
    iv. service,
    v. buy,
    vi. sell, or
    vii.own mortgage service rights but not service (i.e. retain subservicer)a business purpose loan secured by 1-4 family, commercial, or multifamily property?
  2. Is table funding permitted and are there any relevant exceptions/exemptions?
  3. May an unlicensed lender fund a mortgage loan processed through a licensed 3rd party?
  4. Is a separate license required if the loan is a subordinate position loan?
  5. What are the relevant usury limits or maximum default rates in each state?
  6. Are there any relevant late charge or grace period restrictions?
  7. Does a Mortgage Lender need to conduct a foreign registration in another state if their activity in the state only includes making, securing, and enforcing loans from another state?
  8. Can a lender use a foreign choice of law to govern the loan documents, particularly over usury?
  9. What is the typical timeline to foreclose in the relevant state?
  10. Who is capable of acting as trustee in the state if it is a Deed of Trust state?
  11. Which states have preferential lending laws?

Beyond our research library, Geraci LLP has partnered with more than 30 outside counsel law firms throughout the country to be able to provide compliance advice in all 50 states and be your one-stop solution for your business. You will have us as your single point of contact rather than trying to engage law firms throughout the country who may or may not understand your business.

Federal Compliance

Think that federal consumer laws do not apply to business purpose loans? Think again. Federal consumer laws such as the Equal Credit Opportunity Act (ECOA), Home Mortgage Disclosure Act (HMDA), Fair Housing Act (FHA), Fair Credit Reporting Act (FCRA), Servicemembers Civil Relief Act (SCRA), and other consumer laws all apply to business purposes loans. Our experts are here to help with your compliance questions.

Consumer Lending Compliance

Trying to stay up to date with the CFPB’s daily whims can be exhausting. Are you staying up worried that your consumer loans are compliant? TRID, high-cost loans, consumer bridge loans, and HELOCs, all have a myriad of compliance risks and advice. Our team of compliance experts can make sure you can sleep at night knowing that your lending practices are sound.

California Compliance

California Department of Real Estate Compliance (California Real Estate Brokers)

Are you a real estate broker in California who is frustrated by the fact that the laws are always changing and you are worried that you are not complying? Did you know that California Real Estate Law places significant restrictions on construction loans, places limits on grace periods and maximum late charges, and imposes maximum loan to value limitations based on the collateral property type? Did you know that you need to send a report to the DRE if you fractionalize a single loan to multiple investors? Stop guessing, and have peace of mind knowing that our team of experts advises brokers in California on all aspects of their business. Some of our common services include:

  • Borrower and Investor Disclosure Preparation, Review, and Compliance
  • Threshold Broker Reporting Requirements
  • Trust Account Compliance
  • Loan Document Preparation, Review, and Compliance
  • Loan File Audits to review for Regulatory Compliance
  • DRE Enforcement Action Response, Negotiation, and Representation
  • Procurement Agreement Preparation, Negotiation, and Review
  • Broker Agreement Preparation, Negotiation, and Review
  • NDA/Non-Solicitation Preparation, Negotiation, and Review
  • Broker Servicing Compliance, Inclusive of Preparation, Negotiation, and Review of Servicing Agreements
  • Website and Advertisement Review and Advice



California Department of Business Oversight Compliance (California Finance Lender Law)

As a California Finance Lender, you have a powerful license that permits you and your team to work directly with borrowers and make loans which are afforded significant protections. Because great authority is provided under this license, California does highly regulate the practices of finance lenders. For example, unlike the DRE regulations, all team members must be employees and cannot be independent contractors. Also, unlike the DRE, the DBO has automatic mandatory forced audits. Additionally, the DBO has strict constraints regarding the ability to sell loans. We have significant expertise and experience navigating the nuances of the statutes and regulations governing CFLs, including deep industry contacts. Some common services we provide for CFL licensees include:

  • Borrower Disclosure Preparation, Review, and Compliance
  • Loan Document Preparation, Review, and Compliance
  • Loan File Audits to review for Regulatory Compliance
  • DBO Reporting Advice, Best Practices, and Mock Audits
  • DBO Enforcement Action Response, Negotiation, and Representation
  • Loan Sale Advice, Document Preparation, and Negotiation
  • General Regulatory and Corporate Structuring Advice
  • Website and Advertisement Review and Advice
  • Third Party Agreement Preparation, Advice, and Negotiation Such as Broker, Correspondent, Participant, etc.

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