What is Note Investing Debt License, When to Get Licensed | Real Estate Notes Show

Episode: What is Note Investing Debt License, When to do get licensed Dave's Goals and Plans: - Running JKP Holdings with Nathan Turner - Has a YouTube channel and Facebook group for note investing content - Runs a weekly mastermind investment community group - Experienced a case where an investor bought notes in Illinois and Jersey without realizing licensing was required Nathan's Goals and Plans: - Currently in Canada experiencing extreme heat (102°F with humidex) - Emphasizes that debt licensing is a must and absolute requirement, not optional - Stresses that licensing requirements are often avoided or ignored by trainers due to complexity Key Recommendations: - Contact Cornerstone for specific state licensing guidance and legal assessment before purchasing debt - Understand that owning/purchasing a loan itself triggers licensing requirements in many states, regardless of using a servicer - Consult with an attorney when you say 'I buy debt' to determine licensing layers and state-specific requirements - Obtain proper insurance coverage specific to debt buying activities - Learn licensing basics as you move along in note investing, though not necessarily as first topic Topics Discussed: - Debt licensing requirements for note investors - State-by-state variations in licensing laws - Myth that having a servicer eliminates licensing requirements - How regulators discover unlicensed debt owners through servicer audits - Differences between lender, broker, and servicer licenses across states - Consequences of operating without proper licenses Guest Insights: - Kyle (attorney in Michigan/Ohio): Purchasing debt across different asset classes requires constantly changing state licenses; regulators cross-reference servicer client lists with state license databases to identify unlicensed operators - Christy (Cornerstone, 16 years): Company handles licensing paperwork, surety bonds, MLS filings, and specialized insurance policies for debt buying activities - Illinois example: Act of purchasing residential mortgage loans triggers licensing requirement, even below certain loan thresholds in some cases everybody dave putz here from jkp holdings alongside me as always mr nathan turner morning good afternoon depending on where you are so it's awesome that we connected for a few minutes um i don't know how things have been up there in canada uh journey's been hot this weekend man yeah 90s i think we're in 97 today yeah i just i just checked we're actually sitting at 102 with the humidex that is not fun that is not fun yeah yeah expect to go up one more degree celsius so around 100 and 304 today it's hot yeah you know the pool is great i mean the kids love it you know um last day of summer camp i'm sure we'll be jumping in a little while so yeah i think you know we covered some awesome topics we've had tom on recently but you know and just i got a reminder here guys always check out the youtube channel we have the reminder bell and all that good stuff our facebook group um and things like that so yeah guys understand the fact that what we're doing now is awesome stuff right we got today we're going to be talking about something that nathan i don't know if if necessary is strong enough and it's an interesting topic because not a lot of people talk about it i think it's the kind of thing that everyone just wants to avoid they don't attend it doesn't exist but it does exist and and yeah necessary is not strong enough and it's necessary yeah it's a must an absolute must so guys whoever's out there listening right now i know we got everyone kind of tuning at different channels our facebook group or whatnot but note investing is taught in all different facets by all different people and one of the topics that probably at least talk about for numerous reasons i i think is licenses now this isn't realistic licenses this isn't licensed to do anything fun this is simply to own debt and this is a state by state sometimes hour by hour change i think one of the reasons we don't talk about it a lot is because it's it's so different depending on the state every state's got different rules and different it's it's complicated so it's it's not something that a lot of trainers want to get into because it's complicated very true and there's there's a lot of information and it's it's a lot of a lot to sift through yeah sorry about that guys so there's an echo craziness but uh so i'm glad to see that we're getting into a topic that people need to learn about on a requirement of basic understanding of notes however that it's something you need to learn as you move along i don't think it's the first thing you need to learn about no that's true right and yeah and we're not trying to like scare anybody either there's an expression in french to suffer and it just means anything's possible so so it's it's all you can do it all and it's not impossible but but there is a way in a procedure so you're not meant to scare anybody not meant to freak anybody out but it is stuff that you need to learn about and i think for most people they don't realize the struggles of understanding what could happen if you don't follow the rules and i i think dead license is one of those kind of topics that most people rumor has it i'm not sure or find out when it's too late yeah what the rules are um i shared before we had somebody where i was talking we have our investment community which is the weekly mastermind group if anyone did should jump it in they were talking about joining the group and they mentioned they bought two notes illinois and jersey and they presumed they would go performing it didn't though it was no big deal however run into the problem was now she's not licensed in illinois and she didn't know she had to be and she wants to start now what do we do shook my head right this is just frustrating so today we're bringing on some experts in the space um just make sure you understand that they they're unable to answer specific questions about every single state because that's sometimes an hour-by-hour change and a lot of information that is not available all the time so we want to make sure you guys understand we're going to be asking some general questions but we want to make sure that you understand the basics of it right um when you need the specifics answers questions how much what the process is we need to reach out to cornerstone and get your licenses through them right so i'm letting you guys know that they're going to have some general questions today however once those questions are getting in depth into a deal specific situation please reach out to the cornerstone and get them set up to help you along the process of getting licensed so without further ado kyle christine welcome to our weekly webinar can you share a little about who you are what you've been doing what's this whole thing about note pet licenses sure david it's our pleasure uh first of all thank you for having us on uh christy and i do a lot of work together uh certainly on a weekly day basis and uh almost daily basis uh at this point and uh i'm an attorney i'm physically located in michigan uh licensed to practice uh and litigate in michigan and ohio but um i've been working closely with cornerstone support for about a decade now in assisting their clients kind of navigate the landscape of licensing in general um i'll let christie kind of talk about what the history of cornerstone is but but my history with cornerstone is that um you know the landscape of licenses required to purchase debt across all different uh categories and asset classes has been a constantly changing environment especially over the last 10 years so um different states have decided to license that never did before they've they've decided to enforce their licensing statutes in different ways and of course your business that you're talking about has really uh boomed over the last decade or so uh there's a lot more people involved and um and because of that there's been a few uh potholes that people have stepped in unknowingly and so we i think we can talk today about some of the general uh things that that your viewership needs to be aware of and um then maybe get into a few specifics as as we go along but uh basically i've been involved to give legal opinion and kind of guide people from a legal standpoint uh through this this whole process and uh christie's christie's team goes out and gets the job done and uh kind of can talk about um timing and some of the difficulties and application process and those things too so christy if you want to take it from there thank you kyle yeah this is christy barger i've been with cornerstone for 16 years now our company was formed back in 98.

um back then it was our specialty was standard third-party debt collection because that's really all anybody talked about as the industry has grown and changed we have grown as well and so we do lending licensing mortgage licensing accounting licenses all kinds of different licenses that um are needed in our space so when i have a client reach out to me and they say the word i buy for the words i buy definitely tell them we're going to need to talk to an attorney there's a couple layers of licensing that you have to look at some of this state statutes for the debt collection cover the the activity of buying debt uh saying you need this license if you if you're a passive debt buyer or an active debt buyer but then on top of that the specialty licenses that kyle was talking about that's kind of where his expertise comes in he's able to ask very specific questions uh of the people and find out exactly their business model and then he can compare that to the statutes and come back and give a legal assessment which kyle said is our marching orders so we um we do the paperwork with the paper pushers we um help with the filings on the online a lot of them are on the mls which the system can kind of be a pain so our girls are trained on how to get through that process um a lot of licenses have surety bonds and so we've got a department that handles that here at cornerstone and then we also have an insurance department because with these this type of activity you want to make sure you have the proper loss or i'm sorry the proper insurance in place to cover you you know insurance um different types of policies that um you know we can write specifically for our industry so if something happens unfortunately you've got some coverage there so um that's kind of where cornerstone does and we're a great company and it's we've helped a lot of agencies over the years and we enjoy it amazing good so i i think some of the chat questions we already got is you know let's get back to the basics right debt license is only required myth right when you want to service loans or when you you you don't need a license if you have a service we hear that a lot number one myth i guess that we hear is as long as you've got a servicer you're good right no i think i can lend some some clarity to that so um here's many many of the state statutes say something uh similar to let's say we'll just pick one out pick out illinois is a good one because you you brought it up david um so and i just i just brought this up and again we don't want to get too deep into state specifics but in illinois it says a person must be licensed to broker fund originate service or purchase residential mortgage loans so the act of purchasing that loan and yes it's subject to a low volume requirement so if you're you know if you're under your your three three loan minimum there um it's not triggered but the bottom line is just purchasing the mortgage account triggers a residential mortgage license there in that state and so here's how um these things happened in the past clients have come to me and said ah we got you know we got pinged by this state and i have a cease and desist letter that that's kind of typically how a regulator will start out their enforcement process um well what they do is they go to the large servicers and they say please let me know who all your mortgage companies are that own mortgages that you're servicing in our state and then the servicers will provide a list of those people and very simply the regulator will just bump that list up against who's got licenses and so everybody who is doing business with a servicer in illinois uh once that regulator comes in and does an audit but isn't licensed according to the state of illinois they're going to know that reveals it immediately that okay we've got these 27 people out there that aren't licensed but they they've got business that they've placed with a servicer so we know that they own the account so um doing business with the servicer in and of itself can be the source of what exposes you so it's just important to remember that and there are many statutes out there that will create that licensing burden not not a debt collection license these are actually lender licenses falling under the scope of mortgage lender broker servicer and i say those three things because unfortunately uh when you kind of let off you said all right we've got uh 50 states with 50 different rules well they're and that's true and and they've set up their statutes very differently some will licensed um lender broker servicers all under one statute and one license some break out broker and lender into one and a servicer into another one and then others will break out all three into separate ones so it's it's a very different scheme for each state but i just want to let your viewership know that just the act of owning the loan itself can cause you to need a license um and then as a subset to that there are other activities that we can talk about that will trigger a license that maybe are within uh your viewership's ability to decide to do or not do to outsource or not to outsource so there are some of those things well you know i i've engaged an agency to do this i have a foreclosure law firm to do that all of those things are factors that need to be considered and that's where the complexity really jumps in gotcha so is it true that there's some states out there that don't need a license but you only need a bond yes so um there are some states you don't need a license um bonding is more of a question for christy but um honestly the the if you don't need a license here's what i want to say about bonding and then i'll hand it off to christy if you need a license oftentimes a state will require bonding as part of that license application process but if you don't need a license most states contain an exemption um to their bonding requirements or certificate of authority requirements for this type of activity so and then i'll hand off the bonding question to christy because i think that she's got a department really that's that's far more um it has a lot more expertise than i do in that yeah thank you kyle so kind of the only states that require bonds only is going to be uh texas and new jersey and that's under the debt collection statutes um that's going to trigger the need for that bond uh usually there are maybe a 10 000 bond and you're paying a