The Paper Source Virtual Note Symposium October 2020

Seller Mortgages May Be Effectively Outlawed

We stopped HUD’s assault on seller installment sales by flooding them with over 5,000 protests.

Now the new Consumer Financial Protection Bureau is considering severe restrictions on them.

The deadline to protest has passed (July 22, 2011).  See snipurl.com/AbilityToRepay to read the comments (scroll down that page for the comments link).

However,  you can still leave your comments on this page — scroll down to “Leave A Reply” — and we will forward them to the CFPB if appropriate.  


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Letter from US Rep. Martin Heinrich (D, NM) to Fed Chairman Ben Bernanke supporting seller installment sales

 

Update Tues. July 19: For those few of you who think that this doesn’t affect individual sellers, I just received this:

“NAR (National Assn. of Realtors) sent me an email today saying that they are going forward with a comment because they feel seller financing is subject to the new rule ‘ability to repay.'”
— Ric Thom,  President, Security Escrow www.securityescrow.com

 

From THE PAPER SOURCE JOURNAL, July, 2011:

The Federal Reserve, which received sweeping new authority under the Obama regulatory reauthorization, wants to effectively eliminate seller-held (a.k.a. purchase money) mortgages. It will do this by enacting a rule for the Dodd-Frank Act prohibiting property sellers from taking back a mortgage unless the buyer essentially can qualify for conventional financing!

What’s more, Ma and Pa Homeowner, who create 95% of seller-held mortgages, won’t be able to qualify buyers under the same underwriting standards that banks are required to perform, and therefore the cash flow notes won’t be created.

If this is enacted it also will remove access to housing for millions of Americans, because seller “financing” is the only way people who can’t qualify for conventional loans can buy a house.

We have precious little time to try to stop this. The deadline to comment is FRIDAY, July 22. See the information below, then go to snipurl.com/AbilityToRepay

Please do it TODAY!!

With your help, the Fed may at least decide that this does not apply to private transactions.  Urge them to exempt seller installment sales from the rule.

(Thanks to Ric Thom [www.SecurityEscrow.com] for alerting us.)



Here Are Some Points You Can Make In Your Comments:

  • Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.
  • Homeowners are not bank officers or mortgage lenders.  By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing.  Thus millions of people will be deprived of home ownership.
  • Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.
  • Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.
  • This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.
  • By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.
  • The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. A  five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.
  • There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy.
  • It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.

 

Some people are missing the point in their comments.  I have seen where people have said the Truth-in-Lending Act only applies to businesses, not Ma and Pa, and that seller financing will not be affected by the new proposed rule on the buyer’s ability to repay.  It doesn’t make any difference if it does or doesn’t.

This week the Federal Reserve will be passing comments on the rule to the Consumer Financial Protection Bureau (CFPB) along with its authority to create the final rule for Truth-in-Lending.  The Bureau will then also have the authority to create new rules for seller financing.  You’re only allowed to offer seller financing for no more than 3 properties in a 12 month period if you meet certain conditions.  One of those conditions is that the “loan meets other criteria set by the Federal Reserve Board” who is passing that authority to CFPB.  There is nothing to stop CFPB from saying, “Let’s don’t reinvent the wheel when it comes to the buyer’s ability to repay and seller financing.  Let’s just use the rule we use to define ability to repay under the TILA”.

I feel it is essential that we send our comments speaking out against using any portion of this proposed rule on the ability to repay when it comes to defining the standard on seller financing to the Federal Reserve Board so they get passed on to CFPB.
When the SAFE Act came out it was unclear whether or not you could use seller financing on property other than your personal residence.  I was told by a regulator that HUD was stunned by the 5,000+ comments we all sent.  Their final rule says you can use seller financing on any of your properties. We need to make sure that CFPB hears our concerns before they consider what the new standard for the ability to repay will be under seller financing.

—  Ric Thom, President, Security Escrow  www.securityescrow.com

A sample letter you can use <http://www.nationalreia.com/federal-reserve-seeks-comments-regarding-seller-financing/>  that was developed by National REIA is available online. Submit this to your US representative and senators as well as submit as part of the proposed rule comments.

 

My Comments To The Federal Reserve

By Ric Thom, www.SecurityEscrow.com

The Dodd-Frank Act does not exempt property owners who wish to use seller financing (installment sale) even though no money is lent, there is no table funding, and under the Truth and Lending Act they are not considered creditors. The Dodd-Frank Act (ACT) does exempt property owners who offer seller financing from having to become Mortgage Loan Originators (MLO) provided they only sell 3 properties or less in a 12 month period and they follow the restrictions below. Yet, the Act subjects the property owner to the same liability as an MLO:

Title XIV Section 1401 (2) (E)

1. The seller did not construct the home to which the financing is being applied.
2. The loan is fully amortizing (no balloon mortgages allowed).
3. The seller determines in good faith and documents 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.

Under this Act the only buyers who will be able to use seller financing are the buyers who can already qualify for conventional financing with perhaps the exception of how much of a down payment they need.

Seller financing has always been the alternative to government regulated financing. It is a meeting of the minds between two private individuals who negotiate an arm’s length contract to purchase property using an installment sale.

The following is a breakdown of these restrictions. I listed them in order of greatest impact on property owners, buyers and the economy:

The seller determines in good faith and documents the buyer has a reasonable ability to repay the loan.
The implication is that the seller must use the ability-to-repay underwriting requirements when offering seller financing consistent with the Dodd-Frank Act which amends the Truth in Lending Act. This new, proposed rule is 169 pages long: snipurl.com/fedrule

The Consumer Financial Protection Bureau has spent a lot of energy developing a new, easy to read, two page mortgage disclosure form. It is unreasonable to expect sellers and buyers to fully understand and apply this 169 page rule. If buyer’s and seller’s negotiations deviate in the least the buyer has up to three years to rescind the sale and demand back all money paid to the seller, or anyone that the seller might have assigned rights and interest to, or any bank that takes the note as a collateral assignment.

This could be financially devastating to the seller. Let’s not forget that today’s buyer will be tomorrow’s seller. These sellers are a diverse group. They come from all walks of life: low income, high income, non-English speaking, seniors, widows, minorities, but this requirement places the same standards on individuals as banks and mortgage lenders, only with more risk – the banker is in the business of mortgage loan origination and factors that risk into his business plan, whereas the individual seller does not have capital reserves and doesn’t do this as a business. Also, unlike a bank, they do not carry errors and omission insurance.

Unlike banks and mortgage lenders, both the buyer and seller are consumers. They should both be equally protected. The buyer is purchasing real property and the seller is investing in/creating a financial product where they receive their equity over time. The seller is relying on the buyer to make monthly payments and maintain and protect the property. Terms are not dictated to either party, but rather they are negotiated between the parties.

Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.

Furthermore, why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.

This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

The SAFE Act does not put in place the ability to repay requirements, or any other requirements, unless the individual habitually and repeatedly uses seller financing in a commercial context. It is HUD’s position that Congress never intended under the SAFE Act to restrict private property owners from using seller financing, unless they did it as a business.

The loan is fully amortizing (no balloon mortgages allowed).
By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.

The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recoognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. Obviously the Act does not recognize that a five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.

The loan has a fixed rate or is adjustable after 5 or more years, subject to reasonable annual and lifetime caps.
This restriction is reasonable, but it will eliminate the ability for any buyer to wrap an existing obligation that has an adjustable rate even if they believe they can afford any rate increase. This is again inconsistent with the SAFE Act.

Moreover, if the seller does not know about the ability-to-repay requirements and that they are not able to have a balloon, they certainly will not know that you have to have a fixed interest rate for the first five years.

The seller did not construct the home to which the financing is being applied.
There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy. There is also that group of unemployed construction workers who built their own homes when times were good and now need to sell. This takes away their ability to use seller financing.

Builders are in the business of building; not of originating loans.

Using a mortgage loan originator to facilitate a seller-financed transaction creates additional risk and expense for both the buyer and the seller. It has been said that a seller financing the sale of his or her own
property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.

Furthermore, there is no provision in a MLO’s errors and omission insurance that covers seller financing. None of the continuing education classes or the exams that an MLO must complete has a single chapter or question regarding seller financing.

