All Forum Posts by: Terry Lewis

If you have a title policy from the previous 2 closings then the Title company has the liability I would think. This is what title insurance is for and if they missed it it's on them. You may need to hire an attorney to get them to pay though.

Terry Lewis

The best Real Estate Atty I know. And a personal friend.

Terry Lewis

"Robert J. Eckley" <[email protected]>

Another alternative is to invest in a different form of passive income. Be the bank and buy notes or create them with seller financing. There is a reason why the tallest buildings in every major city have a bank name on them. 

Terry Lewis

You could contact Jim Eckley. [email protected]

We also have a 1:20 minute video on our web site with Mr. Eckley talking about Seller Financing. I would start there. Your attorney is correct that it will cost $ to create the forms. However you need to make sure the money you spend is going to get you where you need to be.

Terry

Bill,

In California there are two types of MLO licenses. The MLO's working for the banksters are able to pass a 10-20 question test and become an MLO for purposes of taking a loan application at a bank. And you are right they are order takers and not underwriters. However a broker or agent in California that wants to become a MLO needs 20 hours of continuing education and pass the federal and state test. I don't recall but it is a much more rigorous process. And a bank MLO cannot be a broker qualified MLO.

Terry

Hi all,

WOW, I asked for a simple response to how there can be up to 50 different state regulations on seller financing exemptions. I feel this was a great exercise in the confusion and massive problems of government regulation and over step of free markets.

I am well aware that a MLO properly trained and aware of the individual states regulations can be the safety net for a seller financed transaction under the DFA. This law is complex and created to cause confusion, doubt and fear about a buyers and sellers ability to enter into a real estate seller finance transaction. 

Bill you are very well versed and articulate in the DFA. The question is what are the answers and solutions that will move us back into a free market. Under this massive regulation we have the creation of criminals and possible rescission of notes if guidelines are not followed properly. What are the answers and solutions that will move us back into a free market. Until this law DFA and the SAFE Act a buyer and seller could pretty much make their own deal with the help of whomever they chose for advice. This could be a broker, attorney, trusted family member,

Seller financing did not bring about the real estate bubble. It was the product of bad loan products being created an sold to an unsuspecting securitized market by the banks and wall street. Then bailed out by you and me as tax payers.

Bill and Marie Whatever your opinion is of the previous employment of a RMLO licensing is the law and the law has made this designation a requirement of seller finance creation with different state exemptions. As a MLO I see that it can be a business model and help people navigate this nightmare. I would like to be a problem solver in the space. The bad guys are always around and will not stay in business in the long run. 

And, RMLOs are not really trained in predatory dealing so much, they are not attorneys nor do they look to fairness of the transaction or the likelihood of any borrower meeting future obligations.....pretty much the moratorium on balloon notes. RMLOs are not trained to go there.

A RMLO is the beginner level of mortgage loan financing, they meet the public, explain a loan product, sell the product and qualify an applicant to proceed to underwriting. 3 months ago, they could have worked at Wal Mart. :) 

I would like to have the conversation address problem solving. How can seller financing survive under the DFA? Or did the banking lobby succeed in such confusion in the space to scare sellers, brokers and lenders out of it?

Respectfully submitted

Terry Lewis

I am an MLO in California. The Exemptions in California follow the Federal law. I am doing a survey. What are the laws in each of the other states with respect to exemptions and seller financing?

Thanks in advance for your responses.

Terry Lewis

SELLERS PROCESS FOR DETERMINING EXEMPTIONS

INVESTOR IS THE BUYER WITH THE SELLER CARRYING THE LOAN

Seller must determine if the buyer is an investor or “consumer” defined in the DFA. “If buyer is an investor the transaction is exempt.”

1 TRANSACTION PER 12 MONTHS

a) Seller must determine if the buyer is an investor or “consumer” defined in the DFA

b) Seller is a natural person, "not a Corporation, LLC, partnership, trust, estate, etc."

c) The seller did not construct the property

d) The financing has a fixed rate or does not adjust for the first 5 years, a balloon is allowed

e) No negative amortization

3 TRANSACTIONS PER 12 MONTHS

a) Seller must determine if the buyer is an investor or “consumer” defined in the DFA

b) Seller is a natural person, "or" a Corporation, LLC, partnership, trust, estate, etc."

c) The seller did not construct the property

d) The financing has a fixed rate or does not adjust for the first 5 years, a balloon is not allowed

e) The borrower has a reasonable ability to repay the loanThe loan is fully amortized (no balloon)

ALL OTHER SCENARIOS REQUIRE A MORTGAGE LOAN ORIGINATORS LICENSE AND ALL REQUIRED TILA, HOEPA, RESPA, AND HUD, COMPLIANCE UNDER THE DFA.

Violations of the Acts all under oversight of the CFPB are subject to Federal and State fines, and rescission of the sale,

Hi Lori,

We do these deals as a MLO in Ca and Washington and can be licensed in 40 states. If you are an investor buyer you are absolutely and completely exempt from Dodd Frank. If you are a consumer buyer (going to live in the home) then Dodd Frank applies.

Terry

Hi Josh,

I would put a complete package together with subdivision costs, utilities, Manufactured home costs Etc. and shop it in your area. The people with the most interest will live in your community.

Terry

@bill g and @brian gibbons

You are both right on, each state will have it's own advertising regulations with regard to marketing for brokers and lending. California is very strict. The DFA sets minimum federal requirements and they are under the jurisdiction of the CFPB. I like to refer to the DFA as the Obama Care or Home Land Security of Consumer Finance. It is unavoidable and everyone in America must comply.