percentage of that with the states with the more complex licenses like the lender and the mortgage those do have bonding requirements they're each state one thing to know is each state is specific specifically has their own bond so it's not like you can get one blanket bond i get asked that a lot can i just get one bond for all states fortunately no because the states actually have their own bond forms so um you know someone working nationwide is going to have really a good number of bonds in place for all the different licenses um maybe even in one state you're going to have two licenses and you're going to have two bonds but that's part of the process that we we work with in this comments and we have a surety a department run by joel blackburn here at cornerstone he's great and he can answer any bond questions and and helps the process and gets those bonds over to our team members to submit to the state for our clients awesome so let me back up a little bit i think that missed part guys if you're looking to go get insurance or go get bonded or get your license you can go directly to cornerstone and get the entire process done with their assistance they'll make sure you go through all the check boxes and go through the whole process and let you know you need or not needed by evaluating your situation right so they're like the middle person to make sure you need or don't need it um you can do the homework yourself but you may need a legalese dictionary with you to make sure you understand what it means and a lot of immunity to law a lot of questions out there right so yeah david that that's great thank you for saying that um one kind of thing you know when you're doing the application obviously you can do it yourself um our staff is trained to know the applications they are assigned certain states and so they kind of know that the nuances or the weirdness like you can't staple some license out or license applications and that's just the stupidest thing ever but we have the knowledge and the girls work closely with the regulators and um like yucky said we consider ourselves a one-stop shop we'd like to keep everything under one roof and take care of our clients completely yeah amazing i think that most people you know they don't know about this and be a loss nathan what's been your experience with people who get involved in this or get lost at this quickly i you know i it's it's in so many instances and notes uh there will be a question that comes up and then the answer is well it depends and it's it's the worst answer you want to hear but it's it's the most accurate uh because it really does depend if you're talking about one state versus a different state and a you know a bond versus a servicer license versus a debt collector license versus a loan lice a lender license like there's a lot of different factors and so it's it's difficult to just say this or that or you know there's no blanket statement where you just say yes or no there's it's not a just get this and you're fine you know it really depends on your specific situation so it's good to get with professionals that can help navigate that nathan usually my conversations i'm sorry kyle normally my conversations start out with i just want yes or no tell me yes or no and i'm like no it's not that simple if it was i wouldn't be sitting here so um you know i kind of tell them kind of the complexity of it and how you know an interest maybe or an interest rate might be a trigger or um you know first or second mortgage i mean there's so many different um nuances and that's where kyle jumps in and he is knows this and can check statutes and it is amazing to help god is in the right on the right direction for the clients well and it's really what we it's what we do it's part of what we do so um you know 10 years ago we dove into this um the process was a little bit different i think that things were more simple uh they've gotten more complex but then also it's it's been a good journey uh for me to be on with my partners at cornerstone um to really learn what people need so so what we've discovered and we've been doing for years now is if i provide a legal opinion based on somebody's business model um we always get back on the phone after that to talk through the specific nuances because they're i can't know your operations the way you know your operations even if you're small i can't know what you're going to do on a daily basis the literally licensing can come down to what types of conversations are you going to have with the consumer and so um certain states consider that that conversation to be loan modification just having the conversation so and loan modification can be a trigger for a broker license so um those it's that nuanced and so you have to have the follow-up conversation once the research is provided once the general road map is provided there's a large conversation about okay but what are you actually doing and how are you doing it and you may be able to make some decisions in a state like hey on a on a on an account in washington state i'm not going to do this because if i do it's going to be a license whereas if i just tell my servicer somehow hey you need to have the loan modification conversation then i don't need a license that i would otherwise need that may have value to you absolutely the other thing that's really important and and i think that i want your viewership to understand is that both from cornerstone standpoint and mine we are we don't just simply say you know what let's err on the side of licensing because and that would be kind of an easy cop-out right like there's a license out there i think you might need it let's just recommend that you need it but um the problem with that is is that the cost of licensing goes far beyond the up front seven hundred dollar fee or twelve hundred dollar fee um you are opening yourself up to audit uh from a state you're opening yourself up to regulator involvement in your business so this is not a question there's some there's some downfall or some some pitfalls to over licensing as well you don't want to be under license that creates exposure obviously but being over licensed is going to cost you money in the long run because states follow up states eventually get to the point where they they audit you and they want your records and it's time and time is money so it's a question you want to get right not necessarily just say you know i want to be so safe and get three or four licenses i don't need either right yeah and one important thing um that i like to make sure everyone knows is this isn't a one and done conversation so we we you talked to colin out today and then you know six months from now this some laws may have changed statutes may have changed states positions have changed so this is an ongoing conversation that companies should have um you know if they go into new states obviously that's a trigger to have another conversation if you're changing your business model completely uh or if you just want to check in and say hey this is what i have what do i need and that's something that should be done you know you want it's it changes every day or every hour like you said but it's something you definitely want to look at um you know we usually suggest once a quarter or at least you know once a year um to make sure that you have the proper licenses in place for example you know recently californian got some new laws they'll be going to infect zoo in uh minnesota so if you did your homework a year ago and didn't know about these laws you buy them you could be caught in a situation could you guys give an example of what happens i'm in a state that requires licensing what are some of the possibility downfalls of not having my license and own the loan yeah so um and i think i think the most common uh scenario for this to come up for us is when people have been doing business and they go to apply for a license that they should have had previously they just now realized okay i need this license but on the application um there's a section that says have you already been doing business and and you know they've got to answer truthfully and have to say yes and christy i think that you can probably comment about kind of what some of the remediation looks like in those scenarios yeah we've seen unfortunately we've seen fines issued by the states we've seen it affects other states so say if you get a disciplinary action in one state when you upload that into the nmls other states can look at it and so then they may come say hey if you're working in illinois are you working in massachusetts are you working in new jersey so it it's not just a one-time issue for you it follows you unfortunately uh throughout your your licensing life i will say this that every single one of the statutes that provides the authority for a regulator to issue a fine or a cease and desist letter or something like that creates a difference between a knowing violation and an unknowing violation so that's one thing that should put your viewership at ease a little bit that you know if you didn't enter into this with the intent to skirt licensing laws you know really the the issue becomes um you know potentially yeah you could get a a fine that's probably not going to be a huge amount of money but um the issue becomes that the regulator wants you to license they want you know if you're coming in and you're saying hey i want to be licensed i want to do this right i didn't know i needed this i'm not saying that you know you're in the principal's office for a moment there um but they want you to come into the fold to be licensed and to kind of remediate that so they're going to make a pathway for you to do it also um there's really it never makes sense to say i didn't license already and i'm just finding out that i needed to therefore i'm going to continue on not being licensed that's really never but people have that idea that you know if i don't get this i'm gonna be penalized yeah or hey i didn't get caught yet so it's okay right right right yeah and usually if there's a big issue going on we always try to connect to them with an attorney in the state you know you want to go to the state with your hat in your hand like you know and i didn't know there was licensing i want to do the right thing now and so that helps with those situations too is to you know get somebody that's can act on your behalf in a legal uh legal way and hopefully get that fine or lowered or maybe gone for completely i think we're coming to the end of it now but um you know you probably could still right now write a letter saying uh i wanted to do this but covet yeah i've had that work for a couple of clients over the last year right exactly so you mentioned before uh sometimes just the servicer having a servicer and the regulator will come do an audit and that can be the trigger for you uh kind of being brought out of the open what are some of the other triggers that can that can kind of put you on the radar well i would say the most common one is a complaint from a consumer uh or a consumer just simply saying you know who is this person that bought my note um you know i'm talking to them and a lot of people you know they're pretty savvy they'll look up and see if you're licensed those things are public record and if you're not um they'll they'll contact the you know whatever office in the particular state that's regulating that that's probably aside from the regulator servicer audit that's far and away the most common i presume defendants the borrowers attorneys can find this out and then hold up in in foreclosure court the same issues absolutely uh absolutely true now you know under not so much in the mortgage laws but in other areas of debt buying other asset classes um there are statutes that indicate that you know you either can't collect at all or you can't collect the interest and things like that so it's very state specific not so much in the mortgage space but you know i don't know if some of your viewership uh potentially is buying other types of of accounts as well so um that that's kind of where that lands but um you know the bottom line is these things are not secret people can look up whether or not you're licensed and so it's pretty pretty discoverable yeah uh i'll leave you some feel some of the questions are coming in as well yeah i had one others yeah excuse me um so let's go pick on illinois again just since we're there but uh i'm not a huge fan of illinois but i don't think millionaires are we're already there so that's fine so uh my question was what is it just mortgage um mortgage debt that needs licensing or like what if i've got a contract for deed or is that against state specific well it is state specific but the thing to remember in illinois is that here and again here's the language are you purchasing a residential mortgage loan so uh if you're i would say if you're purchasing the obligation for the consumer to pay you on a contract that's secured by real estate it would fall within that definition now the nice thing in illinois and this also happens i think christie alluded to it earlier and this is one of the reasons why um it's important to get a legal assessment i think is because certain um elements of the licensing process will exempt you from other parts of it there's a number of states where that's true illinois is one of those so um if you get your residential mortgage licensing act license in illinois licensees under that act are exempt from the collection agency licensing in illinois so you really only need one license there um that's not always true but it is true in a number of states so again you know you get into specifics but getting the right license can mean you only have to license once and i think that's the answer to the question some of the questions we've had is like being the top three states to get the license and the question is what are you doing right are you using a servicer if that changes if you're using a servicer there's certain states that don't require you to have a license if you have a license servicer handling your everyday interaction with the borrower right so if you're talking about self-servicing now we open a whole new can of worms of i'm self-serving alone you need to get different licenses based on that scenario but here's the thing so when we talk to people i don't let them say um i've outsourced my servicing or i'm self-servicing because people mean different things when they use that word they're not necessarily using the legal definition so really i don't even want to know what you think you're doing i want you to i want you to lay out the specifics of what tasks are you undertaking and how are you doing those things and then we'll kind of kind of funnel that into the um definitions and the statutes so that we can figure out a plan that's the way we go that's huge that's very very big you know that's something i reluctantly i think i mean christie's not in conversation like i just need to know and the problem is verbiage that we use can be translated to different things right i do everything with services well do you do everything with service or do you