Who is supposed to pay the MLO? MLOs can charge a flat fee or up to 3% of the transaction. The only advertisements I have seen so far advertise a flat nonrefundable fee of $450. This fee has to be paid in advance, which makes sense, because why would a MLO spend hours and hours on an installment sale transaction which might not close? If the buyer pays the fee, then this is a forced origination fee never before imposed on buyers seeking seller financing. Why should the buyer have to pay money just to have an offer presented to the seller?

A lot of buyers use seller financing because they are low income individuals, and seller financing, up to now, has been an inexpensive way to purchase property. If the seller pays they will have to pay money for the simple act of the MLO forwarding them the installment sale offer. If the seller receives multiple offers this could easily run into thousands of dollars in MLO fees just to sell their property.

A lot of sellers are also low income individuals. The MLO will have to be a part of every offer and counteroffer because the sale and terms of an installment sale are one and the same and cannot be separated. For instance, the buyer might be willing to pay a higher interest rate if the seller is willing to come down on the price and down payment.

A lot of seller financing takes place in rural areas that are underserved by mortgage lenders and banks. It is going to be very difficult to find a MLO in those areas who are also willing to take the risk facilitating a seller financed transaction.

This has the potential of pushing seller financing underground – not a desirable result.

The Dodd-Frank Act allows a property owner to use seller financing without having to become a mortgage loan originator as long as they don’t use it more than three times in a 12 month period and comply with the above restrictions. In the SAFE Act there are no restrictions to the number of times seller financing can be used as long as you are not in the business of being a mortgage loan originator. The coauthor of the Dodd-Frank Act, Representative Barney Frank, sent a letter to HUD on July 22, 2010 urging it to place the maximum amount of seller transactions that an individual could do before becoming a MLO, or
having other restrictions on them, at five in a 12 month period. I would propose that the Dodd-Frank Act adopt that same number and place no restrictions on seller financing until 5 is surpassed. The only restrictions that should apply to 5 or less are those restrictions that the states already impose either through state statute or case law.

Under The Act loan officers at community banks do not have to become a Mortgage Loan Originator if they originate 5 or less transactions in a 12 month period. The rationale is that this is burdensome, costly and there is not enough volume to create a systemic risk. Ma and Pa on Main Street should be granted those same allowances. The Act puts more restrictions and risk on Ma and Pa than it does on financial institutions.

In watching the debates in Congress last summer it was repeatedly said that the Wall Street Reform and Consumer Financial Protection Act would not negatively affect or over-regulate Ma and Pa on Main Street. If this doesn’t negatively affect and regulate seniors, minorities, and lower income individuals on Main Street I don’t know what does. These restrictions will all but do away with seller financing, which will have a negative impact on housing, existing property owners, those desiring to be property owners and the economy.

Ric Thom is owner and president of Security Escrow Co. He is recognized as one of the leading authorities in seller financing on real estate contracts.
www.securityescrow.com

177 thoughts on “Seller Mortgages May Be Effectively Outlawed”

  1. Very good article! This article is very much to the point, and it is to bad Washington just do not get this point of view. Washington is only interested in their own selfish agenda of power and control and eventially having total controll and turning the U. S. over to a totalitarian government. This form of government did not work in Germany, Soviet Union, and it is failing in China. The only reason it has existed as long as it has is because we prop it up with the aid of the present government When the power hunger government of the U.S. gain total control, when average people do nothing then we will have killing and violence in the streets of america; so do not take away any oy the rights the rights of property owners or small business people

  2. This is absurd and NEEDS TO BE STOPPED!!! Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud. This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

  3. I have also spoken out against this at the recommended website. I appreciate Jeff’s Newsletter for bringing this to my attention and greatly appreciate Ric Thom for his rebuttal to the proposed regulation.

  4. Stop! We are not bankers and simply didn’t have the money the bankster’s lobbyists did to “donate” to Dodd and Frank’s campaign/retirement coffers. You’re kill us (America’s citizenry) out here.

  5. Seller Financing is not a loan!
    It is the terms of sale/purchase of a property.

    This act infringes upon a person’s right to contract with another. It will deprive people of the opportunity to use installment sale as a technique to generate income to supplement their retirement income.

  6. If the banks aren’t lending and now home buyers cannot buy from sellers, who will we be selling to?

  7. Let me say that I am not happy with the Washington Establishment
    trying to over regulate and tell us what we can and cannot do.
    This piece of legislation is a part of the Democrate party via
    the Federal government trying to social enginner the economy
    and our lives. The effects are to create a longer and more
    severe economic recession on the housing market and the
    economy.

  8. It is not the business of the government or anyone else if the seller finances the sale of his real estate or any other property he owns. Washington has fouled the economy and the financial community so loans just aren’t being made and now they want to stop seller financing. It seems they want to completely stop the economy. The feds are out of control and continue to overstep their Constitutional authority; time for tea in the harbor.

  9. Amesha C. Smith

    Oh boy! More government regulation please! What ever happened to the government being we the people and not some evil entity of elitists in Washington, D.C.? Two private parties should be able to come to an agreement between them if they want without government interference. In my mind this is a form of confiscation of personal property, like eminent domain, without proper compensation. Does anyone in Washington, D.C. read the United States Constitution anymore? When are they going to stop treating people like they are stupid, naughty children who can’t handle their own affairs. We need to take personal responsibility for our actions and stop blaming other people when we get into trouble, and the federal government needs to let free enterprise run its course. I am so dang tired of all of this nonsense!

  10. James Atkinson

    Dodd-Frank is a colossal overreach by government and the framework for the destruction of our free-market economy. It will eventually be overturned, but not before inflicting enormous damage. Many will never recover in their lifetimes. Are we Americans too helpless? Are we supposed to lie down in the face of tyranny? Winter’s coming.

    Our California Department of Real Estate has surrendered to the Fed and has virtually ignored its duty to support it licensees. It is no wonder people are fleeing this state.

    Revolution II is coming. If not, we’ll all end up in a camp surrounded by barbed wire.

  11. Buster Duncan

    By requiring people to qualify buyers using the same standards as a mortgage company or a bank is too time consuming and will cause all to refuse to offer seller financing of any type, thus preventing a large group of people from owning a home and allowing others and myself a way to increase retirement income.

  12. Why on earth does the government need to tell property owners who is a good candidate to borrow money? (Is this the U.S. government who cannot handle their own money but think they can tell *me* how to handle money correctly? Seriously? Just by the very fact that a homeowner HAS EQUITY in their property already PROVES that THEY ARE BETTER AT HANDLING THEIR MONEY than the government who is now trying to get involved!! Un-freaking-believable….) Why enact so many restrictions on small property owners who only sell a few properties? Why make it more difficult for buyers to buy from these owners?
    Bad idea to submit individuals to so many restrictions for no good reason.

  13. Regarding the new proposal to limit owner financed mortgages:

    Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.

    Homeowners are not bank officers or mortgage lenders. By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.

    Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.THis is more or elminating on our freedoms.

    Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud. This is a potential nightmare

    Please reconsider this portion of the law,
    THanks,
    Bill Goumas

  14. Hi and thanx for the article…This is another ploy to take blame away from the real crooks of the industry (the banks and lenders) and put try to put all money that they mishandled in the first place, away from the very people like private home owners that want to help another family purchase a home. The banks are so greedy, that less and less people other than the well to do be able to purchase a home. A homeowner should be able to do what THEY want with their own property whether or not they want to seller-finance a property to eventually take the property out of their hands and dispose of their own property the way they please without banks greed to make all the money off of their property. Remember, the banks make the interest in addition to the principal and the owner only gets a final check for the sale and no long term residual income with interest. The interest is taken of the monthly payment first and at the highest percentage of a mortgage payment each month…..Let petition the government to have the banks and lending institution and industry investors shift and lower how much of a percentage of interest that is paid on the mortgage each month? Let’s see how much they want to attack the little guy then. No one has bought up the real problem and facts as to how much interest percentage is paid on a mortgage payment each month for then it will raise the confidence of the home buyer to be able to own their home quicker with less interest each month going into the banks pockets and have more equity just in case the as in the past the values of homes drop. Then they wont be such a panic to how much equity is available to keep them feeling safe in their American dream of owning a home. This method of raising the principal payments towards paying our mortgage and lowering how much of a percentage the interest payment go to the banks each month with also keep the Realtor, banks and appraisal system more honest and we wont have to be over regulated out of doing business in the mortgage industry. So eventually, no matter what, when the market tends to drop in value, the homeowners will still have reasonable equity in the property. I have spoken!

