Contract for Deed and Dodd Frank

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Contract for Deed and Dodd Frank

Wagner Soares
Member since 2024 · 2 posts · 1 vote

I am negotiating to buy a CFD in SC. Property is land with mobile home. The seller however does not have any documentation to show he made any reasonable efforts to evaluate the borrower ability to pay the loan. What can be done to make this CFD Dodd Frank compliant?

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y

    @Wagner Soares

    Was it issued before Dodd frank?

    I would be more concerned with where the title to mobile home was - was it retire and put on the property or is it still personal property

    There is nothing you can do to make it compliant, if the loan has been current for 12 months then you have ability to repay because they have consistent pay history

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  • Wagner Soares
    Member since 2019 · 4 posts · 0 votes
    2y

     @Chris Seveney

    Thank you for your response.

    It was issued after Dodd Frank in Feb 2014. The sales contract does include the mobile home and the land.

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  • Don McAlpine
    Member since 2023 · 51 posts · 48 votes
    2y

    You should negotiate a bigger discount.  Without all of the paperwork the note is less valuable than one that is fully-compliant.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y
    Quote from @Wagner Soares:

     @Chris Seveney

    Thank you for your response.

    It was issued after Dodd Frank in Feb 2014. The sales contract does include the mobile home and the land.


     as noted, if they have been paying for 10 years that shows their ability to repay.

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  • Alex Booth
    Member since 2018 · 38 posts · 15 votes
    2y

    The borrower has already shown the ability to repay and since you did not originate the loan then you are not on the hook for liability. However, you can use this lack of documentation as a negotiating point against the current note holder. What % UPB and % LTV are you buying at?

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