mail a letter to your borrower well i do matter yeah they have everything but right nathan sent the man letter he handles that part now is it triggering anything by doing demand letter where services does everything else so absolutely right and and oftentimes people will say say back to us um well should i not be doing that and the truth is that there's no wrong answer there's no right answer to what you should be doing i just need to know what you are doing and then we can identify for you you know if you think that's a part of your process you can take out in order to avoid some licensing then fine but those are your intern that's your internal decision to make all we can do is kind of lay out the landscape lay out the variables and then you know you pick and choose what you're going to do yeah okay we've got some questions that came in here we've got uh i may not get to all these but let's see what we get here so joshua scott's asking uh when you start a foreclosure should your attorney be helping with this making sure that you're compliant before you start filing um i mean sure i mean i can't i can't speak to what what an attorney you know is going to do with regard to your licensing and they may not be an expert in licensing um and they probably aren't in fact they probably aren't there's i mean you have to really really um you know have almost no social life whatsoever i'm going to answer you so yeah i agree i mean nathan asked that question you know basically from josh's point of view but your attorney is there to do the legal process for close on that asset their job is to know the law of what can be foreclosable and what can't your business and what you do your business you're licensing your business it's not involved with the foreclosure process they don't check to make sure you're licensed because they usually make sure that that collateral file is closed is proposable that's a word right legally able to foreclose on the side of the fact you collecting debt is not in their world they just want the numbers from that so yeah yeah so they probably don't know uh if you are or need to be that that's not part of their yeah expertise some will say i think so you know we've asked many attorneys hey what do you know about georgia right because georgia has a law that i believe it's five or under your personal name blah blah and we've asked for quotation like i don't know like that's not their expertise so we get them confused a lot of times and think that because they know foreclosure we have to know the lending licensing laws and they don't yeah and actually cody's got a question kind of along those lines about um kind of exemptions per state uh like for example georgia where there if you have less than and and this is the number that i've i've heard all kinds of numbers less than five less than three uh i've heard none there is no exemption so again i i imagine that stay specific any comments on that uh it's very state specific some some don't have any low volume exemption at all so um and and i think why you've heard different different numbers at different times is george is a little bit unique uh because the language there seems to um confine the low volume exemption to an individual and doesn't make it available to a corporate entity um that's unique um most of the most of the statutes that have a low volume exemption don't don't talk about it in that way but it's just very state specific and usually usually it's somewhere between three and five uh others also will allow it to be between three and five annually or three and five in any 12-month period so you know if you can stack up your 12-month periods you may be able to accumulate some loans there without you know without license so i just want to clarify what you said there for those listening when they say individual meaning in your personal name right um there's always questions about being an ira name versus personal name like can ira be supplemental for your personal name but when it's you cannot put into your company name llc or entity you can from where understanding is put loans be exempt from the licensing in georgia if it's in your personal name just like you created it and you did your own thing that's the idea of um we've heard five or four three like you said but the personal name is the key there for what we need on the show david i agree with that here's the thing so if i put on my corporate advisor hat i would tell people the potential liability in the consumer lending space these days would make it um absolutely a terrible recommendation on my part to put a note in your personal name i i just think that um you know christy you can talk about what licenses generally cost but i mean you're talking about a license that costs a thousand dollars or something in that range i would imagine and to expose your personal assets to liability is not a good decision in this space not in the environment we live in today so and before christie jumps in there is that an annual cost or a one-time fee so with the licensing there's an initial cost to get it in place it's usually a little more expensive initially because the state has to do a lot of background checking and vetting of the company they do renew every year so there's some type of filing that has to be done sometimes there's supplemental filings like there may be a license annual report or a mortgage call report um again each state's different with what they require but they all do redo they're not one and done licenses gotcha and i guess the annual cost is usually a lot less than an initial amount it can be you know some of the states do have a less um a smaller filing fee for the renewal other states have the same when you as when you initially get it and then you've got that bond fee if the state has a bonding requirement you also have um that that reduce every year so that's additional fees that are paid so uh victor wagner's got a couple questions in here um this first one i think we've covered already but he's he's asking is there such thing as like uh if you buy a license in one state does that carry over into another state i think we've already covered that the answer is yeah i think on yeah the that's a hard no that's a yes or no question right yeah that's not an it depends that's a no and then the second one here i'll just read it how he's got it written because i'm not quite sure what he's asking he says does any state require a licensee to report unlicensed entities as a condition of maintaining the license uh not that i'm aware of yeah so i can write out nathan say nathan is not licensed you know because georgia requires me to let them know if i know like insurance i guess okay you know someone's robbing insurance companies report the bad you know i think that's the angle yeah interesting yeah and one thing too is i i know we're all friends in the industry and people talk to each other don't get the license that your buddy has that may not be what you need i have a lot of conversations about that well so and so has this license so just give me these no that may not cover you we like to be quick and easy right we always want to get past it yeah i wish it was that simple but it's not and then chrissy can you give us an idea we we've talked about it briefly but like uh when you say set up fees versus annual fees and things like what kind of range are we looking at like is it like kyle mentioned like about a thousand bucks or is it more like five thousand or yeah i mean there's a thousands kind of a good average i would think there are some that have really high filing fees um i've seen 10 000 filing fees in a couple of states so it really just depends on the license that's being applied for um again at renewal time it's usually a little bit less i kind of like to give a 60 40 range of how much it reduces um but that's not every state but that's that's a good bit of them who's charging 10 grand oh and here's what really gets you too the bond amounts so for the collection agency a little bit explain the bonds to issue a little bit yeah so the collection agency licenses may require a ten thousand dollar bond it's pretty simple um some of these mortgage licenses you start out at a minimum and maybe twenty thousand fifty hundred thousand five hundred thousand uh but as you do your business um you're reporting loan balances and work done and that can affect the amount your bond has to be uh be filed for so at renewable time you're increasing your bond which is going to increase your filing fee or your bond premiums um each year as well essentially obviously you want them to go up because you're you're doing more work but it's going to cost you so for a ten thousand dollar bond am i handing over ten thousand dollars yeah so um i like to explain it kind of like an insurance policy so think of a premium um a ten thousand dollar bond i would say probably is going to cost you around 150 a year um but it is a yearly fee yeah okay yeah we've had that question a lot you know uh 10 grand that's a lot to put up it's not that you're putting up 10 grand it's that you're buying a bigger package when you buy a term life insurance product for a million dollars you cannot prove a million dollars right um right and it does the the bonding amount does uh read a lot it's it's based on your financials of your company so if you're a new startup company you may have to go to what we call high risk uh it's not saying you can't get a bond you just may have to pay a little bit more for it like car insurance it is and so that's yeah exactly and you know we we try to get the best price available and uh we uh watch the bonds for our clients and uh keep them as cheap as possible but they are they they do change sure yeah all right victor's got one other question here it says uh are you aware of any state enforcement actions against an s uh self-directed ira or 401k plan as an unless slender um i am aware of okay when he says enforcement action um let's just say that there are lots of different uh layers or or or manifestations of that so what doesn't normally happen is uh smaller players like this um the enforcement action just generally does not come in the form of a lawsuit or something like that that you know the state attorney general is not getting involved in that way what will happen is um you'll get a letter you'll get a letter from the regulator saying you know we have information that you're doing business unlicensed um and they'll ask some questions are you doing this business and that's how it will start um and then they're really trying to get to the point of um you know did you do something that they think they're going to issue a fine are they going to issue a cease and desist letter um those kinds of things and then you'll have an opportunity to remediate so i would i would describe that as an enforcement action that's action being taken by the regulator enforcing the laws but maybe is taking on a little bit different um connotation then there's an enforcement action like what we see potentially coming from the cfpb uh against collectors or lenders in the consumer space that are large players okay so that that's kind of how how i would describe it normally happening so there's no real straight protection if i say listen i'm not gonna put any loans in my company i'm not gonna put loans in my personal name i'll use my self-direct to protect me self-direct diaries are not protected and still need to become licensed correct correct right so whoever owns the loan whatever that entity is whether it's you as a human being or an llc or a regular c corp or whatever um that entity needs to obtain a license in various states based on various activities yeah um yeah do you want that llc or the incorporation there you don't want to go license you know christy barger so one of the questions was a good question if if it says like if you're a scenario where you didn't get licensed and you learn about the license requirements and you get licensed and you possibly got fined because you didn't do what you're supposed to do would this pose a problem when you go to get the license then or it's like you gotta find we'll still accept your license or they hold you off and say well because you failed to let us know before you know you won't be able to get your license yeah i haven't seen that i mean it does happen where you're reporting unlicensed activity um i've never seen an estate say too bad we don't want you in our state now because he says it's the violation can be visual in the mls so yeah the nmls system is what the mortgage space kind of uses for a consolidated place for their licenses over the years the collection industry has kind of jumped on it so a lot of the collection agency licenses are on there now so when you upload a document to say you're filing for a connecticut license and you're uploading a document any other state could look at that now i don't think states just go out and say hey let's try to find somebody who's got in trouble and they might but but it is on the nmls and it can be seen by other uh other states licensing boards cool one of the questions we have here is are you guys attending any kind of conferences i know the conferences are kind of ramping up now yeah cornerstone goes to several a year um we kind of look at the first of the year and see what's coming up obviously we're always at aca and rmai those are some of the standard conferences we go to we have been to a couple of the mortgage uh conferences so always looking to go to you know if there's a good one you know about that we need to go let me know um so we we do stay on top of those and try to go as often as we can i would say the same for me and just so you're you you're aware um i'm not an employee of cornerstone i'm an independent attorney uh one of the things that we do in issuing legal opinion for people is um advise them that the opinion is between myself and them their obligation or desire to share it with cornerstone is really up to them and one the reason that that's important is because um i then have attorney-client privilege with them so the things that they would tell me and divulge uh if we keep cornerstone out of that portion of the conversation are still privileged and then we can share the research with them and you know all of us can kind of collaborate after that but to that end um i've been uh at many conferences um with christy or people on her team so very often we're uh we're together in those things yeah there's some note conferences coming up this fall that might be yeah and i think that most people don't know what the conversation you mentioned before they're not the typical note conferences that we're all aware of right we have a couple coming up here um you know nathan and i will both be speaking out but not um those conferences are typically not what cornerstones going to but we'll share with them that you know the dme that's coming up september um and then node expo and paper source and whatnot um it'd be great to see them out there but understand that they're a different level typically um the level conferences they were speaking about before are more higher level