  15. Well, these two power-recognition-hungry Senators (Dodd-Frank) have nothing else to do but sit around in their plush offices that we citizens paid for, and think up stupid ideas… just like the rest of the power hungry elected officials in Washington D.C. including state legislators.

    As usual, they do a lot “busy work” when people like me and you try to make enough money to “survive.” Where are the jobs they are promising day after day?? I’ve been looking for more than two years! Instead, they come up with ways to KILL jobs, and KILL trust! Who ever got hurt in any way including financially, from the real estate note business?

    I’ve been in the real estate business most of my life, and it’s common knowledge when brain-dead politicians got involved in the Savings and Loan fiasco in the 70’s, and then regulated the appraisal business, and who knows how many things after and before… the end result has always been simply making the government bigger… less effective… less efficient… and certainly less reputable!

    But, we all know when a bureaucrat gets one finger in his/her nose and another one in something that’s been working well for hundreds of years… even in the cash flow business before America’s independence, the result of their efforts ends up being lot of manure being spread around.

    Anything to stifle free enterprise in this country is the name of the game these days.. And, as long as people like Dodd and Frank are getting their enormous salaries and pensions for doing nothing important, then this country will continue, sadly enough, to deteriorate.

    My solution would be to put EVERYBODY on the government payroll, pay ourselves from the tax fund we self-regulate… and if we don’t make enough money to pay the bills, refer the bill collectors to the government.

    In reality folks, the bureaucrats, once they get elected and join the rest of the do-nothing group in Washington, they no longer give a rat’s you-know-what about what happens here in the real world of work… and most of them didn’t really care anyway, they just wanted the power that comes with the position they sought.

    If this particular legislation passes, I hope the bone heads have the foresight to pass an amendment in which I can borrow money from the government at 1%-2% interest like the banks, and then allow me, like the banks, to invest the borrowed money in secure investments returning 4%-5%, like the banks do, allow me to raise my criteria so nobody – friends, neighbors, etc., can qualify to borrow my money, like the banks do, and I can invest that borrowed money in “guaranteed return” profits, like the banks do… and not have the hassles of dealing with such highly qualified borrowers that don’t need the money anyhow.

    Well, who said Politicians were intelligent or really cared about the people who elected them?! Or had a conscience or scruples.

    So, I don’t think any of us can come up with a “rationale” for putting a stop to what they’re doing, because if they had any common sense to begin with, it would have never been an issue.

    There are more issues than you and I can think of in a year to justify a revolution… and if I were much younger, I would give serious thought to leading one… if I could get a government guaranteed loan to fund it, of course.

  16. I just read this article. I simply cannot believe it. To an already crippled housing industry, this would be the coup de gras. Seller financing is the only hope for many sellers.
    I think voters would mass to polling places to turn out elected officials who allow this to happen. I would lead the fray.
    I agree this is a central government power grab, but this goes into the senseless box. As each official votes for this, I would encourage more sensible officials to say, “Bye Bye”, as they walk down the aisle. This is a BYE BYE proposal, in my opinion.
    I urge everyone to write someone. For my part, I plan to write tonight, via internet.

  17. Stop the madness!
    Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.

    Homeowners are not bank officers or mortgage lenders. By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.

    It is past the time that America, that should be for the People and start looking out for the Seniors(55 and older) that will surely die before they are paid back the mortgage they are holding…Stop imposing such rigid rules and regulations on people who has worked so hard to acheived part of the American dream “Which Is To Become A Homeowner!”

    Let The American People Be Free! Is this not why Our American Troops are fighting wars all over the world for…Freedom? It Is All About the Constitution of the United States!!

  18. One step closer to nationalizing home ownership. What a disaster!!!! What is happening to America was tried in the UK some years ago. How ever home owners protested and it didn’t come to pass. Time for Americans to stand up for their rights and protect the American Dream. Fire the politicians that want to take away your liberty and freedom to choose. Is the American spirit dead? Get up and fight and show by your vote in 2012 this tyranny will not be tolerated!

  19. Unreal. This could effectively deprived millions of people of home ownership. Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud and creates the opportunity for predatory borrowing.

  20. Jennifer Gomez

    This is an outrage!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! It makes me sick and I can’t believe this notion of destroying free enterprise in this country!!!!!!!!!!!!!!!!!! Obama needs to be stopped. How dare he undermine the very principals that this country was founded upon. We are slowly headed toward a socialistic and communistic society. What a travesty. Shame on Obama to propose such a horrible idea. Keep free enterprise! Seller financing is a keeper!

  21. This proposal is simply unbelievable.

    For decades seller financing has been bringing home ownership to those who can’t otherwise qualify. Buyers for whom a seller’s breaking the traditional rules of lending has been both a godsend and a provident move for the borrower, will now be totally out of luck and will remain outside the possibility of homeownership. Those sellers for whom a privately financed sale is the only possible solution to sell their property, will suffer equally.

    We face the total elimination of the seller-financed sector of real estate sales and yet more unreasonable and anti-competitive restrictions on the disposition of private property. I guess Barney Frank thought he hadn’t yet done enough for the nation by creating the greatest fraudulent lending bubble in world history, for which our great grandchildren will be paying. Now the same banks that went broke making “fog a mirror-get-a loan” mortgages and were resuscitated at disastrous public expense will be effectively the only source of mortgage credit. Mom and Pop will then only be able to cash out and invest their funds in the money market, typically receiving a fraction of the yield otherwise available in a mortgage secured by an asset they know and trust. Seller financing entrepreneurs who actually treat their money as their own and exercise the natural prudence of self-interest will be out of business.

    Lots of people will suffer under this proposed law:
    Less home ownership,
    lower retirement income for Mom and Pop,
    increased foreclosures,
    less employment,
    less freedom for everyone;

    –Gee, this really sounds like more political madness!
    Any politician who votes for this law will remain in my voter’s gunsights and viewed as a destructive varmint who needs to be blown out of office as soon as possible.

    I thank the other commentators at this web site who have done such a thorough job of documenting the disastrous consequences of passing this law.

  22. I believe that this is a blatant attempt by the boys and girls in Washington DC and the banking/mortgage/finance lobbies to stop individuals from conducting private transactions. By not engaging mortgage originators or banks or finance companies, we are depriving them of income that they feel belong to them. The argument that these institutions have a better handle of evaluating a person’s ability to repay his/her debt should just look at the last few years. They get greedy just like anyone else and will toss out proper underwriting for the sake of the almighty buck. Besides, if you are really honest about the purpose of the underwriting, it is just a snapshot of the borrower’s financial situation at the time of the transaction. Suppose the borrower losses his/her job the very next day? Will they turn around and give back the house to the bank and admit that they no longer qualify? Seller financing transactions can be more flexible than institutional financing since you are dealing with individuals who can make adjustments, if they can feel justified, rather than the unfeeling, all numbers institutions.

    What will be next? What other private transactions will be made illegal by our overlords?

  23. i doubt this or any comment here will do any good because our wonderful fabulous brilliant eminently caring super awesome government will continue to ride over the people they are supposed to be serving and make it less possible for them to survive and thrive while creating a virtual monopoly on making money (for themselves and all their cronies). and they wonder why the americans who aren’t hypnotized by the notion that the fed is necessary truly hate them. i hate them more and more with every passing moment and with every announcement like this (no seller finance- so the banks can keep making all the money). will these comments do any good beyond a slight venting of the people’s rage? no! because the government is made up of greedy bastards that JUST DON’T GIVE A FLYING FFFFFFFFFF!!!!!! and now that i’ve expressed freedom of speech against them, i expect to be hunted by the monitors, jailed and/or killed.

  24. How many more laws do we have to suffer through that take natural individual’s rights away from citizens? What is more basic than to own our own homes and the freedom to buy and sell those homes without government interference?
    Maybe these lawmakers would like to provide housing for the people who don’t have a roof overhead because of this law…you think?

