WHOA!! Dodd Frank Act Set to Terminate Seller Financing

AND ONE MORE TIME!!!!!!!  READ THE BILL AND READ NAR'S SUMMARY.  Seller finance is exempted with some simple yet important rules.  Once again here is NARS summary, and this is why they did not get bent out of shape over this.

"The DFA definition of mortgage originator exempts an individual (or an estate or trust) that provides mortgage financing for no more than 3 properties in any 12 month period from the requirements of Title XIV, but only if the financing meets certain rules:

1. The seller did not construct the home.

2. The loan is fully amortizing (no balloon mortgages allowed).

3. The seller determines in good faith and documents that the buyer has a reasonable ability to repay the loan.

4. The loan has a fixed rate or is adjustable after 5 or more years, subject to reasonable annual and lifetime caps.

5. The loan meets other criteria set by the Federal Reserve Board." 

These rules make perfect sense and are designed to protect buyers from the same kind of practices by individuals that the banks were doing when they did in this country.  Does anybody ever read stuff before they get all anti gov.

Leslie:  Of COURSE they don't read what the real information is from the source.  They are much too busy being anti-government... and cannot see anything else because of all that steam that is coming out of their ears.

And Paddy... if the conservatives are so anti-government intrusion... they need to continue that theme when it comes to social issues and women's health.  You talk about "CHOICE?"  If you want to talk about stopping government intervention... then the christian-taliban right needs to get out of people's bedrooms, quit taking away from women the control of their bodies... and quit refusing to acknowledge freedom of choice in marriage equality.

There are a lot of two-faced far-right conservative taliban out there.  What about anti-government intervention there ?

Obama was not my first choice... Hillary was.  But Obama, such as he is... is light years ahead of anyone the far right has to offer.  And, with that in mind... and with those as my probably choices... I will vote for President Obama again.  The lesser of two evils, perhaps.  But in this case... he is the Much Lesser evil. 

If only Bill Clinton could run again.  What a ticket...  Bill Clinton for President, and Debbie Wasserman Schultz for Vice President.

Paddy, unfortunately, in my opinion, the fact that you would have voted for Donald Trump says a lot about you.  Of all the folks the Republicans have currently in the mix, the only one I would consider voting for is Jon Huntsman.  Unfortunately, if he gets elected... we get Cantor, both the Pauls, Bachmann, Boehner, Walker up in Wisconsin, McConnell, and the rest.

I wish we could get take the 15% from the far right, the 7% from the far left, and with the other 78%... create some sort of centrist part.  If Huntsman ran as the Centrist candidate, I could see myself voting for him then, but not as a Republican.

Re: Jon's comment.  Those numbers are miniscule.  Peanuts... compared to the millions and millions that are funneled into the Republican Party by many of those same entities.  What are the figures from the Koch brothers ?  Post those, why don't you.

And Paddy... it is Jon's comment, not Jon's post.  You wrote the post... remember ?  LOL.

Right when you think they could not make things any worse for the real estate market & the economy, they do something again to make it worse.  It is unbeleivable! As soon as the lender paid option become the rule for mortgage brokers, the banks lowered their fees & we no longer can compete.  Of course, as soon as they have put enough of the brokers out of business, they will raise fees and rates again.  Now they want to stop seller financing as well.  Maybe they should just eliminate all loans except for th big banks directly, kill the economy & get it over with once & for all.

Well stated in comment #100 Paddy.

Once again.. the Federal Government is intruding into something they have no business being involved in. Led by somebody that is completely clueless to begin with... Barney Frank has openly stated he wants the Federal Government involved in every aspect of Real Estate.

blogs.wsj.com/washwire/2009/09/08/hud-secretary-barney-frank/

"But Frank tells Weisberg that he isn’t planning to leave Congress in the near-term. “I want at least two years with President Obama and a solidly Democratic Senate so that we can get the federal government back in the housing business,” he says."

The true intention of all of this regulation is not about Consumer Protection... It's all about control... bottom line.

From the NAR summary of the Bill:

5. The loan meets other criteria set by the Federal Reserve Board."

The Federal Reserve is not even a Government Agency --- It's the Godfather of the Big Banksters who has one Main Intention --- making money for the uber wealthy Banksters by creating Debt by lending money that does not even exist.

For the past 3 years, our Representatives in D.C. have been doing everything but what they should have been doing... and now we have a looming financial crisis with no sustainable solution in sight that will make the crisis of 2008 seem like a hiccup.

It's absolutely Repulsive.

It just continues to blow my mind that there are so many people who have commented here as if they know what they are talking about... when all they are doing is regurgitating back what they heard some doofus spew.  I mean... talk about "clueless."  What I see here... for the most part... is very simply... scary.

So this is intentional - not just one of those unintended consquences of some other dumb move then overly enforced by some one too stupid to get an honeest job?

Paddy, I really hope this doesn't happen...seller financing is really what would help move a lot of real estate transactions nowadays! I just re-blogged this post. :)

Well this thread got interesting! Given my choice, I would go back to the land patent days when you ACTUALLY, REALLY owned your land, including most or all of your mineral, air, and water rights. All we do now is essentially own/rent our surface rights anyway. Further restrictions on property rights are just another nail in the coffin of property ownership. Besides about a third or so of property is owned free and clear, so why should the government have ANY say in what two consenting adults agree to? As to mortgaged properties, There are some challenges with due on sale/acceleration clauses and the like, but so what? That's the original borrower's problem, not the new buyer's problem (it would only be the new buyer's problem if there was fraud involved).

Karen I object to you calling everyone clueless. You repudiate the facts and call out the Koch Brothers, but provide no facts of your own. So let's compare the Koch's with a major Democratic supporter, George Soros. Here's the breakdown of their individual donations:

The government once again taking away the free market place away from Americans. As Americans we should be voting these idiots out of office. At least in our state, they are taking themselves out of office.

Thank you so much for bringing this to our attention!  As much as I've read about DFA, I never noticed this.  I was on vacation when the post came out and - not wanting to be accused as believing everything I hear - waited till I had a chance to review.  Okay, so I haven't read all 170+ pages yet, but even NAR's synopsis make me cringe!

1. The seller did not construct the home.  So if I built my house 40 years ago I can’t finance the sale now?  How will they regulate who built the home?

2. The loan is fully amortizing (no balloon mortgages allowed).  A 30/15 is not allowed?  Why not?

3. The seller determines in good faith and documents that the buyer has a reasonable ability to repay the loan.  How does a Seller determine this?  Are they held to 28/36 DTI?  Do they need to receive training on how to calculate DTI?  Must they fully document with credit report, paystubs, tax returns, 4506 tax transcripts, etc. ?  How long must they retain evidence of this ‘ability?  3 years… 30 years…?  Where do they retain this information? In their home? (Which, by the way, is all my personal information)  Will they now be subject to the Safeguards Act as well?

4. The loan has a fixed rate or is adjustable after 5 or more years, subject to reasonable annual and lifetime caps.  Why?

5. The loan meets other criteria set by the Federal Reserve Board.  Meaning Credit Score Disclosures, Adverse Action Notices, and the dreaded Reg Z Truth-in-Lending??????

As a Compliance Officer I understand how difficult it is to keep up with Lending Regulations - how in the heck is a mere individual supposed to keep up with this?  And - as someone asked - whose job will it be to eductate the Seller?!!  The Realtor?  Escrow?

This is beyond ludicrous stupid.  I don't know how anyone could support this and I thank you for bringing it to the attention of all.

Jana

This is going to really hurt investors, yet again, at a time when Obama is allegedly trying to reduce government regulation of businesses. "Allegedly" being the key word.