SAFE ACTS for underwater homes?

When a homeowner owes more money in mortgage payments than the current market value of their house is worth, they have an underwater mortgage. It’s one of the most disconcerting problems in the mortgage industry, and one of the most troubling types of debt anyone can ever struggle with.

What Causes an Underwater Mortgage?

When a person pays off their home through a mortgage, the house builds positive equity, or value. In an underwater mortgage, a house develops what’s called “negative equity” — a home is worth less than the balance owed on it. (A similar problem, upside down loans, are common in the auto industry.) There are many ways a mortgage can turn sour:

Refinancing. When a home already contains equity, it’s common for borrowers to refinance their mortgages while borrowing against the home’s value. However, if this happens when a home’s equity is small, a homeowner can quickly find themselves underwater on their mortgage.

Financial changes. Loss of a job or other financial strains can lead adversely affect one’s mortgage. Many homeowners may actually take out second or third mortgages on their homes to buy time temporarily, but when they fall behind on their payments, their mortgages are submerged.

Market values. A change in property values or market conditions, like those in the housing crisis four years ago, can place a burden on a homeowner’s mortgage. In some circumstances, a homeowner in financial trouble may be unable to sell their property, but unable to keep up with their monthly payments, they develop an underwater mortgage

To help out underwater homeowners, the Bush Administration passed the Mortgage Forgiveness Debt Relief Act in 2007 that says that if the bank suffers a loss on the house, in certain cases, the owner would be exempt from the tax. This law expired at the end of 2010 but was extended through the end of 2012 by the Obama Administration. Now the bill has been extended again through the end of 2013.

This law applies if: The bank takes a loss on the house as a result of a foreclosure, deed in lieu of foreclosure, short sale, loan modification or principle reduction. The event is completed by the end of 2013. That means the foreclosure, short sale etc. has to be finalized by the end of the year.
The property is the primary residence. The money forgiven was used to buy, build or substantially improve the property. The forgiven amount is less than $2 Million.

I was wanting to know how an investor can help someone through the safe acts? I have someone who wants to co-wholesale who says they do ACTS, so I am assuming Safe Acts???

ask them what they mean. You can't be on two different pages.

SAFE Act Final Rule: Seller Financing and REOs

The SAFE Act requires licensing of loan originators under state laws that meet minimum federal requirements. HUD has established minimum standards in its final rule published in the Federal Register on June 30, 2011. HUD's overall responsibility for interpretation, implementation, and compliance transfers to the Consumer Financial Protection Bureau (CFPB) on July 21, 2011.

Who must be licensed as a loan originator?

The SAFE Act requires licensing of individuals who engage in the business of a loan originator. To trigger the licensing requirements under the SAFE Act, the financing must be primarily for personal, family, or household use. An individual engages in the business of a loan originator if the individual, in a commercial context and habitually or repeatedly, takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan for compensation or gain.