All Forum Posts by: Mike A.

@Drew L.

Can you please give us a quick summary of what the astro flipping strategy is?

My impression is that you try to work with all the wholesalers in town to find buyers for their properties, and add a small markup to each sale.  Is that accurate?

Thanks @Bill Walston!  I just downloaded that handbook.  Now they just need to come out with the Lender's Guide to Seller Financed Mortgages. :)

Thanks for the response Cameron.  I am not exempt from Dodd Frank because I do more than 3 a year.  That is why I use a licensed originator.  But even if I was exempt, if I read it correctly transactions that fall within the exemptions still have the rule of no more than 6% increase on the interest rate in an adjustable rate mortgage.  So that's why I'm wanting to find out if a step-rate mortgage is supposed to include that limitation as well.

I don't think it's safe to say that no one is going around saying you can't do x.  There are always predatory ambulance chasing attorneys out there trying to trip you up.  And the potential penalties are quite substantial if you are not following the rules.

I sold a home on a seller carry note.  I used a licensed MLO to process the application and provide the disclosures.  The terms of the loan were 10 year fixed interest rate, and then increasing 1% per year.  Starting at 7% for the first 10 years and then going up 1% per year after that up to a max of 18%.

I later read that Dodd Frank prohibits the interest rate in an ARM from increasing more than 6%. I discussed it with the loan officer but he feels that since the loan we did was a fixed rate loan, even though it's a step-rate, it's not an adjustable rate so it doesn't have to meet the ARM guidelines.

We might just be guessing at this point but I don't want to be the case law to determine the issue.... does anyone have any thoughts on whether this loan is following the Dodd Frank rules?