Department of Real Estate’s latest Brain Fart.
An explanation is in order here.
You probably don’t spend a lot of time reading the Sacramento Bee newspaper; unfortunately our honorable elected officials do.
It seems some time ago a couple of bad actors up in Nevada County decided they could make a lot of money in the private loan business. They did, too, . . Of course they couldn’t be bothered with following the laws, regulations, or moral constraints. Their idea of a successful business model was promising the moon to investors, taking their $$ and spending it on the lifestyle they wanted to become accustomed to.
Fortunately, they are in jail. The Sacramento Bee wrote a bunch of stories exposing these shenanigans and calling for ACTION!
The Legislature, after being whipped into a frenzy, decided to take action to make sure this wouldn’t happen again. Not being successful in legislating morality or stupidity, they came up with the brilliant idea that we, the brokers who do what we’re supposed to do, file the reports we’re supposed to file, and toe the line we’re supposed to toe, now need to be sure the loan we are proposing to you is “suitable” for you. How this new law is supposed to curtail the bad actors who don’t do what they are supposed to do and just want to steal as much as they can before they’re caught is not clear to me, but perhaps I’m just not smart enough to see the “big picture.”
You now need to complete the Investor Questionnaire form (available to download here) annually and every time your financial situation materially changes. Upon receipt of this form back from you, we, as gatekeepers of all things melodious, can then decide whether or not you deserve to own a loan, or vice-versa.
As you are plowing through these two pages of intrusion into your life, keep in mind that the State of California needs you to divulge this personal information to us, even though you may never have met us face to face in your lifetime. We’re here to help if you want to call.
A couple points worth mentioning here; as to your net worth, we can not sell you a loan that exceeds 10% of your net worth, excluding your home or car. We also can not sell you a loan if you are going to rely on the monthly payments to live on. While the loan may supplement your income, it can’t be necessary to feed the family.
Trust deeds carry the risk of loss of your money, for your own good, there is a booklet published by the CA Dept of Real Estate titled Trust Deed Investments, What You Should Know! available free on the web at www.dre.ca.gov/files/pdf/re35.pdf you can download & read. You can also download it directly from Hope4Loans here.
I’m thinking of just relocating to Nevada County myself . . .
Hope 4 Loans
9901 Paramount Boulevard, Suite 222
Downey, CA 90240
(562) 928-9852 (FAX)
(562) 291-3329 (EFAX)
California Department of Real Estate # 00417768
NMLS UIN 271483