You may have heard about H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act. If you read my posts like you should, you would have heard about it here about a year ago when it was introduced in the House because it has some bad real estate stuff in it - I'm just not sure how bad. You can tell me if it's going to ding you. The proposed legislation focuses upon the predatory lending practices of yesteryear and the resulting subprime debacle, imposing stringent requirements on mortgage brokers, servicers, appraisers, etc. Unfortunately, owner financing gets caught up in the dragnet, and the impact could be devastating.
What it does, in part, is prohibit anyone from selling a house with seller financing more than once every 3 years unless they have a mortgage originators license. The authors claim it will not impact 'Mom & Pop' sellers but it would require real estate investors to obtain a license if they want to carry-back loans on more than 1 home every 3 years. Since many current lenders can't even qualify under the terms of the new S.A.F.E. Act, it's a fair assumption that most investors would be locked out as well, resulting in a significant drop-off in their business.
It's estimated that nationwide as much as 19% of the housing stock has been picked up by investors the past 18 months. I know in my market it's closer to 50%. I honestly don't know how many offer seller-carried financing but according to several investor websites it's quite a few. This will undoubtedly have a further dampening effect on home sales as yet another source of funding is dried up by the administration, which is hell bent on controlling, regulating and/or taxing virtually every aspect of our lives.
Taking it a step further, HUD has proposed to eliminate ALL seller financing for a home unless the seller lives in the property thereby eliminating all investor carry-back financing from the table.
NAR's response to this is that they tried to fight it and essentially got steamrolled. The juggernaut that is this administration essentially rolled over them and told them if they didn't go away they would even take the 1 every 3 years options away.
Interesting that all 12 of the bills sponsors are Democrats including Barney Frank, Paul Kanjorski and one of our local lunatics of the left, Joe Baca. (Baca has just stated he will no longer fly through Arizona on his way to DC in protest. Oooooh. That'll leave a mark.).
I encourage you to read the text of the bill here: HR 1728, Mortgage Reform & Anti-predatory lending Act
Then read what the National Real Estate Investing Association has to say here: Law Could Kill Your Business
Here's another consumer website: HR 1728 - What is says and why it will hurt consumers and small business.
I sincerely hope some of you are getting as bothered as I am about this continued infringement on our business and on the private property rights of individuals. These knee-jerk reaction bills by know-nothing legislators are doing way more harm than good to our industry and to the recovery of this country.
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