than the typical ones we're all accustomed to um where we're focusing on the note side stuff the side of servicing and licensing is a little bit grayer server seems involved with us but licensing is a little bit different that's all about regulations and um and whatnot regulators and whatnot so um i'm just trying to create some more questions as they come in here uh for the different feeds everything else so guido i haven't talked to guido for a long time good to see you guys sort of see it he says if i sign a purchase sale agreement for a note in a new state that i didn't do business in before do i get licensed before signing the sale like before closing basically i'd like to have to get that license before they completed the sale um not necessarily but i guess here's the the issue there um is that before you take any action i mean it potentially is going to hold up you taking action so um christy what would you say i know you hate this question but i love telling i love putting you on the spot uh what would you say the general timeline is to get um you know a mortgage broker service or lender license you're probably looking at about three to six months again depending on the state some of them have you know fingerprinting which has to that takes some extra time to process um you know i don't really think the states are behind because of covid they've done a really good job you know staying up to up to date on their stuff but three to six months is the dates i'd normally drop when i'm talking to someone about processing times and there's no expediting because that's that's always asked which there was but the states it's kind of you know first come first serve you fi the sooner you file it the sooner you get approved to answer guido's question it is um probably something he wants to know in advance right so if i'm moving into a new state number one do i need to be licensed there number two um what is my three to six months gonna how is that gonna impact my business plan here so um you may be able to sign a letter of intent or understand that you're going to close on this note at a certain point in time in the future and be able to initiate the process of getting your license in place earlier to reduce that that exposure there because again obviously time is money and you want to jump in and get the low hanging fruit and get you know get the thing back to performing or whatever you're going to do [Music] yeah steven burks got a question here about uh consultations with cornerstone uh do you is there a cost associated with the consultation so there's not so if someone called in and was asking me questions i would answer obviously the best of my ability um when we started needing kyle we reached out to him we jump on a call for the three of us and um there's no calls for that consultation um i'll kind of let you explain where it takes it from there because that's where you dropped me off but um no church to talk to me and no church to talk to kyle initially yeah and then i i would jump in with somebody once they've given me a description of i mean the typical conversation is hey what made you place this call in the first place are you moving into a new line of business is there a different geography going on uh are you just you know did something happen where you became aware of a license whatever the reason is and then we asked people to describe what we were talking about earlier the exact tasks that they're undertaking where they're doing it from um and how they're going about their business and then what i do is normally follow up that kind of an initial call with a proposal to say uh hey look this is the research i think you're asking for this is the amount of time uh and effort it would take me to put into it uh this is what i charge for that please let me know if you want me to go forward with it so um then i don't do anything unless i get the green light from them and that all happens between myself and them individually again christie just mentioned she gets kind of kicked off the call then at that point um and then once i provide the research back to them that's when we schedule the follow-up call to talk through the nuances and things like that and then again it's up to the note owner to decide whether or not to engage cornerstone for all or part of what i've recommended and then there's more collaboration after that point but there is that moment kind of in between where it's just uh me as the attorney the client is the client having that kind of private conversation about what they're going to do got this question here from uh love mckenzie uh i've got a follow-up to your question kenzie um are you saying that i have to have a license to sell notes so i would actually go back to mckenzie and say well do you own them or not are you brokering them or are you owning them and then selling them so yeah well right but there are at least a couple of states um that that do have language in their statute that um indicates that you need a license to sell notes now again your um nathan your your question is right on point if you own them you may have needed a license just to own them before anyway um but uh and and then there's the question about okay i'm i'm i'm selling these notes but i'm brokering it so i'm not in the chain of title and that is another nuance that could affect licensing in every single state so that's a very very specific question that would need to be evaluated under the statutes of every state yeah so i i want to make sure everyone knows we i just posted the form uh if you want to get their information we're going to do is we have a form together you just put the information there and i'll share with kyle and christy um your information um so they can follow up with you but you also can follow up with them um and i'll share their information um as we get along with them so i think that's a big thing for me for brokering notes we hear a lot of people get in this case and say hey i have wholesale no uh you know properties i've bird dog before i've gone out there and look at houses and i just get my simon fee and move on what they don't realize is notes is not like brick-and-mortar real estate that you can't just go and grab a note and sell it to a person in certain states you need to have a broker's license in certain states um you can get fined you can be regulated you can be in trouble for just trying to make a couple dollars so you need to make sure that what you're doing now i'm saying is if you're in a situation where you're broken you know you're connecting to people what not it may not be your situation but if you're truly trying to broker you can get yourself into some big trouble um so be careful with that stuff brokering is a dangerous space um in our note space a lot of people swear they're direct to the seller we've talked about that before you may not be direct to anybody but another broker who says it's a seller or whatever um or what that so i'm glad you asked that question love i appreciate you jumping in there um and we'll definitely uh you know respond to your other question later um she said she's a real estate broker unfortunately real estate broker and notes are completely different world um you know can you real estate broker in a state without having license nope say anything with your notes but it's a different test it's not the same angle so i appreciate you jumping in there and asking questions i think for me um with with licenses it is there are so many nuances of notes that license is another icy on the cake and another cherry like another thing to learn right we learned about you know stash limitation you learn about the fact that of you know is a paper foreclosed or not now licenses is it hard for a newer investor to get into space with all these regulations what's your opinion on that how are new people who are overwhelmed with this how do you encourage them to get involved feel safe be feel smart about what they're doing without having this worry of oh my god i'm violating some kind of big lawsuit and they're just looking at buying like less than five notes total to get started one two three notes i mean i think the most important thing is is to get the information beforehand you can deal with it you can deal with anything if you know the environment you're in so um you can if you've got a geographical scope um you can ask me for what's the guidance in these states what do we think we need you know the thing is that is interesting about it is that um you're probably more likely to be able to buy notes in the population centers so maybe you start there or maybe you start locally with your own state that you're located in or maybe you just have an opportunity to buy in a certain state that's across the country but i mean i think that those are the questions that that need to be answered up front so that you know it's always easier to deal with with what you know than the unknown because the unknown is this monster out there that can attack you right yeah absolutely and i think people are afraid of that because of i don't want to spend five thousand dollars to buy a ten thousand dollar new and we get that a lot right um i just want to test it out but the problem is that you may be in a situation where you're trying to foreclose and you can't because you're not licensed you need to start through the process and most of the time people are you know in a world where it it's it's easier to just do it and unfortunately that's not always true so before we cut you know turn off um i think for me my my question of nathan is is this process of getting into licensing and whatnot is it something that you find one of the biggest issues that most people who come to you struggle with where the number one question or hurdle that people need to get to learn or understand so kind of on the licensing side initially is what do i need again it goes back to that my buddy has this so i just need to get this probably not true or possibly not true so that's where you know kyle jumps in and he's able to ask those questions and i've been on calls with them where you know we were going along very smoothly and then all of a sudden somebody would he would ask a question it would be answered somewhere and he'd be like okay wait a minute let's go back and talk about this so um that and and then once we know what we need i think the biggest velocity is maybe some of the documents the supplemental documents that go in the application um you know i don't have a business plan i don't have a method of operations and that's something kyle can help with too uh kind of on the the attorney side for us to to use on the application submission yeah just to kind of elaborate on what christie just said there um you know the the the regulators offices are set up to handle these licenses in a way that most typically occurs for them so they're not thinking uh in their application process when they set that up they're not thinking of this after market purchase kind of scenario this happens outside of the mortgage space too so oftentimes the um the applications are set up to deal with your typical uh you know non-depository lender who's actually funding loans and some of the requirements are set up that way and so we oftentimes get into conversations with regulators saying well no i don't have a truth in lending policy because i i'm not actually lending but your statute is requiring me to be licensed and and so there there's some back and forth that has to happen unfortunately it falls on the folks at cornerstone a lot to kind of be the intermediary in those conversations and there's a lot of documentation that has to be provided but um the issue is this too that people need to understand is that just because you get uh somebody who's sitting in a cubicle in the the department of finance office within a state it says that says well you're not funding a loan so you're not fitting into our application process that's not binding on a consumer that files a complaint or a consumer that sues you or on a judge says well statute clearly says your activity needed to be licensed so there's that push and pull there we do get into that you know hey kyle why did you recommend this license the regulator says that you know i've got to have a truth and lending policy and you know i'm not a lender and they know i'm not a lender so i just there's some things that have to be worked through in the process that's all i'm saying you mean regulators are making minimum wage kind of money and don't know all this stuff it's amazing right but some of them do you know when you talk to them some of them are super knowledgeable and we'll talk you know and so i mean you just never know what you're going to get in any particular state kyle i'm so glad you brought that up i'd actually just wrote that down of you know you can call the state and get five different answers so thank you for bringing that up like any government agency any government right yeah it's always the same so so real quick before we jump in here you know love followed up with a question here is if a private lender is selling a note to a private company is it okay to buy love as they say before hey it depends on the state that's a big one and b if it's in a state requires you of licensing you can buy the note as long as you are licensed in that state to buy it if that state requires so it's not the matter who buys and sells it it's the entity buying it what is the situation with the entity is it uh entity that needs to be licensed or not and what are you going to be doing as a lender when you buy the note what are you going to do what's your business model hopefully to answer your question so then we're always trying to look down the road and see what's coming and things like that i'm curious from a from a regulator's standpoint we're all kind of anticipating uh maybe not a flood but an increase in non-performing notes coming coming up are you expecting the same kind of thing and and what kind of impact would that have on licensing and this doesn't have to be from an attorney point of view just more of a human point of view what do you see what you're feeling well i am an attorney so i'm i'm sub-human by definition um yeah i mean i think that that makes a lot of logical sense i don't know if there are more um you know relief packages or regulations that are going to come out that are going to prevent people from defaulting loans um i mean who knows things have happened over the last year or two that that i don't think any of us could have anticipated so but it does make logical sense that there's gonna be more uh more notes out there to buy um now what we're seeing right now uh christy you can correct correct me if you think i'm wrong but what we're seeing right now is a lot of states are starting to um get into agency licensing that they didn't have before and they are these newer statutes are very aware of these secondary markets in a way that's different from from uh licensing changes that happened 10 years ago so um california is a good example right so they're they're capturing all debt buyers within their their the language of their their