Texas: Seller Financing de minimis exemption

Texas: Seller Financing de minimis exemption:

The TX Savings and Mortgage Lending Department will continue to allow the exemption found in § 156.202(a) (3) that “an owner of real property who in any 12-consecutive-month period makes no more than five mortgage loans to purchasers of the property for all or part of the purchase price of the real estate against which the mortgage is secured”   is exempt from the Department’s licensing requirements. The Department holds the position that exemption from licensing does not relieve that individual from complying with all applicable laws and rules pertaining to disclosures required by RESPA, new GFE, TILA, APR, new HOEPA, High Priced Loans, etc and the timing of each disclosure and rules.

http://www.sml.texas.gov/ResidentialMortgageLoanOriginator/documents/rmlo_news_information/rmlo_notice_20100817_156.202a3%20Exemption.pdf

TX Savings and Mortgage Lending Department Questions and Answers:

Q:  May an individual or entity owner finance more than five properties within a 12 month period without being licensed if they use a licensed RMLO to facilitate the transaction? 
A:  Yes, assuming that they only act as the lender in the transaction and do not take an application or negotiate rate and terms with potential borrowers

Q:  Is the Department’s interpretation of the five-transaction exemption under Section 156.202(a-1)(7) of the Finance Code is subject to aggregation for entities that share a 25% ownership. This interpretation results in a single five-transaction exemption for the combined entity group, rather than five exempt transactions per entity?
A:  Yes, the Department’s position is that the exemption is subject to aggregation for entities that share a 25% ownership which results in a single 5 transaction exemption for the combined entity group rather than five exempt transactions per entity. The 25% threshold is based on federal depository guidance used by the FDIC to establish non-rebuttable presumption of control.

Q:  An entity seller can only act through individual representatives. Assuming that an entity owner-financing seller otherwise qualifies for an exemption under Section 156.202(a)(3), does that exemption allow an officer or employee of that entity to act on the entity’s behalf in taking an application and negotiating the terms of the owner-financing loan without being licensed?
A:  Yes, assuming that the entity qualifies for the exemption.