Private Party Mortages (family loans, hard money, etc.)


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In Maryland, mortgage lenders must be LICENSED. Anyone who issues more than 3 mortgage loans in a year must usually be both licensed AND follow a variety of federal laws, including RESPA, the Truth in Lending Act and so forth.  

In some limited cases, a non-licensed lender can make a mortgage loan.  Maryland allows for Seller held notes (where the buyer gives a promissory note and deed of trust to the person they are buying the property from) as well as parent-child loans.  

Did you know?  Most people refer to a loan backed by real estate as a "Mortgage" although most of the time in Maryland the preferred structure is a Deed of Trust.  A typical loan will have both a Promissory Note (the IOU) and the Deed of Trust (giving a Trustee authority to take over and sell the property if the Borrower doesn't pay).  The Note doesn't get recorded but the Deed of Trust MUST be recorded to be a lien against the property.  Put another way, once the Deed of Trust shows up in Land Records, the mortgage loan must be paid off before the property can be sold.  

Arden Law Firm helps prepare private mortgage loans (promissory notes & deeds of trusts) and coordinate recording in Land Records for the following type of residential and commercial loans:

  • Seller-held mortgages
  • Relative and Parent-to-Child mortgage (parent, grandparent or other immediate family member loaning money secured by a home or other real estate)
  • Commercial borrower (where a business is buying rental property or other business property and there is no owner occupied dwelling)

Arden Law Firm, LLC offers reasonably priced, flat fee mortgage drafting for seller held or relative (private party) financing.  This starts at $525 for a comprehensive, attorney prepared loan package which includes an initial attorney consultation, a Maryland-specific note, deed of trust and amortization schedule, witnessing/notarization at the law firm, calculation of any applicable recordation taxes and coordinating record at Land Records. 

Contact the firm at 410-216-7000 for more information.

© ArdenLawFirm 2014-2018  Managing Attorney Cedulie Laumann, Esq.