collection agency licensing other areas of focus are medical debt and student loans that's not affecting your viewership here but those are areas of real focus uh that we're seeing a lot of regulation come in but as uh as defaults increase uh wouldn't surprise me if um there's additional regulations that we just don't know what they are i mean i can't tell you um that there's a pending house bill or that they're you know pending bills in any states right now that i'm aware of but um but yeah i i don't think that i don't think it's it's reasonable to make an argument that no we see this regulation going away or reducing i mean i think it's only trending in one direction yeah absolutely that's fun well guys again i'm gonna uh post if you have any questions or concerns you want to follow up um feel free to fill out the form that we're posting to the chat and also you know feel free to ask a question there if there's something specific you want to learn um you know this will go back to christine kyle um and i think it's at the time i talked to you i think they will clarify for everyone this is a space that it's not a guess no on licenses right i went to today hoping that they would say well the certain states were to absolutely no we're absolutely and i'm learning quickly unfortunately that it's not always that crystal clear and why um and i think that was well presented today i appreciate you guys coming in yeah let's go thank you thanks for having us yeah absolutely so so uh as we all say um we do this every week we do a webinar a week in our facebook group uh feel free to tune into it we'll be posting on youtube and our facebook group as well as our website a lot of stuff um always tune in ask questions there's never a stupid question but i appreciate everyone jumping in today and uh from here we're gonna disconnect from everybody and hope everyone has an awesome weekend and uh enjoy thanks so much everybody thank you licenses now this isn't realistic licenses this isn't licensed to do anything fun this is simply to own debt and this is a state by state sometimes hour by hour change i think one of the reasons we don't talk about it a lot is because it's it's so different depending on the state every state's got different rules and different it's it's complicated so it's it's not something that a lot of trainers want to get into because it's complicated very true and there's there's a lot of information and it's it's a lot of a lot to sift through yeah sorry about that guys so there's an echo craziness but uh so i'm glad to see that we're getting into a topic that people need to learn about on a requirement of basic understanding of notes however that it's something you need to learn as you move along i don't think it's the first thing you need to learn about no that's true right and yeah and we're not trying to like scare anybody either there's an expression in french to suffer and it just means anything's possible so so it's it's all you can do it all and it's not impossible but but there is a way in a procedure so you're not meant to scare anybody not meant to freak anybody out but it is stuff that you need to learn about and i think for most people they don't realize the struggles of understanding what could happen if you don't follow the rules and i i think dead license is one of those kind of topics that most people rumor has it i'm not sure or find out when it's too late yeah what the rules are um i shared before we had somebody where i was talking we have our investment community which is the weekly mastermind group if anyone did should jump it in they were talking about joining the group and they mentioned they bought two notes illinois and jersey and they presumed they would go performing it didn't though it was no big deal however run into the problem was now she's not licensed in illinois and she didn't know she had to be and she wants to start now what do we do shook my head right this is just frustrating so today we're bringing on some experts in the space um just make sure you understand that they they're unable to answer specific questions about every single state because that's sometimes an hour-by-hour change and a lot of information that is not available all the time so we want to make sure you guys understand we're going to be asking some general questions but we want to make sure that you understand the basics of it right um when you need the specifics answers questions how much what the process is we need to reach out to cornerstone and get your licenses through them right so i'm letting you guys know that they're going to have some general questions today however once those questions are getting in depth into a deal specific situation please reach out to the cornerstone and get them set up to help you along the process of getting licensed so without further ado kyle christine welcome to our weekly webinar can you share a little about who you are what you've been doing what's this whole thing about note pet licenses sure david it's our pleasure uh first of all thank you for having us on uh christy and i do a lot of work together uh certainly on a weekly day basis and uh almost daily basis uh at this point and uh i'm an attorney i'm physically located in michigan uh licensed to practice uh and litigate in michigan and ohio but um i've been working closely with cornerstone support for about a decade now in assisting their clients kind of navigate the landscape of licensing in general um i'll let christie kind of talk about what the history of cornerstone is but but my history with cornerstone is that um you know the landscape of licenses required to purchase debt across all different uh categories and asset classes has been a constantly changing environment especially over the last 10 years so um different states have decided to license that never did before they've they've decided to enforce their licensing statutes in different ways and of course your business that you're talking about has really uh boomed over the last decade or so uh there's a lot more people involved and um and because of that there's been a few uh potholes that people have stepped in unknowingly and so we i think we can talk today about some of the general uh things that that your viewership needs to be aware of and um then maybe get into a few specifics as as we go along but uh basically i've been involved to give legal opinion and kind of guide people from a legal standpoint uh through this this whole process and uh christie's christie's team goes out and gets the job done and uh kind of can talk about um timing and some of the difficulties and application process and those things too so christy if you want to take it from there thank you kyle yeah this is christy barger i've been with cornerstone for 16 years now our company was formed back in 98.

um back then it was our specialty was standard third-party debt collection because that's really all anybody talked about as the industry has grown and changed we have grown as well and so we do lending licensing mortgage licensing accounting licenses all kinds of different licenses that um are needed in our space so when i have a client reach out to me and they say the word i buy for the words i buy definitely tell them we're going to need to talk to an attorney there's a couple layers of licensing that you have to look at some of this state statutes for the debt collection cover the the activity of buying debt uh saying you need this license if you if you're a passive debt buyer or an active debt buyer but then on top of that the specialty licenses that kyle was talking about that's kind of where his expertise comes in he's able to ask very specific questions uh of the people and find out exactly their business model and then he can compare that to the statutes and come back and give a legal assessment which kyle said is our marching orders so we um we do the paperwork with the paper pushers we um help with the filings on the online a lot of them are on the mls which the system can kind of be a pain so our girls are trained on how to get through that process um a lot of licenses have surety bonds and so we've got a department that handles that here at cornerstone and then we also have an insurance department because with these this type of activity you want to make sure you have the proper loss or i'm sorry the proper insurance in place to cover you you know insurance um different types of policies that um you know we can write specifically for our industry so if something happens unfortunately you've got some coverage there so um that's kind of where cornerstone does and we're a great company and it's we've helped a lot of agencies over the years and we enjoy it amazing good so i i think some of the chat questions we already got is you know let's get back to the basics right debt license is only required myth right when you want to service loans or when you you you don't need a license if you have a service we hear that a lot number one myth i guess that we hear is as long as you've got a servicer you're good right no i think i can lend some some clarity to that so um here's many many of the state statutes say something uh similar to let's say we'll just pick one out pick out illinois is a good one because you you brought it up david um so and i just i just brought this up and again we don't want to get too deep into state specifics but in illinois it says a person must be licensed to broker fund originate service or purchase residential mortgage loans so the act of purchasing that loan and yes it's subject to a low volume requirement so if you're you know if you're under your your three three loan minimum there um it's not triggered but the bottom line is just purchasing the mortgage account triggers a residential mortgage license there in that state and so here's how um these things happened in the past clients have come to me and said ah we got you know we got pinged by this state and i have a cease and desist letter that that's kind of typically how a regulator will start out their enforcement process um well what they do is they go to the large servicers and they say please let me know who all your mortgage companies are that own mortgages that you're servicing in our state and then the servicers will provide a list of those people and very simply the regulator will just bump that list up against who's got licenses and so everybody who is doing business with a servicer in illinois uh once that regulator comes in and does an audit but isn't licensed according to the state of illinois they're going to know that reveals it immediately that okay we've got these 27 people out there that aren't licensed but they they've got business that they've placed with a servicer so we know that they own the account so um doing business with the servicer in and of itself can be the source of what exposes you so it's just important to remember that and there are many statutes out there that will create that licensing burden not not a debt collection license these are actually lender licenses falling under the scope of mortgage lender broker servicer and i say those three things because unfortunately uh when you kind of let off you said all right we've got uh 50 states with 50 different rules well they're and that's true and and they've set up their statutes very differently some will licensed um lender broker servicers all under one statute and one license some break out broker and lender into one and a servicer into another one and then others will break out all three into separate ones so it's it's a very different scheme for each state but i just want to let your viewership know that just the act of owning the loan itself can cause you to need a license um and then as a subset to that there are other activities that we can talk about that will trigger a license that maybe are within uh your viewership's ability to decide to do or not do to outsource or not to outsource so there are some of those things well you know i i've engaged an agency to do this i have a foreclosure law firm to do that all of those things are factors that need to be considered and that's where the complexity really jumps in gotcha so is it true that there's some states out there that don't need a license but you only need a bond yes so um there are some states you don't need a license um bonding is more of a question for christy but um honestly the the if you don't need a license here's what i want to say about bonding and then i'll hand it off to christy if you need a license oftentimes a state will require bonding as part of that license application process but if you don't need a license most states contain an exemption um to their bonding requirements or certificate of authority requirements for this type of activity so and then i'll hand off the bonding question to christy because i think that she's got a department really that's that's far more um it has a lot more expertise than i do in that yeah thank you kyle so kind of the only states that require bonds only is going to be uh texas and new jersey and that's under the debt collection statutes um that's going to trigger the need for that bond uh usually there are maybe a 10 000 bond and you're paying a percentage of that with the states with the more complex licenses like the lender and the mortgage those do have bonding requirements they're each state one thing to know is each state is specific specifically has their own bond so it's not like you can get one blanket bond i get asked that a lot can i just get one bond for all states fortunately no because the states actually have their own bond forms so um you know someone working nationwide is going to have really a good number of bonds in place for all the different licenses um maybe even in one state you're going to have two licenses and you're going to have two bonds but that's part of the process that we we work with in this comments and we have a surety a department run by joel blackburn here at cornerstone he's great and he can answer any bond questions and and helps the process and gets those bonds over to our team members to submit to the state for our clients awesome so let me back up a little bit i think that missed part guys if you're looking to go get insurance or go get bonded or get your license you can go directly to cornerstone and get the entire process done with their assistance they'll make sure you go through all the check boxes and go through the whole process and let you know you need or not needed by evaluating your situation right so they're like the middle person to make sure you need or don't need it um you can do the homework yourself but you may need a legalese dictionary with you to make sure you understand what it means and a lot of immunity to law a lot of questions out there right so yeah david that that's great thank you for saying that um one kind of thing you know when you're doing the application obviously you can do it yourself um our staff is trained to know the applications they are assigned certain states and so they kind of know that the nuances or the weirdness like you can't staple some license out or license applications