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CalAttorney2
CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10238
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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This is a question specific to California real estate

Customer Question

Hi,
This is a question specific to California real estate law. We have a straight note loan issues in 2007. The interest rate was 12% and according to my bankruptcy attorney it is usurious. The loan broker was originally licensed in 1993 as an individual and later became a corporation in June 1995. The loan was originated as a private loan under his personal name and all points and fees were paid to him as an individual. On the California BRE website, under corporate licenses it states "all acts of the licensed broker/officer(s) under this license must be performed only on behalf of the corporation". I am questioning if this is true and if there is a code associated with this. I have asked the BRE and they give a very vague answer as to its validity under California state law. I could use some help clearing up the legality of whether or not he is licensed personally or only under the corporation. Thank you, William
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  CalAttorney2 replied 1 year ago.
Dear Customer,Unfortunately this area of law is not very clear. I do agree with your bankruptcy attorney that the rate is usurious, however I am not very confident that the status of your broker's actions as being an individual vs. acting as a corporation are going to exempt you from the usury statute. (The code section exempts the usury rate based on the licensed broker arranging the loan - focusing on the licensed individual's actions rather than whether or not they are preparing the loan for their corporation).You can see how some of this confusion has played out in a more recent case, as summarized in this article: http://www.brewerfirm.com/articles/article-ursury.htmlBut, I would be hesitant in spending a lot of time litigating this matter (keep in mind, civil litigation in California takes 3-5 years to get to trial, and will cost you in the neighborhood of $200,000 - $300,000 if the matter goes to trial (unless you are able to get an attorney to pick this matter up on a contingency basis (which may be difficult, but you can certainly call around and try)).Please do keep in mind, I do not have all of the facts of your case, and most importantly, this forum does not substitute for formal legal advice of a local attorney, so you will want to speak with a local attorney for this type of personalized and formal legal opinion.You can find local attorneys using the State and local Bar Association directories, or private directories such as www.AVVO.com; www.FindLaw.com; or www.Martindale.com (I personally find www.AVVO.com to be the most user friendly).

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