  25. Darrell T. Elkins

    This proposed law takes away the rights of the individual that owns property to decide how they wish to sell that property and for what amount. (Seller financed property is generally considered to be worth more than property not seller financed.) In the past seller financing has been a major, and sometimes the only way, the owner or purchaser could arrange to sell or purchase property. To take away this freedom, to have this additional option regulated for either party is not in the interest of American liberty. Further it should be up to the seller of property that they own, what financial assurances they want from the propective purchaser to decide if they wish to finance the sale of the property, not the government. In my opinion, this proposed regulation will be bad law and hurt many citizens who view seller financing, without government restrictions, as a valuable option. Please do not allow this legislation to be enacted at either a state or federal level. Thank you.

  26. This is part of a larger plan to remove the ability of free Americans to conduct their business and prosper. The Federal Reserve needs to be eliminated. The people need to rise up and fight this tyranny. Call your Congressman or Congresswoman and scream about this. This is all about taking away your rights as an American citizen. It wasn’t the secondary market that caused the mortgage mess, it was the FED and the criminals at Wall Street, and yet the government takes action against the little guy, the guy that had nothing to do with the criminal debacle.

    This is truly an unbelievable thing that’s happening, and it’s every bit as bad as communist Russia ever thought of being.

  27. Big government is too big. Banks have too much power already.
    What happened to free enterprise and the rights of individuals.
    Banks need to be more reasonable with their rates of interest.
    I may want to downsize and sell my home to an individual to have monthly income in my retirement.
    The proposed regulation is just one more attemt to take away our freedoms.

  28. •Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.

    •Homeowners are not bank officers or mortgage lenders. By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.

    •Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.

    •Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.

    •This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

    •By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.

    •The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. A five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.

    •There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy.

    •It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.

  29. taking away seller financing is taking away our basic constitutional rights. It will also result in making the housing market twice as bad as it is.

  30. Elimination of seller financing will hurt the housing market that much more. It is a common practice where the government and the banks are not on the hook for bailing out.

  31. Another Law for less freedom .this means more control .with this kind of control there will be more homeless. More home less means more people looking for Government hand out’s .Is the Government looking for yet a bigger market crash if this goes through that’s what will happen. The federal Government all ready has a 14 trillion dollar deposit. Due to there in ability to manage money.
    Owner financing helps thousands get in to a home they would never be able to afford is the Federal Government jealous of an entrepreneur that knows how to make the best out of bad situations. after all it was an entrepreneur that started this great county so why is it that the lazy politicians think they need to come up with ways to stop a single family man or woman from making a buck .
    What is the difference between traditional financing and the owner being the bank .We do not need any more new laws that stop an honest person from making a buck .we need less Government and more entrepreneurs .
    Most politicians that i know in Government have never tried to make it on there own they should try it some time and stop thinking up new laws to protect the Lazy crooks.
    why not come up with laws that help good hard working entrepreneurs

  32. Seller “financing” provides housing for millions period. It give buyers and sellers options for different forms of financing. This is at the heart of the American way. A loan from one to another. Washington fix your own house before you play with another mans castle. Stop controlling our every creative housing move.

  33. Seller financing fills a big void in the real estate world. In this economy when sellers need to sell thier property for financial reasons, seller financing separates them in the sea of real estate inventory. For some buyers, seller financing is their only hope for home ownership. For various reasons, they are not eligible for bank financing such as lack of credit history, the bulk of thier income comes from cash sources (yes, that happens), lack of down payment, clouded credit due to unforseen circumstances like health issues, loss of job or loss of home due to forclosure or short sale, or too short a job history. A seller is not qualified to determine a buyer’s abilty to pay, and also, this sets up huge potential for predatory phishing, increasing the risk for fraud and identity theft. How can a buyer know that they are negotiating with a bona fide homeowner/ seller? On the flip side, there can be predatory buying where an informed buyer purposely takes advantage of an uniformed seller for the purpose of having free housing for 3 years, plus the ablility to sue for damages. The deviate mind can think of many more ways to use this to thier own advantage. A savy buyer can think of ways to falsify information and a seller, not having the tools that banks have to confirm the information, can be easily fooled. In the end, the seller is at risk of being forced to take back a property that has been stripped, and/ or damaged with no recourse or income to show from the 3 year sale.

    To restrict a balloon mortgage to underserved areas is unfair lending practice as lending institutions do not retrict thier balloon mortgages to certain areas. To force a seller to be tied to a property for 30 years in itself will deter seller financing. To put seller lending restrictions within reason would offer some consumer protection, like a minimum 5 year balloon, caps on interest rates and fees. I think the ownis of prequalifying the buyer should be put on the buyer themselves. There are many organizations that offer free homebuying classes that would help them determine what a reasonable mortgage payment should be as well as other important details of homeownership. As with some of our buyer assistance programs in Chicago, the buyer seeing seller financing should be required to provide evidence to a seller that they have completed a home buying class.

    It is evident that this proposal is not thought out. It is clear that in reality, the Fed represents the BIG BANKS under the guise of protecting the consumer. While many consumers need protecting, the bottom line is the Fed wants to eliminate any competition for the big banks, including mortgage bankers, brokers, and seller lending. Independent university studies have show that accross the board, consumers got a better deal from Bankers and Brokers in both interest rate and closing fees. They don’t want sellers to offer mortgage lending as it is competition to the banks!

  34. W. J. Mencarow

    DOES THIS APPLY TO PRIVATE INDIVIDUALS?

    Someone just wrote to us (at The Paper Source) in response to this issue:

    “Regulation Z applies to chartered banks, not private individuals and their private transactions.

    No one has to worry about this.”

    Here is Ric Thom’s response:

    Title XIV of the Dodd-Frank Act amends the Truth-in-Lending Act. Qualified Mortgages in Title XIV is defined. It is considered to have met the Ability-To-Repay standard when it comes to seller financing according to the National Association of Realtors website under seller financing/Dodd Frank.

    In Title XIV seller financing is exempt as long as you don’t sell more than 3 properties in any 12 month period, but the seller must determine in good faith and document that the buyer has a reasonable ability to repay the loan. Both Qualified Mortgage and seller financing restrictions are under the same title. It exempts time-shares and reverse mortgages completely, but it only exempts seller financing under the above conditions.

    Until someone with authority can definitively say that the new proposed rule (ability-to repay) does not apply to seller financing and the buyer’ ability to repay, I have to assume that it does apply. If we do not make comments to the Federal Reserve, which will be passed on to CFPB, and it does apply we will have missed our opportunity to influence rulemaking. If it does not apply or they relax the rules and they inform us like they did after all of our comments on the SAFE Act, then Ma and Pa who sell their own property using seller financing will still be able to have seller financing as a viable option.

  35. • Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.
    • Homeowners are not bank officers or mortgage lenders. By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.

    • Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.

    • Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.

    • This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

    • By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.

    • The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. A five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.

    • There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy.

    • It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.

  36. It is difficult to add anything other than what has been said. I will try. Setting up complicated laws that extend far beyond the ‘buyer beware doctrine’ has tremendous flaws.

    The due diligence between 2 parties normally extends to the point where each does their best to protect their own interests. From the sellers’ side, this includes inquiries of the purchaser that the purchaser will be capable of paying the loan back. Copies of W-2’s, tax returns and personal references are usually appropriate. The buyer is responsible for protecting himself. The seller is not subject to any specific licensing at any government level to perform this transaction. This act extends a requirement that the seller take steps to protect the buyer from the buyer. The previous assertions above that this actually helps fraudulent buyers appears correct. That also appears to be an erroneous extension of the law.

  37. Jesse Shepeard

    Firstly, it sounds like another political ploy in favor of the conventional lenders to drive more business their way by eliminating the private sector if this law is passed.

    It is a bad idea to pass this law because the current big lenders are the true reason the American economy is doing so poorly. Private money is just that, private. Let it stay that way before all the talk of socialism becomes a reality.