and that's just the stupidest thing ever but we have the knowledge and the girls work closely with the regulators and um like yucky said we consider ourselves a one-stop shop we'd like to keep everything under one roof and take care of our clients completely yeah amazing i think that most people you know they don't know about this and be a loss nathan what's been your experience with people who get involved in this or get lost at this quickly i you know i it's it's in so many instances and notes uh there will be a question that comes up and then the answer is well it depends and it's it's the worst answer you want to hear but it's it's the most accurate uh because it really does depend if you're talking about one state versus a different state and a you know a bond versus a servicer license versus a debt collector license versus a loan lice a lender license like there's a lot of different factors and so it's it's difficult to just say this or that or you know there's no blanket statement where you just say yes or no there's it's not a just get this and you're fine you know it really depends on your specific situation so it's good to get with professionals that can help navigate that nathan usually my conversations i'm sorry kyle normally my conversations start out with i just want yes or no tell me yes or no and i'm like no it's not that simple if it was i wouldn't be sitting here so um you know i kind of tell them kind of the complexity of it and how you know an interest maybe or an interest rate might be a trigger or um you know first or second mortgage i mean there's so many different um nuances and that's where kyle jumps in and he is knows this and can check statutes and it is amazing to help god is in the right on the right direction for the clients well and it's really what we it's what we do it's part of what we do so um you know 10 years ago we dove into this um the process was a little bit different i think that things were more simple uh they've gotten more complex but then also it's it's been a good journey uh for me to be on with my partners at cornerstone um to really learn what people need so so what we've discovered and we've been doing for years now is if i provide a legal opinion based on somebody's business model um we always get back on the phone after that to talk through the specific nuances because they're i can't know your operations the way you know your operations even if you're small i can't know what you're going to do on a daily basis the literally licensing can come down to what types of conversations are you going to have with the consumer and so um certain states consider that that conversation to be loan modification just having the conversation so and loan modification can be a trigger for a broker license so um those it's that nuanced and so you have to have the follow-up conversation once the research is provided once the general road map is provided there's a large conversation about okay but what are you actually doing and how are you doing it and you may be able to make some decisions in a state like hey on a on a on an account in washington state i'm not going to do this because if i do it's going to be a license whereas if i just tell my servicer somehow hey you need to have the loan modification conversation then i don't need a license that i would otherwise need that may have value to you absolutely the other thing that's really important and and i think that i want your viewership to understand is that both from cornerstone standpoint and mine we are we don't just simply say you know what let's err on the side of licensing because and that would be kind of an easy cop-out right like there's a license out there i think you might need it let's just recommend that you need it but um the problem with that is is that the cost of licensing goes far beyond the up front seven hundred dollar fee or twelve hundred dollar fee um you are opening yourself up to audit uh from a state you're opening yourself up to regulator involvement in your business so this is not a question there's some there's some downfall or some some pitfalls to over licensing as well you don't want to be under license that creates exposure obviously but being over licensed is going to cost you money in the long run because states follow up states eventually get to the point where they they audit you and they want your records and it's time and time is money so it's a question you want to get right not necessarily just say you know i want to be so safe and get three or four licenses i don't need either right yeah and one important thing um that i like to make sure everyone knows is this isn't a one and done conversation so we we you talked to colin out today and then you know six months from now this some laws may have changed statutes may have changed states positions have changed so this is an ongoing conversation that companies should have um you know if they go into new states obviously that's a trigger to have another conversation if you're changing your business model completely uh or if you just want to check in and say hey this is what i have what do i need and that's something that should be done you know you want it's it changes every day or every hour like you said but it's something you definitely want to look at um you know we usually suggest once a quarter or at least you know once a year um to make sure that you have the proper licenses in place for example you know recently californian got some new laws they'll be going to infect zoo in uh minnesota so if you did your homework a year ago and didn't know about these laws you buy them you could be caught in a situation could you guys give an example of what happens i'm in a state that requires licensing what are some of the possibility downfalls of not having my license and own the loan yeah so um and i think i think the most common uh scenario for this to come up for us is when people have been doing business and they go to apply for a license that they should have had previously they just now realized okay i need this license but on the application um there's a section that says have you already been doing business and and you know they've got to answer truthfully and have to say yes and christy i think that you can probably comment about kind of what some of the remediation looks like in those scenarios yeah we've seen unfortunately we've seen fines issued by the states we've seen it affects other states so say if you get a disciplinary action in one state when you upload that into the nmls other states can look at it and so then they may come say hey if you're working in illinois are you working in massachusetts are you working in new jersey so it it's not just a one-time issue for you it follows you unfortunately uh throughout your your licensing life i will say this that every single one of the statutes that provides the authority for a regulator to issue a fine or a cease and desist letter or something like that creates a difference between a knowing violation and an unknowing violation so that's one thing that should put your viewership at ease a little bit that you know if you didn't enter into this with the intent to skirt licensing laws you know really the the issue becomes um you know potentially yeah you could get a a fine that's probably not going to be a huge amount of money but um the issue becomes that the regulator wants you to license they want you know if you're coming in and you're saying hey i want to be licensed i want to do this right i didn't know i needed this i'm not saying that you know you're in the principal's office for a moment there um but they want you to come into the fold to be licensed and to kind of remediate that so they're going to make a pathway for you to do it also um there's really it never makes sense to say i didn't license already and i'm just finding out that i needed to therefore i'm going to continue on not being licensed that's really never but people have that idea that you know if i don't get this i'm gonna be penalized yeah or hey i didn't get caught yet so it's okay right right right yeah and usually if there's a big issue going on we always try to connect to them with an attorney in the state you know you want to go to the state with your hat in your hand like you know and i didn't know there was licensing i want to do the right thing now and so that helps with those situations too is to you know get somebody that's can act on your behalf in a legal uh legal way and hopefully get that fine or lowered or maybe gone for completely i think we're coming to the end of it now but um you know you probably could still right now write a letter saying uh i wanted to do this but covet yeah i've had that work for a couple of clients over the last year right exactly so you mentioned before uh sometimes just the servicer having a servicer and the regulator will come do an audit and that can be the trigger for you uh kind of being brought out of the open what are some of the other triggers that can that can kind of put you on the radar well i would say the most common one is a complaint from a consumer uh or a consumer just simply saying you know who is this person that bought my note um you know i'm talking to them and a lot of people you know they're pretty savvy they'll look up and see if you're licensed those things are public record and if you're not um they'll they'll contact the you know whatever office in the particular state that's regulating that that's probably aside from the regulator servicer audit that's far and away the most common i presume defendants the borrowers attorneys can find this out and then hold up in in foreclosure court the same issues absolutely uh absolutely true now you know under not so much in the mortgage laws but in other areas of debt buying other asset classes um there are statutes that indicate that you know you either can't collect at all or you can't collect the interest and things like that so it's very state specific not so much in the mortgage space but you know i don't know if some of your viewership uh potentially is buying other types of of accounts as well so um that that's kind of where that lands but um you know the bottom line is these things are not secret people can look up whether or not you're licensed and so it's pretty pretty discoverable yeah uh i'll leave you some feel some of the questions are coming in as well yeah i had one others yeah excuse me um so let's go pick on illinois again just since we're there but uh i'm not a huge fan of illinois but i don't think millionaires are we're already there so that's fine so uh my question was what is it just mortgage um mortgage debt that needs licensing or like what if i've got a contract for deed or is that against state specific well it is state specific but the thing to remember in illinois is that here and again here's the language are you purchasing a residential mortgage loan so uh if you're i would say if you're purchasing the obligation for the consumer to pay you on a contract that's secured by real estate it would fall within that definition now the nice thing in illinois and this also happens i think christie alluded to it earlier and this is one of the reasons why um it's important to get a legal assessment i think is because certain um elements of the licensing process will exempt you from other parts of it there's a number of states where that's true illinois is one of those so um if you get your residential mortgage licensing act license in illinois licensees under that act are exempt from the collection agency licensing in illinois so you really only need one license there um that's not always true but it is true in a number of states so again you know you get into specifics but getting the right license can mean you only have to license once and i think that's the answer to the question some of the questions we've had is like being the top three states to get the license and the question is what are you doing right are you using a servicer if that changes if you're using a servicer there's certain states that don't require you to have a license if you have a license servicer handling your everyday interaction with the borrower right so if you're talking about self-servicing now we open a whole new can of worms of i'm self-serving alone you need to get different licenses based on that scenario but here's the thing so when we talk to people i don't let them say um i've outsourced my servicing or i'm self-servicing because people mean different things when they use that word they're not necessarily using the legal definition so really i don't even want to know what you think you're doing i want you to i want you to lay out the specifics of what tasks are you undertaking and how are you doing those things and then we'll kind of kind of funnel that into the um definitions and the statutes so that we can figure out a plan that's the way we go that's huge that's very very big you know that's something i reluctantly i think i mean christie's not in conversation like i just need to know and the problem is verbiage that we use can be translated to different things right i do everything with services well do you do everything with service or do you mail a letter to your borrower well i do matter yeah they have everything but right nathan sent the man letter he handles that part now is it triggering anything by doing demand letter where services does everything else so absolutely right and and oftentimes people will say say back to us um well should i not be doing that and the truth is that there's no wrong answer there's no right answer to what you should be doing i just need to know what you are doing and then we can identify for you you know if you think that's a part of your process you can take out in order to avoid some licensing then fine but those are your intern that's your internal decision to make all we can do is kind of lay out the landscape lay out the variables and then you know you pick and choose what you're going to do yeah okay we've got some questions that came in here we've got uh i may not get to all these but let's see what we get here so joshua scott's asking uh when you start a foreclosure should your attorney be helping with this making sure that you're compliant before you start filing um i mean sure i mean i can't i can't speak to what what an attorney you know is going to do with regard to your licensing and they may not be an expert in licensing um and they probably aren't in fact they probably aren't there's i mean you have to really really um you know have almost no social life whatsoever i'm going to answer you so yeah i agree i mean nathan asked that question you know basically from josh's point of view but your attorney is there to do the legal process for close on that asset their job is to know the law of what can be foreclosable and what can't your business and what you do your business you're licensing your business it's not involved with the foreclosure process they don't check to make sure you're licensed because they usually make sure that that collateral file is closed is proposable that's a word right legally able to