Mortgage business

Nobody got any answers????

Come on Guys (& Gals), here is a sane & sensible question being posted - here & on the Business forum. No-one have any views??

I am sure that if he asked about setting up a bar there would be LOTS of replies so why nothing for a USEFUL service??? Come on TW with all your contacts you should have an opinion! Freddie, you must know something about this too. - Grahame.

jazzcom said:

I am considering going into the mortgage business in the DR. From a legal standpoint what must I get done first before I start up this business?

Thanks,
Scott
jazzcom@usa.net

Click to expand...

without a very powerfull
dominican partner there is no way you will succeed in this businesss

you are a foreigner giving loans
to locals.
when you get collection problems
you need power.

and my guess that partner is going to cost you too much.

and after each election you might need a new protector as the old one will have lost his connections.

If the intention is to stay within legal boundaries, you should form a bank or a finance company since only regulated banking institutions can legally charge the high interest rates standard in the Dominican market. Individuals and non-banking companies are still bound by old Law No. 312 of 1919, enacted by the American occupation forces (!), which defines as usury any loan stipulating more than 1% per month interest (12% p.a.)

We all know that people who are not banks negotiate mortgages everyday at rates of up to 10% a month. These mortgage contracts, however, usually hide the true interest rates converting interest into principal or are disguised as fake sales contract, etc. In any case, a good attorney has the means for unraveling the operation as usury.

You need authorization from the banking authorities. Of course, mortgages are secured by real estate as in the U.S. Foreclosures are not as easy as in the States but they can be done OK.

Fabio J. Guzman said:

You need authorization from the banking authorities. Of course, mortgages are secured by real estate as in the U.S. Foreclosures are not as easy as in the States but they can be done OK.

Click to expand...

when you say it can be done can you guess at an average cost.
this is going to be the major cost in this gentlemans business.

and how costly will it be to forclose on a connected
person.

My guess is by now he has spend his profit for the year and next.

Scott,
If you don't get the answer to tese questions before you get here, I will introduce you to someone who will. I won't try to get the answers myself as I would most likely miss some salient points of the procedure - it is better you both talk direct.

Keep taking the valium - you see how hard it can be to get lucid answers to even direct questions!! - Grahame.

Foreclosures are done every day in the D.R. Otherwise all Dominican banks would be bankrupt by now while actually they seem to be doing quite well. The foreclosure/loan ratio seems to be low (please don?t ask me what it is, it?s just a personal impression from representing The Bank of Nova Scotia in the Northeastern D.R. - San Francisco de Macor?s, Nagua, Saman?). If the debtor has deep pockets and retains a good attorney, then here as everywhere else delays will occur.

When I commented that foreclosures were not as easy as in the U.S. I referred to the procedure itself which is complicated and outdated and is presently subject to review. In any case, most foreclosures are over in about 120 days.

Cost? It depends on the value of the property especially if there are no bidders at the public auction and the bank becomes the owner. Transfer taxes (approx. 5% of appraised value) would have to be paid + legal fees (approx. 1%).

Cost of the authorization for the financial institution and for incorporation? Again, it depends on the capital of the bank and other factors. Count on a least $10,000 US as legal fees and expenses.