    Sincerely,

    Jesse Shepeard, III

  38. Your proposal would almost totally eliminate one of the most likely sources for addressing the current real estate crisis and starting the recovery. I have bought and sold property for over 35 years using seller held financing. Thirty one years ago I started a business for buying seller held contracts bringing liquidity to the market of seller held financing. This was the 1980s and the real estate market was reeling then from the Savings and Loan Crisis (the cycle starts again) as well as dealing with bank financing with interest rates as high as 18 percent. Very few people could qualify for conventional financing and one of the very few ways for properties to sell was for a seller to carry back financing. The lack of “rules” benefited the buyer and the seller. It was seller held financing that eventually got the banks back into real estate lending because they eventually saw they were missing out on business.
    Now it appears they don’t want to compete, they just want to legislate their competition away. It wasn’t seller financing that got us into our current real estate disaster. It was the regulated lenders who were supposedly already under these rules that did not follow them and now we have our current crisis. Now the regulated lenders are taking lemons and turning it into lemonade. Instead of making them pay the price we let them use this proposed legislation to enlarge their monopoly. The amount of financing that is done with seller financing is minuscule compared to the big picture but in many depressed rural areas seller financing is the only source. What are both sellers and buyers going to do if they can’t meet these stringent regs and the institutional lenders are not willing to do the transaction?
    How can a common person be expected to qualify a potential buyer to the standards that you are proposing? These transactions are used very few times in one’s lifetime yet these rules would almost require a full time compliance officer to oversee things. That is not reasonable. Why does the government have to protect us from ourselves in every area of our lives? This is not an area of abuse. Regulate the predatory lenders but don’t eliminate the few ways for the individual seller and buyer who don’t fit the banking qualification mold to buy and sell property. What if I, as a borrower/buyer, don’t want to reveal every aspect of my personal financial status to someone I want to buy property from? You are trying to address a problem that does not exist. The banks just want to control every aspect of our financial lives.

  39. Eliminating seller financing would further hurt the economy. Any economist can see this.

  40. Don’t stop seller financing! Seller financing may be the last area were many people will be able to purchase a home, especially since the banks, who have been bailed out with taxpayer money, aren’t lending to the very people who bailed them out unless they have spotless credit.

  41. This is absurd. For over 35 years I have watched the government slowly but surely strip us of our rights. This march has cost all of us 10’s of millions of dollars and somehow has to be stopped.

  42. Wayne Clanton

    I am against some aspects of the forthcoming regulation regarding seller financing.

    1. Seller financing provides housing for millions who do not qualify for conventional loans. Banks won’t consider lending to someone with a credit score in the 400’s, 500’s, or lower 600’s, but why shouldn’t these people have an opportunity for home ownership. They must pay rent to live someplace, why can’t they buy a home through seller financing and have a home of their own instead of buying it for the landlord?
    2.What about small builders trying to sell a home in today’s economy by offering special financing they can’t get at the bank. Would it be better for the builder to default on his loan and let the home go back to the bank?
    3. The three year recission rule seems to go overboard. If I were to do seller financing for a home and the buyer decides after 2 years and 9 months that (s)he doesn’t want the home, or has little or no equity, they can rescind the sale and get all of their money back? Can they do this with the bank? What if we extend this rule to other areas: I buy a mower and decide after 2 years that it’s not working properly for me, I turn it in and get all of my money back; I hire an attorney for a case and after 2-1/2 years I decide they are working the way I would like, I fire them and get my money back.

    I don’t like what I see about the process and would hope that you will give more consideration to how it’s written and implemented.

    Please don’t enact something that will allow a number of “non-bank approved” people to be targeted and forced to relinquish their dream of “Home Ownership”. I want to see seller financing stay in place to continue helping those people that want their home but are not able to qualify for bank financing.

    Thank you.

  43. BRITTANY HATCHER

    THIS IS RIDICULOUS!! IF SELLER FINANCING GETS ELIMINATED THIS COULD POTENTIALLY DESTROY THE ECONOMY EVEN MORE. WHEN A AREA HAS TOO MANY EMPTY HOMES AND TOO MANY RENTERS IT JUST BRINGS THE VALUE DOWN OF THE AREA. EVERYONE DOESNT HAVE PERFECT CREDIT .PLEASE STOP THIS LAW!!!

  44. Our housing market is already in dire straights. Getting a loan is ridiculous today. I will give you an example. I am an investor; a legitimate investor who has been doing this for 14 years. The housing bubble burst of course hit me hard, but I revamped my whole busienss and am in a great position to thrive. I bought a home using hard money. My REAL DTI ration is 46%. My credit is in the 800s. The loan system is designed, however, to make sure I fail.

    This property I’m trying to refinance would cashflow over $700/month *IF* I could get out of the 14% hard money loan. What banks do to meet the over the top federal regulations designed to punish anyone who is an investor, is remove from $27800-6200 of my LEGITIMATE income and say I don’t meet DTI ratios. My attempt to bring in a cashflowing property to bring my business to success from marginally making it has failed due to conventional financing. There is NO REASON I should be denied a loan. I haven’t so much as made a late payment on anything for my 22 year credit history.

    I am being stereotyped along as a high credit risk and I can’t turn my business around without getting out of the hard money loan. The restrictions and ‘rules’ are already crazy. Seller financing has been one of the only things keeping me in business.

    Now, maybe the government HATES us investors, but we’re the ones taking the homes that are undesirable to retail buyers, fixing them up and making them desirable and putting them out there for people to live in; those vacant ugliness that start to take over.

    When so many people are flipped in their homes, seller financing is often one of the only options left. People will pay more for a home if they can get seller financing because regular regulations are designed now to only benefit someone who already has cash and doesn’t need the loan anyways.

    WHAT is the Fed THINKING? Our housing market is in a COMPLETE crisis, and they want to make it WORSE???? Don’t they realize the more difficult they make homeownership, the fewer buyers will be out there to buy homes? Or is this the plan of the government; to completely collapse our country? It certainly seems that way. Regulations are OUT OF CONTROL; people who have been diligent in seeing their way through the economic crisis are being punished right, left and center. Its your middle class entrepreneur you’ll affecting most; they can’t GET loans with the ‘conventional’ guidelines. They are the bread and butter of what makes this country great; STOP PUNISHING THE SMALL BUSINESS OWNERS!!! Its sickening!

  45. This proposal is absolutely ABSURD! The economy is really bad, the banks doesn’t lend any money to any body, the real estate market is horrible and the ONLY PEOPLE who make it happen now are seller-financing owners or real estate investors. If you do that, the real estate market will SUFFER even more and all real estate investors will lose their houses and opportunities.
    Are you serious? Who thought about that???? You give money and breaks to the banks, who keep the money for themselves and don’t give back to borrowers. Even great credit score were “messed up” by the bank who cancel and downsize credit lines, EVEN FOR GOOD payors who had over 750 credit score, they screw them up and their credit score is now below 650 because they cut their credit line.
    Seriously, that is unbelievable that someone EVEN think about that.
    Hope that proposition will NEVER PASS!

  46. STEPHEN SUMMERS

    THIS IS CRAZY. THE REAL ESTATE MAKET IS IN THE TANK AND EXPECTED TO FALL ANOTHER 20 % OR MORE THIS YEAR. GET THE GOVERNMENT OUT OF THE WAY AND LET THE AMERICAN PEOPLE WORK AND MAKE MONEY. THEN WE JUST MIGHT BE ABLE TO PAY OUR TAXES. HOW BAD WOULD THAT BE?

    IF THIS DOES PASS, THEN MILLIONS OF AMERICANS WILL NEVER BE ABLE TO OWN THEIR OWN HOME AND MILLIONS OF AMERICANS WILL NOT BE ABLE TO MAKE MONEY AND PAY THEIR TAXES.

  47. Owner financing is great. Any avenue that allows a person to own a home when otherwise that person would not own a home is good. Washington must not allow the small mom and pop financing to eliminated.

  48. Lester McKenzie

    Seller finacing is of great help to some people becaue thatis the only way they
    Can and will allow them to live the American dream,I find this crazy.

  49. Government is getting larger and larger and playing more of a roll in our daily lives. The lending of money between private parties needs to be an option for the average persone if they so chose.

    Homeowners are not bank officers or mortgage lenders. By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.

  50. Why don’t we just change the name of this country to USSA, United Socialist States of America?

    1. Good grief. This is anything but socialist — it’s corporatist. It is painfully obvious that this law will benefit mortgage originators at the expense of individuals. Please stop listening to Fox News, invest in a dictionary, and quit using the term “socialist” every time you don’t understand something. Just because Obama does not have white skin does not mean he is a “socialist.”

  51. I am including comments and would like to agree with all and add a few of my own.

    If it weren”t for seller financing I would not have owned my first home 45 years ago.

    I would not have been able to buy my first investment properties not would I have been able to pay the large tax bills to the Federal Government that I do today.

    Housing has always led this recovery from recessions in the past. It provides jobs that have been wiped out by Bank greed.

