WHOA!! Dodd Frank Act Set to Terminate Seller Financing

Reblogger Frank Rubi
Real Estate Broker/Owner with Frank Rubi Real Estate, LLC La Broker 09995688826

Just another way to slow down the small buisness owners. This year  owner financing has been increasing. With bank requiring as much as 30% down, investors are turning to this time tested approach to moving real estate. Lets get active and not let things like owner financing and our mortagage interest deduction become a thing of the past.

Original content by Paddy Deighan JD PhD

Those elves in Washington are at it again.  The Clueless Duo, Barney "Circus Clown" Frank and Chris "I do not have to pay back loans" Dodd have snuck key provisions into their bill.  CALL YOUR REPRESENTATIVE TODAY!


In an incredible show of effective bank/mortgage lender lobbying or government ignorance the Federal Reserve is considering rules that may end a seller's ability to finance their own property and sell on terms to a buyer!


The problem is that the Federal Reserve has proposed new rules from implementing the Dodd Frank Act. Those rules would effectively eliminate seller financing! If you believe that seller financing is important to this real estate market, we need you to let them know that you don't want these rules enacted. The comment is this Friday, July 22nd, 2011.


It is incredible that in an environment where mortgage financing is hard to get and the real estate market is hampered by problems many have getting loans, that the government is set to essentially outlaw seller financing.


My guess is that mortgage companies and banks are lobbying to prevent seller financing so they have the market all to themselves and can charge whatever interest rates they want and impose any terms they want. The numbers of creative financing deals such as lease-options, seller financing, options and other creative financing deals are increasing so sellers can get properties sold.  This is a natural outgrowth of difficulty in finding buyers who can get a conventional mortgage.


Sellers need to sell, buyers want to buy and in many cases the banks and mortgage companies stand in the way because they are so strict with lending criteria including high down payment requirements high credit score requirements.


There are many people who have blemished credit because of the economic downturn - even foreclosures and short sales but who are good qualified owners but are locked out of the housing market unless they can get non-traditional financing.


Our over-zealous government is now proposing that it completely control seller financing in this country and the rules are so convoluted (179 pages) that most sellers will be too scared to offer seller financing.  It is such a bad idea to eliminate a way to sell houses and get buyers financing at a time in our history when sellers need to sell and buyers want to buy and the residential real estate market has been hampered by financing issues to eliminate an alternative.


The problem is that the rules were made for traditional lenders to follow but the problem is that If these rules are passed without an exemption for seller financing, an individual who wants to sell their own home will be required to understand and comply with 169 pages of rules with draconian penalties for non-compliance that could bankrupt a seller.



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Kathleen Vetrano
RE/MAX Gateway - Falls Church, VA
Helping YOU Achieve YOUR Dreams

Frank,  I did see this come up this week.  It does seem....all of it to be getting a little crazy.  They need to get down to business and stop the nonsense.

Jul 22, 2011 07:42 PM #1
Deborah D
San Ramon, CA

Frank, thanks for the great explanation. I also saw this issue this week in one of the emails I receive. Wondering how we can tell the government not to pass these rules.  It's alreay hard for buyers to get financing with cash deals increasing at higher rate, and we certainly do not want to hamper the soft market even further. If we can all voice our concerns, and buyers and sellers, that would be beneficial to everyone..

Jul 22, 2011 08:25 PM #2
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Our people in Washington are doing so many stupid things - it boggles the mind. Any time you see a bill with hundreds of pages, you know that most of them aren't reading it and don't even know what they're passing.

We really do need to clean house.

If they put this through, what about raw land? Banks don't want to lend on it, so...?

Jul 22, 2011 08:56 PM #3
Natalie Vizir, Broker Associate Dana Point Laguna Niguel Homes For Sale
RE/MAX Signature Services - Dana Point, CA
Natalie Vizir

thanks for the post....Was this what they meant by change? We need to be proactive and posts like this are a great reminder why we communicate with eachother here! Now let's take it to the next level and let our government know how we feel!

Jul 22, 2011 10:30 PM #4
Michelle Carr Crowe,Altas Just Call...408-252-8900!
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Well I'll be getting my virtual pen ready for some letters to the gov't.

Jul 22, 2011 10:30 PM #5
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Frank, thank you for sharing the information, The word "clueless" in you article is a compliment to these guys, but remember there were a lot of other folks that we elected that are supposed to know what we want and expect from them.

Jul 22, 2011 11:42 PM #6
John Walters
Frank Rubi Real Estate - Slidell, LA
Licensed in Louisiana

Frank people wonder wy business don't want to invest with this administration in power.  Who know's next what they will come up with.

Jul 23, 2011 08:06 AM #7
1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

That is totally ridiculous that they would expect a seller to jump through those kinds of hoops to finance their sale.

Jul 23, 2011 03:00 PM #8
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