BROKER/ARRANGER OF CREDIT

What is an Arranger of Credit?

If you google it, you'll find, under "Truth in Lending Law": A person who regularly arranges for the extension of consumer credit by another person if a finance charge will be imposed, if there are to be more than four installments, and if the person extending the credit is not a creditor. If you're interested in learning more Google "Real Estate Glossary". It also says, "At present, the term does not include a real estate broker who arranges seller financing of a dwelling or real property." Then it refers you to the Truth in Lending Law.

Here is what I believe:

Regarding AITDs, I believe any licensed real estate person doing an AlTD, needs to be an Arranger of Credit. Why? Because that's what my lawyer told me. I also believe that every Licensed real estate person doing an AITD also needs to be a broker. Why, because as far as I'm concerned the Broker is still somewhat on the hook, or at least somewhat responsible for certain things in the AITD for the 3, 5, 10, or even 30 years of the note (AITD). Remember, a licensed real estate person must work for a broker. Now when that agent leaves or switches offices, who would be ultimately responsible? The broker from the office (if still in business), from where the agent worked, at the time of the AlTD. Besides doing these AlTD's for such little money, this responsibility factor to the broker may be why no other real estate companies do AITD's for a living in the state of California to my knowledge.

Here are just a few of the responsibilities that the Broker/Arranger of Credit needs to address to both buyer and seller: principal, interest, maturity terms, payments, loan application, credit report, credit documents, late charges, balloon payments, prepayments, due on sale, notice of default, notice of delinquency, tax service, title insurance, hazard insurance, negative amortization, deferred Interest, acceleration of senior encumbrance, legal defense, refinancing, recording, junior financing, senior loans and encumbrances, all underlying loans, balances, payments, maturity dates, buyer's credit worthiness, to name just a few.


As a Broker/Arranger of credit I will not provide Legal or tax advice. I think that it is essential that buyer and seller seek legal, tax, and other desired assistance from appropriate professionals.