Dodd Frank - CFPB - Sign a Petition to Allow Seller Financing
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
There is a petition available for Real Estate Investors to say that Seller Financing needs to be exempt from Dodd Frank.
Read the petition.
http://savesellerfinancing.org/cfpb-action-letter/
"We are asking the Consumer Financial Protection Bureau to remove installment sales which include a dwelling, known as seller financing, from the definition of Loan Originator in Regulation Z of TILA which was amended by the Dodd-Frank Act."
To sign it, go
Done! Seller financing opens up so many creative doors for acquisitions. I'm on board!
Thx @Mehran K.
Pass the word and help creative finance be alive and well for the home owner to seller finance!
Paste this link
http://www.biggerpockets.com/forums/61/topics/1516...
Best Wishes,
Brian
Done
Not in your wildest dreams....... LOL.
I have never seen any Act that specifically mentioned any individual scam transaction as the Dodd-Frank did in describing "Lonnie Deals"! That tells me they had very specific concerns, and, judging by the number of crooks and scams as well as failed transactions that will never happen, just exempting seller financing is a fantasy. You'll have better luck of your state leaving the Union.
Ten million folks could sign that and I'd guarantee it will go straight to the trash without action other than a form thank you letter. It would take an act of Congress and you know how that is working.
When you deal with government at any level, recognize they had a reason they did something, might not be a good reason, but a reason. Identify the issue. Don't complain unless you can give a viable alternative as a solution that better addresses the concerns.
Seller financing on the consumer side is regulated now and it always will be, who regulates it and under what guidelines may be up for discussion. Asking a civilized society to just do away with rules, regulations and laws is rather delusional. :)
Thanks @Bill Gulley
Your objection is noted.
Now anyone else?
This was started by www.PaperSource.com
W.J. Mencarow
Brian, not an object as much as a reality check. I'd love to see the issues approached differently, I don't endorse the wild west as I spent too many hours of my life fixing screw ups in seller financing, admittedly, more unintentional screw ups than intentional I'd say.
RMLOs have zero training in seller financed origination, yet you must go see one, now that just isn't logical! Ballsy new RMLOs think they know, but don't have a clue as I can tell.
Plenty of aspects and room for change, but throwing out the baby with the bathwater isn't an acceptable solution. I doubt endorsement of one organization by another means an endorsement for every idea or position the endorsed organization comes up with in the future. :)
@Bill Gulley I consider you a friend, and note your opinion and your strong objection.
It is my strong opinion that real estate investors should be able use seller financing strategies and have a procedure to have a seller sell their residence on installment sale or a lease with option, the real estate investor should be able to buy on terms and rent out, and not have this onerous penalty for sellers if they fail to satisfy the Dodd Frank 's Ability to Repay Rule.
A lender who violates the ability-to-repay rule may be subject to penalties including loss of down payment for a seller-financer, damages equal to all finance charges, and fees paid by the borrower and attorney’s fees. The borrower may also have a defense to any foreclosure action initiated by the lender. These penalties are quite severe, so it is important to make loans that comply with the rules or fall into an exemption.
All at BP: Read the petition, sign it or dont, I believe its important.
If Realtors' E and O Insurance will not cover seller financing, what does that say about the training of Realtors discussing seller financing with listing sellers?
If there was an exemption from the CFPB, I believe it would open up home sales.
Everyone would prosper.
No argument ole buddy, we have had discussions in the past about ability to pay. I don't agree with the approach taken, attempting to apply secondary market, a point in time qualification underwriting approach to an area that is better served underwriting future abilities, but doing that is much more difficult in a fair, prudent manner. The underlying issue is training. You can take an insurance sales and turn him into a mortgage originator in two weeks, you can't turn them into an underwriter in less than two years. Not to blab, but I recall an originator saying he had done thousands of loans in a call center, that's not underwriting experience, it's a financial product sales position. The thought was if you know the qualification rules, that's underwriting, not even close, that's a check list approach, not an analysis as to probability.
Most brokerages here avoid seller financing unless an attorney is in the mix. When I left the arena, the comfort zone was squeezed for brokers. Since the lion's share of the market is conventional, it's not really financially viable for Realtors to learn SF in detail. It's the lion's share of your business, I get that.
