Does the new California Department of Corporations ruling affect you?
A new ruling by the California Department of Corporations may change your ability to do Private Placements. If you service loans or run a mortgage pool, read on.
By: Mitch Feinstein, Esq.
Section 260.204.9 of the Regulations under the Corporate Securitas Act of 1968 set forth in Chapter 3, Title 10, California Code of Regulations:
This change affects PRIMARILY any entity that is selling interests in pools of loans, whether they be licensed as Real Estate Brokers, Consumer Finance Lenders or any other license, that have relied upon the PRIVATE PLACEMENT EXEMPTION in California Corporations Code Section25102 (f) and similar exemptions. It also applies to those who have sought exemption from qualification by use of the SEC Regulation D procedure.
This change DOES NOT AFFECT the California real estate broker making or arranging loans sold to one to ten lenders pursuant to the Real estate law.
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