The End of Seller Financing

http://papersourceonline.com/2786/red-alert-seller-mortgages-may-be-outl...

Sounds like the banks will stop anyone from taking business from them, big brother wants his share in that too! We have to speak up, most people will never know this until it is too late, just like everything else...if on a land contract or lease option, why would it matter to the bank anyways, they still get their money.

I remember seeing somewhere where this regulation is meant to only apply to creditors who originate loans/mortgages as a function of their business; such as banks, finance companies, credit unions, etc. It does not apply to owners of real estate providing seller financing to be able to sell their house. And I think it exempts anyone making 3 loans or less per year. The Federal Reserve produces regulations to help in the efficiency of the overall marketplace; they are not focusing on the small guy here.

Everywhere...Federal law...Dodd-Frank Act

Bill, if you'll notice, they changed the verbage from "mortgage loan originator" to "creditor". Mom and Pop may not be mortgage loan originators, but they fit the broad definition of creditor. Perhaps you are thinking of the Safe Act.

This is not good.....whats next??

DON'T ASK! The whole loan industry is a shambles and the only way to get money from a bank ... is if you don't need it.

I have credit in the high 700s low 800s, plenty of monthly income to get a loan and CAN NOT get a loan, . Good credit is worthless if you can't use it!!!

I understand your comments regarding verbiage; I just don't believe it will apply to us "little people" and the seller financing we use and/or create.

If it does, then we will have to find a work around as we always do for the stupid laws that have unintended consequences.

Bill, I don't regard it as a question of working around it as much as I do a question of why they endorse policies that cripple any recovery in the housing sector. They seem to be fighting us every step of the way. Irregardless, it won't hurt to make our opinions known rather than sit idly by and get the stinky end of the stick again. Everyone is always urging people to just take action. Well here is a time to act. You don't have to be afraid of talking on the phone, you don't have to worry about having no money or making a mistake and losing money or getting sued. It takes nothing to act and let your elected officials know your opinion. The other option is to sit idly by and suffer the potential consequences. It's our industry...do we want to protect it or have it shuttled away from us piece by piece?

it's because they have lost control of the government and try to control the little things that they think they understand. Just watch C-Span and you'll understand why the USA has so many problems.

Congress people have to make a choice everyday: Either fix a problem or make a new law to show their constituents that they are working. What do you think they choose??

I think they choose to do what will benefit the monied interests that fill their campaign coffers. They never fix anything.

TELESEMINAR ON THIS ISSUE w/ RIC THOM OF SECURITY ESCROW CORP. THIS TUESDAY, JULY 19…
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control the owner financing, how could they possibly prevent homeowner's from doing it???
I can see it with a home that is not fully paid for, but with a house with no mortgage??!! no way! They would have absolutely no business in that transaction.

Learning and progressing every day,

Valerie

This administration has it backwards. We don't need to stimulate consumption, we need to stimulate investment. The red tape they are proposing does nothing but hinder any kind of recovery in the housing sector. Banks are sitting on hoards of cash and not lending it out. With all the people who have lost houses or walked away from houses, now is a prime time to use subject to, wrap arounds, and lease options to get these people back into houses while they repair their credit. This economy will go nowhere until housing starts to recover, yet they continue to bind the hands of the very investors who will pull housing out of its slump. Don't expect the govt to do it, the private sector is always more efficient than the govt.

Here are some definitions pertaining to Reg Z:

Section 226.36 Prohibited acts or practices in connection with credit secured by a dwelling.

(a) Loan originator and mortgage broker defined.

States that the regulation applies to all persons who originate loans, including mortgage brokers and their employees, as well as mortgage loan officers employed by depository institutions and other lenders.

The rule does not apply to payments received by a creditor when selling the loan to a secondary market investor. When a mortgage brokerage firm originates a loan, it is not exempt under the final rule unless it is also a creditor that funds the loan from its own resources, such as its own line of credit.

(17) Creditor means:

(i) A person who regularly extends consumer credit(3) that is subject to a finance charge or is payable by written agreement in more than four installments (not including a down payment), and to whom the obligation is initially payable, either on the face of the note or contract, or by agreement when there is no note or contract.

(3) [Reserved]

(ii) For purposes of §§226.4(c)( (Discounts), 226.9(d) (Finance charge imposed at time of transaction), and 226.12(e) (Prompt notification of returns and crediting of refunds), a person that honors a credit card.

(iii) For purposes of subpart B, any card issuer that extends either open-end credit or credit that is not subject to a finance charge and is not payable by written agreement in more than four installments.

(iv) For purposes of subpart B (except for the credit and charge card disclosures contained in §§226.5a and 226.9(e) and (f), the finance charge disclosures contained in §226.6(a)(1) and (b)(3)(i) and §226.7(a)(4) through (7) and (b)(4) through (6) and the right of rescission set forth in §226.15) and subpart C, any card issuer that extends closed-end credit that is subject to a finance charge or is payable by written agreement in more than four installments.

(v) A person regularly extends consumer credit only if it extended credit (other than credit subject to the requirements of §226.32) more than 25 times (or more than 5 times for transactions secured by a dwelling) in the preceding calendar year. If a person did not meet these numerical standards in the preceding calendar year, the numerical standards shall be applied to the current calendar year. A person regularly extends consumer credit if, in any 12-month period, the person originates more than one credit extension that is subject to the requirements of §226.32 or one or more such credit extensions through a mortgage broker.

Footnote 3

(3) Unless defined in this regulation, the words used have the meanings given to them by state law or contract.

Tammy, So sorry to hear that

I didn't have time to look for the definition section but I was sure the answer to our salvation was there.

http://www.federalreserve.gov/newsevents/press/bcreg/20110419a.htm

That is the link for you to voice your comment. Scroll down to the bottom of the page and enter your comment and read what others are posting. Choose to be pro-active and fix it while we can rather than re-active and have to try to find a way to work around a screwed up situation.

thanks for the info...how do we keep up with all the changes and do everything else we are doing......MCArmel1...wolves are beautiful animals(badly understood)