Promissory Note

3 Replies

A buyer wants to offer the seller a promissory note. They want to use their cash on repairs, then refi later. Does a promissory note fall under Dodd - Frank? This will be o/o.

Yes, owner occupied falls under D/F, use a mortgage originator and continue to go on! Not that big of a deal. IMO :)

Is the seller going to do more than one of these in any given 12 month period?

Is the term of the note going to be more than 11 months and 29 days?

If the answer to either of those is no, DF doesn't apply.

True, depends on who the seller is, check you state for exemptions as well as they can be more restrictive. Any time you have an OO financing deal, begin with the presumption of compliance, then look for applicable exemptions and hope for the exemption being applied.

Just because you may have an exemption won't be an excuse to go wild in any OO deal as the base line of fairness may have been moved in your local area, not that every detail must be complied with, but staying close will help if things go south. Your attorney will know pretty much the way the winds are blowing as to opinions of the guy in the black robe. :)

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