All Forum Posts by: Ken Rishel

 Several things have changed over the past couple of years:

• Federal laws and rule now require you to screen for the Red Flag Rule, the Patriot Act, OFAC, and AML. Whoever you engage for your credit reports can do this far more cheaply than you could any other way, but, you must ask for these services, and pay extra for them;
• Fair Housing is now a very big issue. The disparate impact decisions last year on credit and criminal history require a very formal written system and matrix to justify using either as a method of screening.

Times change, and we must all change with them.

 You don't want to do lease credits, et al in Illinois. That issue has been specifically addressed in Illinois and there is no way to do them legally. Since you are in Illinois, if I were you, I would talk to Performance Equity Partners as an outside lender. Triad Financial Services (Gene Dobek) could also help you out if your borrowers have good credit as could Oxford Bank & Trust in Oak Brook (Al Cole)

A list of all outside lenders making chattel loans on manufactured homes in Illinois can be found the Illinois Manufactured Housing Association website.

 Robert - With all due respect, you need to get some expert advice instead of trying to get it here. It takes time to answer these questions the way they should be answered, and experts expect to get paid to do more than they offer.

With that said, the Final Rule of the SAFE Act issued by HUD several years ago covered this. If you want to sell a home you own, and have lived in for more than a year, (definition of a personal residence) and want to seller finance the sale of that home, you neither need an MLO or a lending license. If you inherit up to three homes, you can do the same for them. (You are only allowed three homes to be financed at the same time under this exemption.)

However, if you own a home that was not inherited, or a personal residence, you must be properly licensed to finance the sale of the home yourself. In addition, in any circumstance under which you lend, licensed or otherwise, you are responsible for complying with 20+ other federal laws. A failure to do so could mean fines, penalties, lawsuits, and, in extreme circumstances, prison.

 The address you listed was John Ferdo's website. I don't believe John is telling people that they can make loans anywhere without a license. There are some workaround solutions, some of which work in some states, and not in others, but even the workaround solutions are complex and still require rigorous attention to state and federal compliance issues.

 To the best of my knowledge, there are no books or websites for this. The reason most people shy away from it is that it takes a great deal of knowledge and expertise they lack to develop, not to mention access to a great deal of long-term capital.

Unless you were doing the actual blue collar work, you could not make such a project work as it is too small to afford to hire such work done.

While price is a factor, I would be more concerned about using an agency that specializes in community insurance. There are many things a general agent does not know about our business that could really hurt you in the long run.

• Patrick Ford Stanford & Associates Hindsdale, Illinois (National)
• Dick King Insurance Omaha, Nebraska (Nebraska, Kansas, Missouri, Illinois)
• Kurt Kelly (Mobile Insurance) The Woodlands, Texas (Southeast and South West)
• Barrett & Associates Bloomfield Hills MI (mostly Michigan)

 Between them they insure 80% of the communities.

 This is a prime example of dangerous crap ending up on the internet posted by people who have no idea what they do not know. It is worse if some self-styled guru is trying to get rich preaching things that are way out of date or not even close to the truth.

 It takes most people more than a year to obtain an Illinois Mortgage Lender's License.

 You are missing a lot. Unfortunately, I do not have the time to address all of the issues you raised. It is too complicated. We spend a very long day on this topic through state associations and at other events before many people even begin to actually understand. Even then we do not point people to laws. I will tell you, with no disrespect intended, that most attorneys have trouble understanding all of the complications. We teach people what is and what they need to do in response to the laws. Anyone who wants more, we refer to one of five regulatory laws firms who specialize in these areas, none of whom charges less than $750.00 per hour to answer questions like yours.

 Matt - There are specific federal laws that prohibit steering that relate to financing principal dwellings. You may NOT suggest a financing source to a prospective buyer, you may NOT quote interest rates or payments to prospective borrowers. MHI the national trade association has written about this as have many state trade associations. Rishel Consulting Group has held one day training programs for sales personnel all over the country for going on five years since the law has changed under the aegis of state trade associations and several years ago the day before the Louisville Show. 

While the internet and forums like this are valuable, they are limited in what can be learned, and sometimes even just plain wrong. Your comment making strong statements telling people they can steer is an example of how one person's lack of knowledge can lead another person into trouble. People ask me questions all the time outside of my area of expertise and the best and most simple answer is, "I don't know". If I know someone who I believe does know, I will make a recommendation that the party asking contact the person or company that does have the answer to the question, like a number of us do here on a regular basis.

The suggestion of two LLCs is a good answer, although I normally suggest three entities, one that retails, one that operates/owns the dirt, and one that finances. There is a long answer as to why three, that involves the SAFE Act, liability and tax benefits, but it is too long to go into on this forum.

The greater danger than not knowing, is not knowing you don't know and still being sure you're right