I'll bet dollars to doughnuts that there will be changes, that's a safe bet, as with anything in government, change will be slow in coming.
Nothing wrong letting the powers to be knowing the industry's displeasure, just don't hold your breath. You're an old Marine, adapt and then overcome! :)
This is exactly the sort of onerous regulation I think we should try to head off by not fighting more common-sensical regualtions, and by acting ethically.
This is why the practices of many "wholesalers" are dangerous to our industry as a whole. Why the practices of many landlords are dangerous. Hurt too many people, or just the wrong people, and some very heavy-handed regulation will absolutely result.
In the case of this restriction, you had people selling rotting 30 year old mobile homes with seller financing, that included a balloon payment. "So you can refinance when you get your credit straightened out." Yeah, right. Complete BS, you are never going to get a bank to finance a $5000 balloon on a $1000 trailer. And people knew it, and did it anyway. Thousands and thousands of times. Biggerpockets posters eagerly participated, and even now you still have people doing Lonnie deals, and comparing strategies for doing them on this board.
I don't care if it is speaking ill of the dead. Lonnie Scruggs was a scoundrel. A sleaze, frankly. Lonnie deals were abusive, and we are well rid of them.
So frankly, we deserved to have the regulatory boom lowered on us.
I've signed it! Seller financing opens more possibilities for investors and consumers. Big gov't surely isn't swift to react but saying something beats showing approval of the current standards by saying nothing.
Richard, within 90 days. I've had 2 calls about landlords telling young tenants to get out within 3 days after being less than 10 days late. That's 2 calls to the MO REC, 2 calls to brokers, and a gift or only $70 to the clerk of court to file suit on behalf of both tenants. These kids get threats on the phone and idiot PMs don't understand smart phones record messages.
I'd guess that at least 7 out of 10 in real estate are really sleeze balls, issue is, they have no clue about the industry, they see it as being all about them. Old dealers never put forth an effort to keep up, new ones think it's all about money, half of them play off the lower half.
There are people in RE that couldn't pour water out of a boot if the instructions were written upside down on the heel. Just give them the four things they really need to know to do a deal and make a million!
The top ten percent make 90 percent of the money, doing 90 percent of the business, the rest chase dreams like a kid chasing butterflies.
Seller financing; just give me the documents that need to be used and I can get people to sign them, seems to be the attitude.
Pretty much why I don't go into great detail publicly, it's like giving an Uzi to an 8 year old to play with. Too bad too, that 70% taint the industry to the extent that those who actually want to learn and try are held back. I try to help or at least be civil to everyone, you never know, but I do know most aren't cut out to make it in RE, usually it's an attitude issue, but I know some can't add 6 numbers with 6 digits and multiply the result by 12.
Then we have the hot shots who can wear a suit, have the gift of gab, are sociable and graduated high school. Selling used cars can make a good living without all the brain damage involved in RE, and that's pretty much risk free!
Thanks to them, we have Dodd Frank to live with.
It's time real investors clean up their own backyard. That includes those that take $199.95 telling anyone that can write a check that they can make it in this business, just sign up! Gotta understand that one bad apple spoils the bunch. There are a lot of bad apples.
I have had communications with folks at the CFPB, my name isn't going on some petition that is so absurd and out of touch with reality, plainly obvious as to those asking for such exemptions, they are most likely the ones who can't or won't comply, or lack the understanding of why this became an issue but don't care, they really aren't interested in the "public" as much as themselves. Regulators get that.
Quick insight to government as to how they think. During the Viet Nam war, all those long hairs (like me early on) who marched in protest had their picture taken and many were identified and filed away in case their face popped up later, we didn't have computers then, we do today. About the same thing, for those that want to demonstrate that don't get it, want to step up and complain that they are losing deals, then just carry those types of signs and get your picture taken. But, if you do get it, and want to solve the issue and actually make things better for investors and the public, I'd suggest a more sophisticated approach than crying about it.
Sign away! This isn't a war protest and it will have little bearing on the course of future actions, if it makes you feel better, sign away. If I were in the office, I might say, gee we got 312,862 folks sign this thing, that's 312,862 who don't get it, there seems to be more out there than we thought in favor of the old scam type stuff, maybe we should tighten up on compliance at a lower level, looks like we could be missing more than we thought. If I were a compliance guy, that's how I'd look at it. :)