Who is Dodd Frank?

Question

Hello dear BPers,

Sorry for the lack of knowledge, but can someone talk two lines about who Dodd Frank was, and what has changed in the real estate market since then, specially concerning seller financing legislation.

Thanks,

Rodrigo Marquez

Linda Weygant · Answer

I went to a free guru seminar where the speaker was invoking Dodd Frank by saying that it regulated what assets a bank could hold.

Specifically, he said that Dodd Frank prevented a bank from owning tax liens (and other property, but this was a tax lien specific seminar) that were about to convert to lapse.  In other words, banks are permitted to own a tax lien where there is still some hope that the homeowner will redeem, but as soon as that looks unlikely, the banks are supposed to dump the liens because they aren't supposed to own more than a certain percentage of non-performing assets.

Not having read Dodd Frank in detail, I couldn't really call BS on it, but this is not my understanding of the overall content of Dodd Frank.  I had always thought that it was specifically about how banks and people lend out funds and that's it.

Anybody out there that can shed light on this?

Brian Gibbons · Answer

See Dodd Frank Summary

https://www.biggerpockets.com/blogs/3/blog_posts/3...

@Rodrigo Marquez

Only when financing owner occupants.

Rodrigo Marquez · Answer

Thanks Doug an Ned. I will do some deeper research.

Doug McLeod · Answer

Chris Dodd and Barney Frank - retired senators from CT and MA I think who sponsored a bill after the financial crash in 2008 which implements a number of regulations that impact lenders.  Basically - if you are doing seller financing you want to use a loan originator who is properly credentialed to put the loan together rather than doing it yourself.  Otherwise you open yourself up to potential regulatory violations if you do more than a couple of loans.

Do a BP search on Dodd-Frank or check Google or Wiki.

Ned Carey · Answer

Dodd and Frank were two congressmen who authored a bill to regulate financing.  It is generally known as the Dodd Frank bill.