Call your Gov Rep: have them sign onto fix Dodd Frank for seller financing

11 Replies

Just passing this on.   If it's possible to ligthen up on Dodd Frank regs re investor financed sales, I'm all for it.

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We need help and we need it fast. Without relief many of us will be forced to exit the business in a short time.

TAKE ACTION NOW...

- Call YOUR representative and tell them to co-sponsor H.R.5667 (go here to find your rep.)
- Tell your friends, family, and business partners to do the same
- Join the Seller Finance Coalition and fight to keep seller financing alive...
Go Here to Join the Coalition

DC politicians are working day and night to put an end to this highly profitable exit strategy and run us out of business. With your help, we won't let that happen.



P.S. Bill H.R.5667 is aimed at addressing the unnecessary and overly burdensome federal regulations that threaten the survival of the seller finance industry. We need your help to pass this bill into law. Join the Seller Finance Coalition and let's make this happen! 

I'm all for the repeal of Dodd Frank and even parsing out bad provisions of it. All that said it's not going to happen for several reasons. Time would be better spent learning how to work with seller financing within the DFA as we have done and create some really good compliant notes that are salable to mom and pop Ira's for interest income that they can use to retire off of. Seller financing is an untapped resource that no one is using to fire the banks and take back our neighborhoods with local neighbors helping neighbors.

Terry Lewis

@Curt Smith

  Totally disagree with you... SEller financed notes that are not regulated are HIGHLY risky to investor buying them... its just sub prime all over again. If you can't qualify for a home don't buy the dog gone thing .. rent... that's why buying rentals is a great long term stratigy in credit challenged areas of the country..

Hi Jay, We hold our notes.  And agree with rentals.  Two different issues, the creation of seller financed notes, and attempting to sell them.   I agree with never buying seller financed notes!!!   Tnx Jay!

What we where forced to do when Atlanta got too expensive was to move to distant small towns buy ugly and cheap. Fix nice and offer rent to own, seller will finance.  Just isn't possible to rent cheap houses in GA in small towns.  The rumors are true.  But rent to own skims off the best applicants.  We want our renters to pay off and be free and clear owners.  Would make us very happy.

The risks to the lender of seller financing are enormous. If the borrower fails to make a payment and claims they could not afford the home there will be no shortage of lawyers who will be happy to help them take ownership from you. The fact that they miss a payment or two may be all the proof they need that the lender (seller) failed to qualify the borrower properly. Not only may the borrower take possession of the home, the lender may be required to refund all of the payments the borrower made. Or you can simply try to fight the legal battle. Who knows, you may win. (Not really, the lawyers are the only ones who will win.) Making seller financed loans to owner occupants is no longer worth the risk. It is why almost all hard money lenders have ceased the practice. 

@Jeff Rabinowitz

Which is why we need to get DF fixed by calling our reps.   The reps need a wake up call anyway.  You can talk about the 1000's of other broke issues while you lobby for HR 5667.  :)

Originally posted by @Curt Smith :

@Jeff Rabinowitz

Which is why we need to get DF fixed by calling our reps.   The reps need a wake up call anyway.  You can talk about the 1000's of other broke issues while you lobby for HR 5667.  :)

 I watched Williams' video. He says DF is a disaster, that he believes in competition, that he believes in us and the he believes in America. I must say that was quite inspirational. Not a word about the bill. What a waste of time.

I agree that people that want change in Dodd Frank should state their case with reason and facts.

Down payments for Home ownership in Canada is 10 percent or more, UK, New Zealand and Australia are all 10 per cent or more.

I wish there were some kind of national underwriting supervised by the government the someone's ability to repay could be quantified, there are 800 pages and Dodd Frank just for the ability to repay rules.

And seller financing could be done by homeowners without these Draconian penalties  of 

-36 months of payments plus 

-down payment plus 

lawyers fees plus 

-court costs

which is intimidating any home seller from looking up so if financing, including rrap estate agents.

Seller carry backs with reasonable underwriting and no Draconian penalties should be allowed as an exception to Dodd Frank.

Originally posted by @Jeff Rabinowitz :
Originally posted by @Curt Smith:

@Jeff Rabinowitz

Which is why we need to get DF fixed by calling our reps.   The reps need a wake up call anyway.  You can talk about the 1000's of other broke issues while you lobby for HR 5667.  :)

 I watched Williams' video. He says DF is a disaster, that he believes in competition, that he believes in us and the he believes in America. I must say that was quite inspirational. Not a word about the bill. What a waste of time.

Here is the language from the summary of the bill:

Seller Finance Regulation Reduction Act - Amends the S.A.F.E. Mortgage Licensing Act of 2008 to exempt from certain licensing and registration requirements any person (other than a depository institution) who: (1) has less than $25 million in assets; and (2) only originates residential mortgage loans with respect to property owed by the person, and in an amount of $150,000 or less.

This is cut and paste from congress.gov website but the word "owed" above should probably be "owned"

I think it has already died in a previous congress.

Seems investors are not the only parties that consider Dodd-Frank burdensome:

http://www.nationalmortgagenews.com/news/complianc...

Lots of folks don't like Dodd-Frank, parts of it I don't care for either, but it's the law and I understand the purpose.

As some think, it's to just prevent another balloon popping, not really so much as clamping down on predatory practices.

When these groups form, IMO, they go at it from the wrong angle, harping on how they are effected. 

Frankly, investors who did seller financing is the reason they have been included, lend, cheat and repeat, is the historical track record, crying about it asking to put your hands back in the cookie jar again is rather absurd. Saying "we didn't cause the crisis" isn't the issue at all, due to the melt down in mortgages, it's the big violators getting handcuffed, along the way they are simply saying.....oh, yes, this bunch, this is the best opportunity to curb the crap investors have been pulling too!

I have absolutely no sympathy for scamming seller financed investors and I use the word "investors" very loosely. 

Can the rules be more flexible? Yes, Are some of the rules just over the top? Yes, should every borrower go through an underwriting process showing the ability to pay? Absolutely!

Should investors be free to do just anything they can dream up? Absolutely not!

The problem is is that those in office and in regulatory positions have probably never done a seller financed loan in their life and all they know is the securitized mortgage market, seller financed transactions are not like, nor can the be like a secondary market loan, but they can have ability to pay rules, credit counselors, properties repaired and in time most buyers can meet secondary requirements. 

I'm sure I've had more seller financed transactions across my desk than anyone on BP, my deals closed with conventional financing at the end or a profitable payoff for the borrower between 92 and 94%, that is a better ration than bank or secondary market failed loans! 

The question is also, how do investors learn, RMLO requirements are laughable as testing for an RMLO doesn't even touch on seller financing. 

What they want to do is turn a sow's ear into a silk purse, if they would accept the fact that a sow's hair can just make a good bag, until one can afford a silk purse we'd be better off. 

As I see it, investors made their own bed, now they have to sleep in it. The good ones suffer because of the bad ones. That's they way regulations work, they are made for a reason and bitching about why it isn't fair will fall on deaf ears, just as it should. 

Now, if you can show why a specific exemption that requires a process to ensure fairness is good for the buyers, then you'll have a chance. But crying because you can't make money doing predatory things just won't fly, IMO. 

Rant for the day! :)        

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