    The investment community could, if allowed thru proper regulation allow the acquisition with reasonable down payments and terms existing housing stock of standing inventory and place them in the rental pool A lot of sellers will simply lease them back if the ability to recover at some point their credit and home.

    Today I cannot qualify for secondary financing for my present residence at low rates and short terms because I own more that four properties. Insane! My credit is spotless!
    Rather that hamstring the people who are about correction, profit and ability to perform, take a look at the real problems. The Federal Government and Wall Street allowed their greed to over run good sense and are now further creating ways to slow recovery by over regulation. Please read below. I will not repeat the obvious.

    Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.

    · Homeowners are not bank officers or mortgage lenders. By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.

    · Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.

    · Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.

    · This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

    · By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.

    · The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. A five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.

    · There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy.

    · It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.

  52. Homeowners are not bank officers or mortgage lenders.  By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing.  Thus millions of people will be deprived of home ownership.• Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.• Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.• This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.• By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.• The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. A  five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.• There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy.• It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them

  53. I think the Federal Government and the Federal Reserve already have too much power. They shouldn’t be given any more. If they enact this new act, I think it will also take away options of the people to invest or own property. I also think the banks shouldn’t be given any advantage over the private sector.

  54. Whoever is selling this idea to the Federal Reserve sounds good in theory but in real life it’ll be a disaster.

    1. Raul,
      Nice thought, but I beg to differ. In my opinion even the Federal Reserve’s theory is wrong. I do agree that this bill will lead to disaster. Read Delbert Ashbury’s and Thomas’s comments below.

  55. Owner Financing has been around for centuries. Bank financing has only been around for a 100 years. In the 70’s women’s income was not considered for institutional financing unless you were a nurse or a teacher. Something definitely wrong here, with this new Dodd-Frank Act. Considering that Seller Financing has been around for as long as there has been money to lend; and since the Bank was part or mostly the blame for the crash, it would seen to me that bank financing should be illegal instead.

  56. Delbert Ashby

    Regulation Z; Truth in Lending [R-1417]
    Comments on the above proposed regulation

    Here are several reasons why the subject proposal should not be implemented:

    Banks are unwilling to make mortgage loans under $25,000. Their fees are too small to be profitable on these small loans. There are many towns in America where perfectly acceptable individual family homes exist, which are suitable for retirees and small families. I know because my parents lived in such homes in Roswell, NM. and other cities. I have also owned such homes. Without owner financing, these homes become un-saleable and are removed from the marketplace of available housing.. You might as well burn them.

    People who take older homes, which are in bad repair, and bring them up to good standards, thereby returning housing to the marketplace, depend on owner financing to acquire those properties. Banks won’t generally lend on those un-rehabbed properties.

    These are but two of many examples demonstrating the fact that banks can’t or won’t always meet the needs of the marketplace but owner financing can. Owner financing has never been considered a lending activity by most states or other authorities. It is simply the transfer of private property with deferred payment for that property.

    Most importantly, you are crippling the wrong people in an effort to solve a problem for which they are not responsible. This proposal does not provide the real solution. Let me explain further.

    The private, owner financing marketplace has existed for over 60 years that I am personally familiar with. There was never an issue until these instruments began to be securitized and sold to the public by Wall Street firms. It was the practices used in that process which caused the downfall. When a portfolio was established, it was common practice to throw a few bad ones into the portfolio just to get rid of them. Who would ever notice with the poor, undocumented approaches used by the portfolio securitizers? When that worked, well, throw in even more and don’t worry about the documentation. History has shown this to be true.

    It was these reckless, greedy, easy approaches that wrecked the whole process.
    I can cite so much more but will simply now ask you to not implement the proposed regulatory changes. Do not damage innocent people when the solution lies elsewhere.

    Respectfully submitted,

    Delbert M. Ashby

  57. “Moreover, it would allow a buyer a three year right of rescission (they can cancel the sale) if the seller did not properly qualify them. The right of rescission also applies to anyone who buys the note.”

    FYI…
    Regulation Z
    Sec. 226.23 Right of rescission.
    (f) Exempt transactions. The right to rescind does not apply to the following:
    (1) A residential mortgage transaction.

    http://www.bankersonline.com/regs/226/226-23.html

  58. Horacio Herrera

    When will this stop??

    Panic and ill thought out plans will only serve to deter better ways to soften the eventual blow of this financial crises.

    It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.

  59. If you will read the post above, you will see that residential mortgage transactions are exempt from the 3 year rescission rule.

  60. There are many people in the U.S. that want home ownership, but cannot qualify for standard institutional financing, either due to the low value of the property, or their credit history, or other reasons. Since banks cannot step in and help these people, other Americans should be able to meet that need. It is imperative that the U.S. Government allow Americans to continue to help each other – and helping someone purchase their own home seems fundamental to the core values our country was founded upon.

  61. Please can you use a different conference line in the future? I tried both from my cell phone and my MagicJack and neither would connect to the conference. FreeConferenceCall.com is free and works with MagicJack and cell.

    1. W. J. Mencarow

      We use freeconferencecall.com. But they had a problem with the phone number they gave me (and I had given to everyone) just as we were to begin the teleseminar. They gave me another number and access code, and I immediately emailed that to everyone. I’m sorry if you did not receive that. However, the audio of the teleseminar will be posted, hopefully later today (Wed.).

  62. Anthony Garcia

    If this rule is approved, it will be the end of private property rights in America.
    We might as well change the name of the US to USSR. United States Socialist Republc.
    Thanks.

  63. Seller Financing ( aka owner carryback, seller carryback, seller installment sale) is vital to our economy. It allows a buyer and seller to get together privately and work out the terms of a sale. The buyer wants to buy. The seller wants to sell. No one is looking over their shoulder and coercing the parties to do anything against their will. This is American free enterprise at work.

    In the horrible housing crisis we have endured the last few years, people who wanted to buy a home, but were denied conventional financing from their bank, turned to the seller of the home they wanted. And since the bank and government said “No”, guess what happened? The seller said ‘Yes, I will agree to terms with you.” The result? Commerce was done. A family was able to buy a home. This, in spite of the bank’s refusal to do so.

    In this circumstance, it is vital for our economy and our housing industry to get a positive charge from sellers and buyers being able to negotiate of their own free will. This is the American spirit. Why would anyone knowingly want to deprive all of us of this freedom?

    This is exactly the consequence of Section 129, Ability to Repay Amendment of the Dodd-Frank Act. As YOU read this, YOU, as a consumer, would be denied the right to sit down and negotiate with ME, another consumer, on the sale of YOUR home. YOU have to act like a banker, and request documents from me that will raise your comfort zone in selling to me. YOU can only offer ME terms that are more restrictive than the community bank in YOUR town. YOU have to wait 30 years to get YOUR money back. The bank can get theirs in 5 years. Who has the greater risk here – YOU or your local bank? Why would the government favor the local bank over YOU and ME as consumers? Does this make sense to YOU? It makes no sense to ME !

    Plus, if I don’t like the way YOU handled our transaction, I have 3 years to come back at YOU and sue YOU. This is nice. We have taken a transaction that people have used for decades and set up government rules that invite unethical people to take advantage of. Makes no sense.

    Please get rid of Section 129. Please recognize that seller carryback creates a void when conventional financing is not available. Please understand that seller carryback transactions allow people to buy and sell properties in the most difficult of times. Why would the government equate this transaction to predatory lending? Why equate this transaction to an institutional, bank transaction? They are different.

    Please make the Abilty to Repay Provision totally NON-APPLICABLE to seller carryback.

    Thank you.

    Denny Stanz
    California NoteBuyer LLC
    Denny Stanz

  64. I sure hope the comments above made it to the appropriate authorities (and don’t just appear here on this site) at:

    http://www.federalreserve.gov/generalinfo/foia/ElectronicCommentForm.cfm?doc_id=R-1417&doc_ver=1&name=Regulation%20Z;%20Truth%20in%20Lending&date=20110419a

    Would it do some good if we called in to a national radio show host (Rush, Levine) to get the message out nationwide? I believe that forum would reach the Ma and Pas who most likely have not heard about this rule. We need to act fast of course…

  65. bob cristaldi

    Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.

    · Homeowners are not bank officers or mortgage lenders. By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.

    · Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.

    · Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.

    · This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

    · By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.

    · The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. A five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.

    · There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy.

    · It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.

  66. People it’s time to WAKE UP and push to have the Federal Reserve closed down.
    It’s obvious our elected officials are sleeping on the job. To allow this President to create so much regulation blows my mind. Don’t they realize they too have to deal with these issues?

    People need to stand up and make a point that it cannot be one sided. We are being held captive and extorted by their action.

    We cannot allow this President to be elected AGAIN. He is selling out this COUNTRY. Everyone is afraid to approach him because he’s BLACK. Bull Shit…

    The blacks in this COUNTRY need to wake up and see not what Color he is but what he’s doing to harm this country. Step aside and look at all the past presidents and compare their regulation with this President.

    PEOPLE WAKE UP…you are not what you think you ARE… check out H.J.R. 192 this will open your eyes. Check it out here: http://www.truthsetsusfree.com/HJR192.htm

    As for my point on this ruling. It’s WRONG… it’s another way for them to control the people. I wonder who’s behind this; could it be the Board of Realtors as a lobbyist?
    It’s your home, not there’s when they start telling you what you can and cannot do with your property then it’s time we take to the streets.

    I’m sorry I cannot mention here what I think we should do to these idiots.
    Maybe it’s time we all file Land Patens on our property and when they come on the property have them arrested. Maybe We the PEOPL E need to file a restraining order on these people for FEAR they are creating HARM to us.

    I’m working with a few people that have a process to help People ELIMINATE their MORTGAGES with getting their HOMES FREE and CLEAR. It doesn’t matter if your CURRENT or UPSIDE DOWN or in FORECLOSURE. The Fact is they never borrowed you any money. They made it look like they gave you money. That is how they TRICKED us.

    What amazes me is how many people stick their head in the sand when this is an OPPORTUNITY of a LIFE TIME.

    I know this is hard for many of you to understand… think of it this way… let’s say you gave me $ 100,000.00 and I then turned around and gave you a LOAN for $ 100,000.00 but I kept your $ 100,000.00 would that be fair? NO…

    This just shows me how passive the American People have come. When I show 10 people the facts and 10 people do nothing what does that tell you about these people, about America.

    People need to learn to take action and one way of protecting what is theirs could be with filing a Land Paten on their property.

    Bottom line PEOPLE you NEVER HAD A LOAN. They lied to you. So why worry about seller financing when the Fraud started with the Loan, Lack of Full Disclosure, Counterfeiting on their part, Breaking Contract Law, they have NO LEGAL STANDING to FORECLOSE PERIOD….

    You can learn more here on how the Federal Reserve was established. Did you know it’s privatly OWNED? Did you know they decieved the Tax Payers and our Government?

    Maybe it’s time We push to ABOLISH the Federal Reserve.. check it out here; http://video.google.com/videoplay?docid=-8484911570371055528#

    If EVERYONE STOOD TOGETHER ON THIS ONE ISSUE and FAUGHT there BOGUS LOAN. WE THE PEOPLE WOULD OWN OUR HOMES FREE AND CLEAR. THERE ARE NOT ENOUGH OF THEM TO CONTROL US. WAKE UP AND SEE THAT.

    When it’s one or two people trying to fight to keep their homes they can walk all over them because there are not ENOUGH of US that have WAKEN UP TO WHAT IS GOING ON.

    But if there’s Thousands of us, Tens of Thousands of us, Hundreds of Thousands of us FIGHTING FOR ONE PURPOSE… how can they ignore this, how can the corrupt Judges Ignore this, the corrupt attorneys ignore this, how can the Sherriff of each county ignore this.

    They CAN’T… Because once WE WAKE UP to FIGHT they know we have the POWER.
    Check out Richard Marc… Did you know the Sheriff in each COUNTY has the power with the Oath he or she took to STOP all of this FRAUD… even this BILL? Sheriff Mack Web site; http://www.sheriffmack.com also watch this video; http://www.youtube.com/watch?v=bLJgPuNAh60

    Where the F… are these elected officials that we hired to protect our Bill of Rights and to stand up for the Constitution that are Fore Fathers created for THE PEOPLE.
    I’m sorry to rant and rave here. But the issue is not this BILL. The issue is what We the PEOPLE are ALLOWING THEM to do TO US.

    Correct that and there is NO PROBLEMS… J.F. Kennedy once Said ” Ask not what your County can do for you, but what you can do for your COUNTRY”

    Maybe it’s TIME WE TURN TO EACH OTHER and ASK that question of each other. What are WE DOING to take back this COUNTRY?

    Its obvious are leaders are not doing what’s right for US. They have the money to control these people. But we have the POWER to take them OVER.

    It’s time WE WAKE UP. It’s time we take ACTION.

    You can start by taking action by sending the U-Tube Video to your local Sheriff here it is again, put this link in your e-mail and send it to your Sheriff. Then follow up to see if he or she is going to up keep his oath and protect us the PEOPLE.

    If nothing gets done then audio tape or visit the sheriff and video tape and then post it on Social Sites and U-Tube..

    Here are more links to watch on the FRAUD….

    http://www.sheriffmack.com/index.php/books-by-richard-mack
    http://www.youtube.com/watch?v=bLJgPuNAh60
    http://www.youtube.com/watch?v=L-JQeqTXYu8&feature=related
    http://www.youtube.com/watch?v=QiBcC8_goVg&feature=related
    http://www.youtube.com/watch?v=7nfVjgp7OYE&feature=related
    http://www.youtube.com/watch?v=SzaLP9dTXhE&feature=related
    Please review this link as well > http://ricoforsheriff.com

  67. This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

  68. How can we the people stop these corrupt politicians from their greed and self righteous attitude.

    We don’t work for them they are supposed to be working for us. When did this all change??

    This latest bill on the debt ceiling is a good place to start. Where have all the Billions of Dollars gone that went to bailing out the banks?? As far as I hear from different sources it has all been paid back.. So where is it….???
    This is not a good thing when the Government audits itself, who is accountable??? Who double checks their Audit??? It is like putting the Fox in the Hen House, he will never go hungry because it is free.

    In the mean time people on fixed incomes and the military personnel have to go without any pay,so the Politicians can argue with each other about cutting spending to pay what is owed to the people.

    SOMETHING IS DEFINITELY WRONG WITH OUR CURRENT SYSTEM.

    REMEMBER OUR HISTORY , “TAXATION WITHOUT REPRESENTATION” WELL WE HAVE IT AGAIN, THIS TIME IT IS WITH OUR OWN LEADERS……
    Attorneys will be attorneys, they have placed themselves above the law and can literally get away with what ever they want…

    ENOUGH IS ENOUGH….

  69. Michael Hanna

    This is more intrusion by government….if this goes into effect foreclosed and unsold real property will tank! Hard money lenders serve to provide real estate loans to people who can’t get a loan from a conventional lender. A few years ago anyone could get a real estate loan, today only borrowers with verificable incomes can, and only those with impeccable credit. Private lenders provide loans to people who are “unqualified” by commerical lending standards. If private lending is foreced to comply with the same rules as commerical lenders, then the real estate market will be depressed for a decade.

  70. HECTOR A ISOLA

    CURTAILING THE INDIVIDUAL FREEDOM BY ENACTMENT REGULATION THAT WILL ADVERSELY AFFECT ANY ONE OWNS DECISION HOW TO NEGOTIATE HIS OR HER OWN FINANCIAL ACTS HAS NOT PLACE IN AMERICA AND WILL NOT BE ALLOW TO HAPPEN TO PRESERVE THE FUNDAMENTAL RIGHTS OF FREE COMMERCE, WE MUST ACT NOW OR RESIGN FOR EVER TO CONTINUE TO ERODING THE ALREADY OVERRULED CONDITION THAT ARE PRESENTLY AFFECTING US ALL !

  71. We really need to clean house in D.C. And shut down a lot of these regulatory bodies.

    We have people who have no knowledge of lending or selling or seller financing making rules and regulations. That’s like going to a plumber to have heart surgery.

    The feds seem bound and determined to paralyze this country into oblivion. What other bright ideas will they come up with to absolutely destroy the economy?

    They are creating a country where only the wealthy will own anything. And the average person seems willing to let it happen.

