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Colorado Discourages Seller Financing

The Colorado Real Estate Commission says Dodd Frank is too complex and creates liability for both the Realtor and seller. They have basically told Realtors not to get involved in any seller financed transaction. They say refer buyers and sellers to a LO or a lawyer instead. You can’t find a LO who wants to get involved with a seller financed transaction. Not all buyers and sellers can afford a $250 an hour attorney. Now property owners and buyers who want to use an installment sale are being denied access to a Realtor”

“Real estate brokers are prohibited by Colorado law from taking a residential
mortgage loan application or offering or negotiating the terms of a residential
mortgage loan, including a seller-financed loan. A real estate broker should not
even assist a seller or buyer in any way with the application process or related
documentation or engage in any loan term discussions if the seller-financed loan
involves residential property. This caution would include not giving a seller advice,
including as to whether or not the seller might be “exempt.”

See link:

Proposed Tax Reform Includes Ending 1031 Exchange

The ninety two year old 1031 exchange statute is once again the target for abolishment in current tax reform proposals.


Cops to Inspect Homes Without Notice For Illegal Rentals

Authorities in Long Island have launched a crackdown on homeowners who rent their house out to tenants who have not been registered under a “zero tolerance” program that will see police conduct home inspections without notice.

Landlords in the Long Island community of Westbury will be targeted by a newly created police “Housing Enforcement Unit” that will “modify search warrant law to eliminate prior notice, aggressively use warrants and housing sweeps on a regular basis.”

Residents are being encouraged to report their neighbors to authorities if they suspect they are housing tenants who have not been registered with the government.


Home Sales Held Hostage by Junior Lien Holders

Tom Axon’s mortgage-collection firm gets about 25 calls a day from delinquent homeowners’ brokers seeking approval to sell their houses for a loss and avoid foreclosure. We’ll help, his staff tells them, as long as we get paid enough.

Axon, working with co-investors, buys distressed U.S. home- equity loans and other junior real estate liens, often for pennies on the dollar. Investors like Axon have to be dealt with whenever a home is sold in a short sale, a transaction in which the lenders agree to accept less than what’s owed on the property.

“The short-sale brokers know us — they know we’re not cupcakes,” Axon, 60, chairman of Jersey City, New Jersey-based mortgage-servicer Franklin Credit Management Corp., said in an interview. “At the end of the day, my friend, you signed a contract. You owe money and we’re willing to reach an accommodation that is commensurate with your ability to pay.”

Tough bargaining by second-lien holders is delaying deals and killing some short sales, even as banks embrace the practice to avoid costly foreclosures and help clear the market of homes that are worth less than the loans on them, said Vicki Been, a New York University law professor who has studied mortgages.

“It’s an opportunity for the second-lien holder to charge a price for their cooperation, because it’s needed for a short sale,” Been, a director at NYU’s Furman Center for Real Estate & Urban Policy, said in a telephone interview. “If they’re too greedy, it may squelch the whole deal.”


Don’t Buy A Note Or Own A Rental In This Town

From:  “W. J. Mencarow (The Paper Source, Inc.)” <>
To:  W. J. Mencarow <>
Subject:  post
Date:  Sat, 08 Mar 2014 19:37:01 -0700


Whether you may rent out your home in Winona, Minn. is now up to the government.

You need to buy a permit.

But that’s not all. Permits are rationed based on a completely arbitrary percentage. It all depends on when you tried to get a permit and whether you happen to live on a block where other homeowners have already gotten one.

The local government
grants only 30 percent of homeowners
on any block its permission to rent
out their home. Whether someone
gets a permit depends on where they
live. In areas with few renters, some
get new permits. In areas with more
renters — forget about it.
Winona’s rental ban is especially
harmful to property rights, because
the law restricts the percentage
of homeowners that may possess a
permit, not the percentage of homeowners
that may actually rent out
their homes. Some Winona homeowners
possess rental permits but
have never rented out their homes
and have no plans to do so. This
deprives neighbors on the same block
of the ability to rent out their homes
when they genuinely need to do so.
Some owners of hard-to-sell
Winona homes want to rent them to
help make the mortgage payments.
Because the city will not allow that,
some of them face foreclosure.
In addition, being able to rent a
home increases its value, but
Winona’s law undermines property
values at a time when property values
are already falling.
The case has national implications
for property rights, because it
seeks to answer an important constitutional
question: May the government
arbitrarily restrict the property
rights of some but not others?
So far, rental bans like
Winona’s are unique to Minnesota,
existing only in the cities of Winona,
Mankato, Northfield and West St.
Paul. Rental bans, however, are
spreading quickly. Stopping their
spread in their infancy would be a
major victory for property rights
and show cities nationwide that they
cannot exercise their zoning power
to unconstitutionally limit the rights
of homeowners.