Licensing Requirements For Out-Of-State Corporation Intending To Originate Direct Loans For Acquisition Of Manufactured Home - Q3 1999

By the Division of Banks

Extending closed-end direct loans to consumers for purchasing or refinancing manufactured homes and securing the loan with collateral other than real estate does not require a license under Mass. Gen. Laws chapter 255E. Said chapter 255E requires that any person or entity originating five or more residential mortgage loans in the Commonwealth in a consecutive twelve month period obtain a mortgage lender's license from the Division. The request for opinion clearly states that the proposed loan activity would not be secured by real estate and, as such, would not meet the definition of a mortgage loan as set forth in section 1 of said chapter 255E.

A further statute that may be applicable to manufactured home loans in Massachusetts is Mass. Gen. Laws chapter 140, section 96. Section 96 requires that any person or entity making loans of $6,000.00 or less, secured or unsecured, and charging interest at a rate exceeding 12% per annum obtain a license from the Division. In the event that none of the corporation's manufactured/mobile home loans are for amounts of $6,000.00 or less, no license under said section 96 would be required. In the event such loan was for an amount of $6,000.00 or less then a small loan license would be required and the loan would be subject to the small loan rate order which sets a maximum interest rate of 23% plus a $20.00 administration fee.