foreclose on the side of the fact you collecting debt is not in their world they just want the numbers from that so yeah yeah so they probably don't know uh if you are or need to be that that's not part of their yeah expertise some will say i think so you know we've asked many attorneys hey what do you know about georgia right because georgia has a law that i believe it's five or under your personal name blah blah and we've asked for quotation like i don't know like that's not their expertise so we get them confused a lot of times and think that because they know foreclosure we have to know the lending licensing laws and they don't yeah and actually cody's got a question kind of along those lines about um kind of exemptions per state uh like for example georgia where there if you have less than and and this is the number that i've i've heard all kinds of numbers less than five less than three uh i've heard none there is no exemption so again i i imagine that stay specific any comments on that uh it's very state specific some some don't have any low volume exemption at all so um and and i think why you've heard different different numbers at different times is george is a little bit unique uh because the language there seems to um confine the low volume exemption to an individual and doesn't make it available to a corporate entity um that's unique um most of the most of the statutes that have a low volume exemption don't don't talk about it in that way but it's just very state specific and usually usually it's somewhere between three and five uh others also will allow it to be between three and five annually or three and five in any 12-month period so you know if you can stack up your 12-month periods you may be able to accumulate some loans there without you know without license so i just want to clarify what you said there for those listening when they say individual meaning in your personal name right um there's always questions about being an ira name versus personal name like can ira be supplemental for your personal name but when it's you cannot put into your company name llc or entity you can from where understanding is put loans be exempt from the licensing in georgia if it's in your personal name just like you created it and you did your own thing that's the idea of um we've heard five or four three like you said but the personal name is the key there for what we need on the show david i agree with that here's the thing so if i put on my corporate advisor hat i would tell people the potential liability in the consumer lending space these days would make it um absolutely a terrible recommendation on my part to put a note in your personal name i i just think that um you know christy you can talk about what licenses generally cost but i mean you're talking about a license that costs a thousand dollars or something in that range i would imagine and to expose your personal assets to liability is not a good decision in this space not in the environment we live in today so and before christie jumps in there is that an annual cost or a one-time fee so with the licensing there's an initial cost to get it in place it's usually a little more expensive initially because the state has to do a lot of background checking and vetting of the company they do renew every year so there's some type of filing that has to be done sometimes there's supplemental filings like there may be a license annual report or a mortgage call report um again each state's different with what they require but they all do redo they're not one and done licenses gotcha and i guess the annual cost is usually a lot less than an initial amount it can be you know some of the states do have a less um a smaller filing fee for the renewal other states have the same when you as when you initially get it and then you've got that bond fee if the state has a bonding requirement you also have um that that reduce every year so that's additional fees that are paid so uh victor wagner's got a couple questions in here um this first one i think we've covered already but he's he's asking is there such thing as like uh if you buy a license in one state does that carry over into another state i think we've already covered that the answer is yeah i think on yeah the that's a hard no that's a yes or no question right yeah that's not an it depends that's a no and then the second one here i'll just read it how he's got it written because i'm not quite sure what he's asking he says does any state require a licensee to report unlicensed entities as a condition of maintaining the license uh not that i'm aware of yeah so i can write out nathan say nathan is not licensed you know because georgia requires me to let them know if i know like insurance i guess okay you know someone's robbing insurance companies report the bad you know i think that's the angle yeah interesting yeah and one thing too is i i know we're all friends in the industry and people talk to each other don't get the license that your buddy has that may not be what you need i have a lot of conversations about that well so and so has this license so just give me these no that may not cover you we like to be quick and easy right we always want to get past it yeah i wish it was that simple but it's not and then chrissy can you give us an idea we we've talked about it briefly but like uh when you say set up fees versus annual fees and things like what kind of range are we looking at like is it like kyle mentioned like about a thousand bucks or is it more like five thousand or yeah i mean there's a thousands kind of a good average i would think there are some that have really high filing fees um i've seen 10 000 filing fees in a couple of states so it really just depends on the license that's being applied for um again at renewal time it's usually a little bit less i kind of like to give a 60 40 range of how much it reduces um but that's not every state but that's that's a good bit of them who's charging 10 grand oh and here's what really gets you too the bond amounts so for the collection agency a little bit explain the bonds to issue a little bit yeah so the collection agency licenses may require a ten thousand dollar bond it's pretty simple um some of these mortgage licenses you start out at a minimum and maybe twenty thousand fifty hundred thousand five hundred thousand uh but as you do your business um you're reporting loan balances and work done and that can affect the amount your bond has to be uh be filed for so at renewable time you're increasing your bond which is going to increase your filing fee or your bond premiums um each year as well essentially obviously you want them to go up because you're you're doing more work but it's going to cost you so for a ten thousand dollar bond am i handing over ten thousand dollars yeah so um i like to explain it kind of like an insurance policy so think of a premium um a ten thousand dollar bond i would say probably is going to cost you around 150 a year um but it is a yearly fee yeah okay yeah we've had that question a lot you know uh 10 grand that's a lot to put up it's not that you're putting up 10 grand it's that you're buying a bigger package when you buy a term life insurance product for a million dollars you cannot prove a million dollars right um right and it does the the bonding amount does uh read a lot it's it's based on your financials of your company so if you're a new startup company you may have to go to what we call high risk uh it's not saying you can't get a bond you just may have to pay a little bit more for it like car insurance it is and so that's yeah exactly and you know we we try to get the best price available and uh we uh watch the bonds for our clients and uh keep them as cheap as possible but they are they they do change sure yeah all right victor's got one other question here it says uh are you aware of any state enforcement actions against an s uh self-directed ira or 401k plan as an unless slender um i am aware of okay when he says enforcement action um let's just say that there are lots of different uh layers or or or manifestations of that so what doesn't normally happen is uh smaller players like this um the enforcement action just generally does not come in the form of a lawsuit or something like that that you know the state attorney general is not getting involved in that way what will happen is um you'll get a letter you'll get a letter from the regulator saying you know we have information that you're doing business unlicensed um and they'll ask some questions are you doing this business and that's how it will start um and then they're really trying to get to the point of um you know did you do something that they think they're going to issue a fine are they going to issue a cease and desist letter um those kinds of things and then you'll have an opportunity to remediate so i would i would describe that as an enforcement action that's action being taken by the regulator enforcing the laws but maybe is taking on a little bit different um connotation then there's an enforcement action like what we see potentially coming from the cfpb uh against collectors or lenders in the consumer space that are large players okay so that that's kind of how how i would describe it normally happening so there's no real straight protection if i say listen i'm not gonna put any loans in my company i'm not gonna put loans in my personal name i'll use my self-direct to protect me self-direct diaries are not protected and still need to become licensed correct correct right so whoever owns the loan whatever that entity is whether it's you as a human being or an llc or a regular c corp or whatever um that entity needs to obtain a license in various states based on various activities yeah um yeah do you want that llc or the incorporation there you don't want to go license you know christy barger so one of the questions was a good question if if it says like if you're a scenario where you didn't get licensed and you learn about the license requirements and you get licensed and you possibly got fined because you didn't do what you're supposed to do would this pose a problem when you go to get the license then or it's like you gotta find we'll still accept your license or they hold you off and say well because you failed to let us know before you know you won't be able to get your license yeah i haven't seen that i mean it does happen where you're reporting unlicensed activity um i've never seen an estate say too bad we don't want you in our state now because he says it's the violation can be visual in the mls so yeah the nmls system is what the mortgage space kind of uses for a consolidated place for their licenses over the years the collection industry has kind of jumped on it so a lot of the collection agency licenses are on there now so when you upload a document to say you're filing for a connecticut license and you're uploading a document any other state could look at that now i don't think states just go out and say hey let's try to find somebody who's got in trouble and they might but but it is on the nmls and it can be seen by other uh other states licensing boards cool one of the questions we have here is are you guys attending any kind of conferences i know the conferences are kind of ramping up now yeah cornerstone goes to several a year um we kind of look at the first of the year and see what's coming up obviously we're always at aca and rmai those are some of the standard conferences we go to we have been to a couple of the mortgage uh conferences so always looking to go to you know if there's a good one you know about that we need to go let me know um so we we do stay on top of those and try to go as often as we can i would say the same for me and just so you're you you're aware um i'm not an employee of cornerstone i'm an independent attorney uh one of the things that we do in issuing legal opinion for people is um advise them that the opinion is between myself and them their obligation or desire to share it with cornerstone is really up to them and one the reason that that's important is because um i then have attorney-client privilege with them so the things that they would tell me and divulge uh if we keep cornerstone out of that portion of the conversation are still privileged and then we can share the research with them and you know all of us can kind of collaborate after that but to that end um i've been uh at many conferences um with christy or people on her team so very often we're uh we're together in those things yeah there's some note conferences coming up this fall that might be yeah and i think that most people don't know what the conversation you mentioned before they're not the typical note conferences that we're all aware of right we have a couple coming up here um you know nathan and i will both be speaking out but not um those conferences are typically not what cornerstones going to but we'll share with them that you know the dme that's coming up september um and then node expo and paper source and whatnot um it'd be great to see them out there but understand that they're a different level typically um the level conferences they were speaking about before are more higher level than the typical ones we're all accustomed to um where we're focusing on the note side stuff the side of servicing and licensing is a little bit grayer server seems involved with us but licensing is a little bit different that's all about regulations and um and whatnot regulators and whatnot so um i'm just trying to create some more questions as they come in here uh for the different feeds everything else so guido i haven't talked to guido for a long time good to see you guys sort of see it he says if i sign a purchase sale agreement for a note in a new state that i didn't do business in before do i get licensed before signing the sale like before closing basically i'd like to have to get that license before they completed the sale um not necessarily but i guess here's the the issue there um is that before you take any action i mean it potentially is going to hold up you taking action so um christy what would you say i know you hate this question but i love telling i love putting you on the spot uh what would you say the general timeline is to get um you know a mortgage broker service or lender license you're probably looking at about three to six months again depending on the state some of them have you know fingerprinting which has to that takes some extra time to process um you know i don't really think the states are behind because of covid they've done a really good job you know staying up to up to date on their stuff but three to six months is the dates i'd normally drop when i'm talking to someone about processing times and there's no expediting because that's that's always asked which there was but the states it's kind of you know first come first serve you fi the sooner you file it the sooner you get approved to answer guido's question it is um probably something he wants to know in advance right so if i'm moving into a new state number one do i need to be licensed there number two um what is my three to six