Private Money Investing - Regulatory Oversight

Regulatory Oversight

Fractional investments fall under the jurisdiction of the Department of Real Estate. Regulations require, among other things, that a broker be licensed as a real estate broker by the Department.

Mortgage Funds are regulated by the Department of Corporations. They are established only after the Department reviews a Plan submitted by the managers of the proposed fund, which sets out, in detail, the specifics of the fund’s operations, such as LTVs. Funds are limited as to the maximum number of investors they may take into themselves, the minimum initial amount an investor may invest, and the maximum total dollar amount that will be accepted into the fund.

Funds are required to submit annual audited financial statements to the Department and to investors. Funds are also subject to operation and investor regulation from the Department of Real Estate and the Department of Industrial Relations.