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Irwin Law
Irwin Law, Lawyer
Category: Real Estate Law
Satisfied Customers: 6915
Experience:  Lawyer- Broker 30+years - foreclosure, short sale, liens, title attorney.
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Cash LLC wishes to lend Developer LLC cash purchase of land

Customer Question

Cash LLC wishes to lend Developer LLC cash for the purchase of land and its development by Developer LLC.
Does Cash LLC need a mortgage broker license? Does it need a mortgage origination license? Please provide reference to your answer (e.g., relevant Colorado statute or regulations).
Submitted: 5 months ago.
Category: Real Estate Law
Expert:  Legalease replied 5 months ago.

Hello there --

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THe only reason you would need these licenses is if you are in the constant purchase and sale business of existing houses. For one transaction like this, the Cash LLC should enter into an agreement with the developer for a construction mortgage and this can all be written up and prepared by a local lawyer who has experience in construction law and contracts. I cannot give you a statute or code section because one does not exist -- which means that in order to do this, it is perfectly legal. My suggestion here is that you speak to a local attorney in your area who handles nothing but real estate and construction documents and you will be good to go in getting to work on the development that you all want to build. After that, the people with the brokers licenses must come in to sell the units when they are completed.

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Please let me know if you have further questions. If not, can you please press a positive rating above so I will be paid for my time. I am paid nothing unless you press a positive rating above. Pressing a positive rating above will not cost you any additional money -- it simply acts as the trigger to Just Answer to pay me for my time assisting you today. THANK YOU VERY MUCH

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MARY

Customer: replied 5 months ago.
Dear Legalease
You write: "I cannot give you a statute or code section because one does not exist -- which means that in order to do this, it is perfectly legal."You write that some classes of brokers/loan originators DO require a license. Please provide the code section (CO statute) which states that these categories do require license. From that authority, I will be able to INFER that other types of mortgage originators DO NOT require a license.Thank you in advance.
Expert:  Legalease replied 5 months ago.

Hello again --

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If this is a standalone transaction and you have no intention of becoming a mortgage lender, then you do not need a mortgage originator licence to invest the money into a real estate project. However, here is a link to their website and to the website of the real estate licensing department in CO so you can review these requirements yourself/ If you want to eventually get into mortgage origination for several or many properties then you will have to worry about such state license https://www.colorado.gov/pacific/dora/mortgage-loan-originator-licensings,

-https://www.colorado.gov/pacific/dora/division-real-estate

Please let me know if you have further questions. If not, can you please press a positive rating above so I will be paid for my time. I am paid nothing unless you press a positive rating above. Pressing a positive rating above will not cost you any additional money -- it simply acts as the trigger to Just Answer to pay me for my time assisting you today. THANK YOU VERY MUCH

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MARY

Customer: replied 5 months ago.
Dear Legalease
You sent me links explaining how to get a license. These links do NOT explain WHO must get a license.
Please provide a reference explaining WHO must get a license. If you cannot do this, then please release the question to a different lawyer.
Expert:  Irwin Law replied 5 months ago.

Does Cash LLC need a mortgage broker license? Does it need a mortgage origination license?

Hello. Another expert here and I will try to assist with your question. You have asked a question to which the answer is NO! First, you have mischaracterized what you are planning to do. You are not becoming either a mortgage broker or a mortgage originator. An originator is one creates mortgages and then sells them in packages to larger investors. A broker is one who obtains loans for others. Your LLC is a real estate investor/lender. The loan that you have described is a commercial loan between individual commercial entities (LLCs). That transaction is not regulated by the state of Colorado. The question that you should have asked is: Does Cash LLC
need a lawyer? Answer: YES!

Please be so kind as to promptly rate this answer favorably so that I may be compensated and the question may be closed in the system. There is no additional cost to you. Thanks again for using JUST ANSWER.

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