Buying Defaulted Mortgages – ‘Do I need a license to buy Defaulted Mortgages?’
August 29, 2008 by notebuyingprofits.com
Filed under FAQ, Note Buying 101
Buying Defaulted Mortgages – Any licensing requirements here?
Note: this post has been edited.
Licensing will increasingly become an important issue that regulatory agencies will begin to review, in my opinion. There are 3 types of licensing that may or may not apply to you in the note buying industry, depending on where you are buying, where your company (or you) reside, and what types of activities you’re doing:
a) license to purchase notes (there are a dozen states, including California and Illinois among others, that have licensing requirements governing how you buy notes and mortgages);
b) licensing related to collection agencies;
c) mortgage servicing licensing. Additionally, certain states are beginning to draft legislation that would require anyone performing a loan modification to be licensed under (a) above (e.g. the license to purchase or originate notes and mortgages in many cases is the same as the license to modify these notes and mortgages).
Most states, however, given the above information, do not require a license for you to purchase an existing note and mortgage.
And there are many servicers and/or collection companies that you could sign up for that could carry out collection activities against your loans that you buy. You will want to maintain a close eye (and say) in how they work these loans out for you, of course, and there is noone who can do it better than you can yourself, however you should learn what regulations apply to your specific state in terms of the servicing and origination regulations that govern your activities.
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