Can I become a private lender and collect origination fee at closing?

UPDATED: Oct 11, 2011

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Can I become a private lender and collect origination fee at closing?

I was going to lend money to someone who wants to purchase a home and the closing attorney was asking me if I have lender’s license or origination fee license?

Asked on October 11, 2011 under Business Law, Georgia


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you do not work for a licensed lender you cannot charge loan origination fees (points). For you to do so would most likely result in claims against you for charging usurious loans (loans that have too high of an interest rate) since you do not appear to be a licensed real estate agent or some other person who is licensed to make loans in the state that you live in.

You can be a private lender, however the rates that you charge for interest must comply with your state's laws on approved interest rates charged for a loan.

Good luck.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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