Posted by David Butler on February 18, 2010 at 14:22:25:
Fellow CREI's,
Perhaps due to the efforts of those who have responded to the HUD request for comments on proposed rules, HUD has extended the period for comments from you, RE clubs, and investors regarding the Safe Mortgage Act (SAFE Mortgage Licensing ACT Rules).
The new deadline to speak up is Friday, March 5th.
A good thing; but there is still much work to do.
Here's the deal.HUD has proposed to eliminate ALL residential seller financing unless the seller lives in the home or becomes a licensed mortgage originator. The proposed HUD Rules interpreting the federal SAFE mortgage act can be viewed at www.regulations.gov
Such rules are onerous, and would likely chill the marketplace for seller-financing in one of its most important manifestations - the transaction of nonowner-occupied residential investment properties of 1-4 units - which is a significantly critical tool of many of the most successful and knowledgeable CREI's, and real estate exchangors. This is especially so where the seller is only using the techniques one or twice a year, and perhaps moreso in the instance of long-time investing veterans who are now in the process of winding down their affairs, and desirous of disposing of their real estate holdings to derive future income without management headaches, or for critical tax planning and/or estate planning purposes. And of course, when the process becomes more than a seller wants to deal with, investors at the beginning, or even in the middle of their investing careers, are then deprived of one of the most viable and flexible forms of critical capital necessary to continue their estate building objectives.
On Monday, Feb 22 at 7:00 pm CST, former SMU law professor and attorney Bryan Dunklin will be discussing the proposed HUD statutes in the Safe Mortgage Act, in a call hosted by long time premier note buyer Eddie Speed of Colonial Funding Group, LLC and the NoteSchool. Bryan is Colonial's go-to lawyer for seller financing "legalese." Known as a fellow who makes sense of the details, Bryan is going to share his perspective of the Safe Mortgage Act and what it means for seller financing.
You can register for the call here: http://noteschool.com/register/hudcall.php?Id=1578
In the meantime, if you have not done so... this effort needs all Realtors®, REIA members, CREI, Exchangors, private note investors, and note finders/brokers to contribute their articulate reasoning about why the proposed rules regarding seller-financing and loan-origination licensing related thereto is unsound legislation.
Three items:
1. Arm yourself with professional information; listen to attorney Bryan Dunklin's call on Monday night (see above).
2. Tell HUD how restrictions will affect you and your business. Click here to learn more about responding to HUD.
3. Get the word out - encourage others, particularly any business associates with related interests, to get in there and do their part as well.BTW... if you are a Realtor®, I believe it is worth mentioning that Realtor®/Exchangor Extraordinaire Roberta Standen of Note Servicing Center has raised questions regarding a related "Pandora's Box" the proposed rules may very well open up for your side of the business with regard to seller-financed income-property (1-4 units) transactions:
"David, I appreciate you sending your comments on CREONLINE. I sent out as a special blast to our database of
Realtors, Exchangors, and note investors - giving appropriate credit to CREOnline, and to you, of course. I am
scratching my head on how the SAFE ACT proposed rules, if passed in its present form, will affect Real Estate
Brokers who promote, assist, write offers etc., for buyers requiring/requesting seller-carry back financing on properties
intended for rental investment. It seems possible this could also open a real can of worms regarding the brokers
responsibilities in representing sellers who want to participate in the financing?! Would they be required to follow the
rules and regs of mortgage brokers particularly as it relates to loan disclosure RESPA, TILA etc. In CA, it may not
impact RE Licensees can also arrange loans, but how about the states where a mortgage broker is licensed under
another state agency besides the DRE? Thinking is becoming dangerous these days. Would love to hear from you."As the old saying goes... He who sits on his rights, loses them.
Your support in helping to amend the proposed rules is greatly appreciated. For additional information and details on how to make your comments known to HUD, please refer to the discussion at:
CALL TO ACTION Redux - KILL (HUD) BILL Vol. 2
http://www.creonline.com/wwwboard/messages/90142.html (Real Estate Discussion Forum)or... http://www.creonline.com/cashflow/wwwboard3/messages/26742.html (Cash Flow Forum)
Make 2010 a year to Win... And one of Many Happy Returns!
David P. Butler
Nascent Equity &
Hotspur Investment Group
- David... acw 09:30:16 02/21/10 (1)
- Re: David... David Butler 14:25:10 02/21/10 (0)