months gonna how is that gonna impact my business plan here so um you may be able to sign a letter of intent or understand that you're going to close on this note at a certain point in time in the future and be able to initiate the process of getting your license in place earlier to reduce that that exposure there because again obviously time is money and you want to jump in and get the low hanging fruit and get you know get the thing back to performing or whatever you're going to do [Music] yeah steven burks got a question here about uh consultations with cornerstone uh do you is there a cost associated with the consultation so there's not so if someone called in and was asking me questions i would answer obviously the best of my ability um when we started needing kyle we reached out to him we jump on a call for the three of us and um there's no calls for that consultation um i'll kind of let you explain where it takes it from there because that's where you dropped me off but um no church to talk to me and no church to talk to kyle initially yeah and then i i would jump in with somebody once they've given me a description of i mean the typical conversation is hey what made you place this call in the first place are you moving into a new line of business is there a different geography going on uh are you just you know did something happen where you became aware of a license whatever the reason is and then we asked people to describe what we were talking about earlier the exact tasks that they're undertaking where they're doing it from um and how they're going about their business and then what i do is normally follow up that kind of an initial call with a proposal to say uh hey look this is the research i think you're asking for this is the amount of time uh and effort it would take me to put into it uh this is what i charge for that please let me know if you want me to go forward with it so um then i don't do anything unless i get the green light from them and that all happens between myself and them individually again christie just mentioned she gets kind of kicked off the call then at that point um and then once i provide the research back to them that's when we schedule the follow-up call to talk through the nuances and things like that and then again it's up to the note owner to decide whether or not to engage cornerstone for all or part of what i've recommended and then there's more collaboration after that point but there is that moment kind of in between where it's just uh me as the attorney the client is the client having that kind of private conversation about what they're going to do got this question here from uh love mckenzie uh i've got a follow-up to your question kenzie um are you saying that i have to have a license to sell notes so i would actually go back to mckenzie and say well do you own them or not are you brokering them or are you owning them and then selling them so yeah well right but there are at least a couple of states um that that do have language in their statute that um indicates that you need a license to sell notes now again your um nathan your your question is right on point if you own them you may have needed a license just to own them before anyway um but uh and and then there's the question about okay i'm i'm i'm selling these notes but i'm brokering it so i'm not in the chain of title and that is another nuance that could affect licensing in every single state so that's a very very specific question that would need to be evaluated under the statutes of every state yeah so i i want to make sure everyone knows we i just posted the form uh if you want to get their information we're going to do is we have a form together you just put the information there and i'll share with kyle and christy um your information um so they can follow up with you but you also can follow up with them um and i'll share their information um as we get along with them so i think that's a big thing for me for brokering notes we hear a lot of people get in this case and say hey i have wholesale no uh you know properties i've bird dog before i've gone out there and look at houses and i just get my simon fee and move on what they don't realize is notes is not like brick-and-mortar real estate that you can't just go and grab a note and sell it to a person in certain states you need to have a broker's license in certain states um you can get fined you can be regulated you can be in trouble for just trying to make a couple dollars so you need to make sure that what you're doing now i'm saying is if you're in a situation where you're broken you know you're connecting to people what not it may not be your situation but if you're truly trying to broker you can get yourself into some big trouble um so be careful with that stuff brokering is a dangerous space um in our note space a lot of people swear they're direct to the seller we've talked about that before you may not be direct to anybody but another broker who says it's a seller or whatever um or what that so i'm glad you asked that question love i appreciate you jumping in there um and we'll definitely uh you know respond to your other question later um she said she's a real estate broker unfortunately real estate broker and notes are completely different world um you know can you real estate broker in a state without having license nope say anything with your notes but it's a different test it's not the same angle so i appreciate you jumping in there and asking questions i think for me um with with licenses it is there are so many nuances of notes that license is another icy on the cake and another cherry like another thing to learn right we learned about you know stash limitation you learn about the fact that of you know is a paper foreclosed or not now licenses is it hard for a newer investor to get into space with all these regulations what's your opinion on that how are new people who are overwhelmed with this how do you encourage them to get involved feel safe be feel smart about what they're doing without having this worry of oh my god i'm violating some kind of big lawsuit and they're just looking at buying like less than five notes total to get started one two three notes i mean i think the most important thing is is to get the information beforehand you can deal with it you can deal with anything if you know the environment you're in so um you can if you've got a geographical scope um you can ask me for what's the guidance in these states what do we think we need you know the thing is that is interesting about it is that um you're probably more likely to be able to buy notes in the population centers so maybe you start there or maybe you start locally with your own state that you're located in or maybe you just have an opportunity to buy in a certain state that's across the country but i mean i think that those are the questions that that need to be answered up front so that you know it's always easier to deal with with what you know than the unknown because the unknown is this monster out there that can attack you right yeah absolutely and i think people are afraid of that because of i don't want to spend five thousand dollars to buy a ten thousand dollar new and we get that a lot right um i just want to test it out but the problem is that you may be in a situation where you're trying to foreclose and you can't because you're not licensed you need to start through the process and most of the time people are you know in a world where it it's it's easier to just do it and unfortunately that's not always true so before we cut you know turn off um i think for me my my question of nathan is is this process of getting into licensing and whatnot is it something that you find one of the biggest issues that most people who come to you struggle with where the number one question or hurdle that people need to get to learn or understand so kind of on the licensing side initially is what do i need again it goes back to that my buddy has this so i just need to get this probably not true or possibly not true so that's where you know kyle jumps in and he's able to ask those questions and i've been on calls with them where you know we were going along very smoothly and then all of a sudden somebody would he would ask a question it would be answered somewhere and he'd be like okay wait a minute let's go back and talk about this so um that and and then once we know what we need i think the biggest velocity is maybe some of the documents the supplemental documents that go in the application um you know i don't have a business plan i don't have a method of operations and that's something kyle can help with too uh kind of on the the attorney side for us to to use on the application submission yeah just to kind of elaborate on what christie just said there um you know the the the regulators offices are set up to handle these licenses in a way that most typically occurs for them so they're not thinking uh in their application process when they set that up they're not thinking of this after market purchase kind of scenario this happens outside of the mortgage space too so oftentimes the um the applications are set up to deal with your typical uh you know non-depository lender who's actually funding loans and some of the requirements are set up that way and so we oftentimes get into conversations with regulators saying well no i don't have a truth in lending policy because i i'm not actually lending but your statute is requiring me to be licensed and and so there there's some back and forth that has to happen unfortunately it falls on the folks at cornerstone a lot to kind of be the intermediary in those conversations and there's a lot of documentation that has to be provided but um the issue is this too that people need to understand is that just because you get uh somebody who's sitting in a cubicle in the the department of finance office within a state it says that says well you're not funding a loan so you're not fitting into our application process that's not binding on a consumer that files a complaint or a consumer that sues you or on a judge says well statute clearly says your activity needed to be licensed so there's that push and pull there we do get into that you know hey kyle why did you recommend this license the regulator says that you know i've got to have a truth and lending policy and you know i'm not a lender and they know i'm not a lender so i just there's some things that have to be worked through in the process that's all i'm saying you mean regulators are making minimum wage kind of money and don't know all this stuff it's amazing right but some of them do you know when you talk to them some of them are super knowledgeable and we'll talk you know and so i mean you just never know what you're going to get in any particular state kyle i'm so glad you brought that up i'd actually just wrote that down of you know you can call the state and get five different answers so thank you for bringing that up like any government agency any government right yeah it's always the same so so real quick before we jump in here you know love followed up with a question here is if a private lender is selling a note to a private company is it okay to buy love as they say before hey it depends on the state that's a big one and b if it's in a state requires you of licensing you can buy the note as long as you are licensed in that state to buy it if that state requires so it's not the matter who buys and sells it it's the entity buying it what is the situation with the entity is it uh entity that needs to be licensed or not and what are you going to be doing as a lender when you buy the note what are you going to do what's your business model hopefully to answer your question so then we're always trying to look down the road and see what's coming and things like that i'm curious from a from a regulator's standpoint we're all kind of anticipating uh maybe not a flood but an increase in non-performing notes coming coming up are you expecting the same kind of thing and and what kind of impact would that have on licensing and this doesn't have to be from an attorney point of view just more of a human point of view what do you see what you're feeling well i am an attorney so i'm i'm sub-human by definition um yeah i mean i think that that makes a lot of logical sense i don't know if there are more um you know relief packages or regulations that are going to come out that are going to prevent people from defaulting loans um i mean who knows things have happened over the last year or two that that i don't think any of us could have anticipated so but it does make logical sense that there's gonna be more uh more notes out there to buy um now what we're seeing right now uh christy you can correct correct me if you think i'm wrong but what we're seeing right now is a lot of states are starting to um get into agency licensing that they didn't have before and they are these newer statutes are very aware of these secondary markets in a way that's different from from uh licensing changes that happened 10 years ago so um california is a good example right so they're they're capturing all debt buyers within their their the language of their their collection agency licensing other areas of focus are medical debt and student loans that's not affecting your viewership here but those are areas of real focus uh that we're seeing a lot of regulation come in but as uh as defaults increase uh wouldn't surprise me if um there's additional regulations that we just don't know what they are i mean i can't tell you um that there's a pending house bill or that they're you know pending bills in any states right now that i'm aware of but um but yeah i i don't think that i don't think it's it's reasonable to make an argument that no we see this regulation going away or reducing i mean i think it's only trending in one direction yeah absolutely that's fun well guys again i'm gonna uh post if you have any questions or concerns you want to follow up um feel free to fill out the form that we're posting to the chat and also you know feel free to ask a question there if there's something specific you want to learn um you know this will go back to christine kyle um and i think it's at the time i talked to you i think they will clarify for everyone this is a space that it's not a guess no on licenses right i went to today hoping that they would say well the certain states were to absolutely no we're absolutely and i'm learning quickly unfortunately that it's not always that crystal clear and why um and i think that was well presented today i appreciate you guys coming in yeah let's go thank you thanks for having us yeah absolutely so so uh as we all say um we do this every week we do a webinar a week in our facebook group uh feel free to tune into it we'll be posting on youtube and our facebook group as well as our website a lot of stuff um always tune in ask questions there's never a stupid question but i appreciate everyone jumping in today and uh from here we're gonna disconnect from everybody and hope everyone has an awesome weekend and uh enjoy thanks so much everybody thank you.