    My parents bought with seller financing and would never have owned a home without it. They were honest, hardworking folks who paid that mortgage on the dot every month and were proud to be homeowners. They died in that house. How many of us will die in a rental that makes someone else rich while we have no rights?

  72. Michelle Hyatt

    YOU SIr are committing treason against our Constitution! You cannot lawfully take away the right to contract.
    Seriously? More is better? If you really believe that giving banks more power to screw things up worse than they already have then you have now revealed your hand in who is paying for your votes! Banks! Let me remind you that it was not the private sellers carrying notes that screwed our mortgage system up but the “Banksters” who were lending bad loans, falsifying and qualifying people who could not afford the homes. then turn around and sell that same note 5 times in the same day only to foreclose and own it again! Perpetrating FRAUD! Is that what you really support?
    Aside from that, we are still in America are we not? YOU SIr are committing treason against our Constitution! You cannot lawfully take away the right to contract.
    We still have our unalienable Rights! We have the right to private contract in every aspect of our lives! Real Estate too! Read the constitution!
    If you pass this bill I can almost guarantee with certainty you will not hold office again here in these UNITED STATES! Your names will be remembered and it will not be in the kind of remembrance you seek. It would be a kind of political death. Is that really what you want? Please think clearly before you act as all eyes will be on this bill. You have an opportunity to say No to those who would like to strip away the rights of those who vote! You could be the Hero in this and not the Villain. Please make the stand that would support your constituents in their right to contract.

  73. Please, do not further strangle US citizens from selling their homes by restricting “seller financing!”

    People in this nation are suffering and desperate. How can it be that any person who owns something cannot be free to sell it? It will ruin people. There are too few qualified buyers now and not only will it prevent people who want a home from having one, it will harm those who need to sell.

    This is supposed to be a free country. I’m starting to say Bah to that. Why is government encroaching on us to the point we can’t control our own lives, or even afford the most basic needs. This is not America the free and land of opportunity I grew up in.

  74. It is totally nuts to enact such a restrictive set of rules which would be applicable to seller financing. This is basically the only option available for many buyers and sellers to conclude a transaction in an environment extremely restrictive for obtaining standard lenders’ financing. Seller financing had nothing to do with the mortgage -related financial crisis. This is an absolute act of over-reaching and over-regulating the wrong segment of property funding: regulate more tightly the banks and traditional mortgage lenders.

  75. seller financing is a very good way to provide houses for million people that otherwise will not qualify to buy a house. It will help to increase American dream and pride of ownership. It will help to stabilize the housing mess.

  76. If this is adopted into law, we will see the real estate industry belly up like we have never seem before! What are these guys thinking about? Fix the real problem in this industry and here’s a hint, it wasn’t seller financing! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get relief by reaching a private arrangement with a seller to offer them some form of private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing. When you see more homeowner walking away from there home because this law is in effect this economy will not recover any time soon.

  77. “I am writing to request that you make an exception for owner-financed transactions! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get relief by reaching a private arrangement with a seller to offer them some form of private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing methodology.

    Private sellers are in no position to comply with a 169 page set of rules and regulations in order to offer such financing and should not have to understand and comply with those rules unless they are in the business of providing such loans as shown by more than three transactions a year. These proposed rules as applied to seller financed transactions solve a non-existent problem and will lock consumers who do not have stellar credit out of the housing market – maybe permanently. Seller-financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people.”

  78. I am writing to request that you make an exception for owner-financed transactions! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get relief by reaching a private arrangement with a seller to offer them some form of private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing methodology.

    Private sellers are in no position to comply with a 169 page set of rules and regulations in order to offer such financing and should not have to understand and comply with those rules unless they are in the business of providing such loans as shown by more than three transactions a year. These proposed rules as applied to seller financed transactions solve a non-existent problem and will lock consumers who do not have stellar credit out of the housing market – maybe permanently. Seller-financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people.

  79. I have my right to sell my own house, to loan my own money to people who need it. I am not acting as a bank, just dealing with my own property(ies). Why I have to comply with all those rules with my own money and assets? Does not make sense to me.

  80. Make an exception for owner-financed transactions! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few benefit from private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing.

    These proposed rules as applied to seller financed transactions solve a non-existent problem. Seller-financed deals had nothing to do with the current lending crisis and no rule is needed to control them. Draconian penalties for seller financing, will further hurt American home sellers and home buyers.

  81. NO.1 EXEMPT SELLER INSTALLMENT SALES FROM THE RULES. NO.2 ABOLISH THE FEDERAL RESERVE . NO.3 WHAT THE HELL ARE YOU CONGRESS PEOPLE THINKING, WE IN THIS COUNTRY ARE SICK OF YOUR INCOMPETENCE. GET A GRIP BEFORE YOU RUIN THIS COUNTRY FOR GOOD.

  82. “I am writing to request that you make an exception for owner-financed transactions! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get releif by reaching a private arrangement with a seller to offer them some form of private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing methodology.

    Private sellers are in no position to comply with a 169 page set of rules and regulations in order to offer such financing and should not have to understand and comply with those rules unless they are in the business of providing such loans as shown by more than three transactions a year. These proposed rules as applied to seller financed transactions solve a non-existent problem and will lock consumers who do not have stellar credit out of the housing market – maybe permanently. Seller-financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people.”

  83. People need a place to live, whether its an apartment they rent or house they are looking to purchase.
    Seller financing is a great option for sellers trying to find a buyer.
    Its great for a buyer who has no credit / having difficulty in getting a loan.
    It gives the buyer an opportunity to purchase a property, even with bad credit history (that is the seller’s risk) If a person who lives in an apartment cannot pay rent, they get evicted. If a person cannot pay the seller financed mortgage, the seller has the option of foreclosure or try to work with the buyer. The result is the same for delinquency. But the seller financed borrower can sell the property in the future and has equity. The apartment dweller does not.

    With the government making seller financing illegal, less homes will be sold, less people will have the ability to purchase a home. If the seller has a job relocation, what happens to the house? vacancy? Does the government want more vacancies and no real estate taxes paid? Or does the government want to support economy by allowing struggling people the chance to be able to stand on their own feet?

    I have found a lot of laws to be “government protected interests”. Example, each state has immunity laws for government employee wrong doings. In the name of the law, law enforcement can enter any premises, commit crime (such as theft) and the public are unable to fight back. I know because I am a victim of government employees’ crime. I tried to file a complaint with various agencies, FBI, state victim assistance, state’s attorney office, local police department. They ALL REFUSED TO INVESTIGATE GOVERNMENT (POLICE DEPT) CRIMES! Tried to hire lawyers, as soon as they cashed the check for security deposit (ranging from $1,000 to $1500), I was informed they cannot represent me. This happened at least 3 times. Later on, I discovered government employees have immunity against lawsuits. In another situation, they actually killed my daughter’s unborn child by inducing so much stress.
    They even partner up with (mentally ill) psychiatrists who diagnose using games and provide public with drugs that cause brain damage. Despite numerous reports, they refuse to listen and keep on doing the same thing to other families. This is the way they keep themselves employed.

  84. If the seller owns the home, they should be able to sell the home under any terms or conditions are that acceptable to them and the buyer. Are you next going to regulate how we can sell our cars?

    Sellers should not need to comply with 169 pages of ridiculous rules and regulations when they are not a part of the banking problem but rather have offered solutions to selling and solutions to buying when a trillion dollar industry was left unable to figure it out.

  85. “I request you make an exception for owner-financed transactions! I support Buyers and Sellers being free to make non-traditional arrangements to buy, sell and finance real estate. Many people can’t get traditional financing today and some get relief by making a private deal with a seller to offer them private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing method like a subject to mortgage sale.

    Private sellers should not have to understand and comply with rules unless they are in the business of providing such loans as shown by more than three transactions a year. These proposed rules as applied to seller financed transactions solve a non-existent problem and will lock consumers who do not have perfect credit out of the housing market – maybe permanently. Seller-financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people.”

  86. Ellen Pollock

    Please do not enact the rules in the Dodd-Frank Act for more stringency in seller financing. The proposed amendment will effectively eliminate the ability for sellers and buyers to use seller financing as a tool for real estate transactions.
    In today’s lending environment, and with our streets dotted with vacant houses, seller financing is one of the tools that can allow real estate transactions to occur. It is one tool that we do have to keep our cities and towns intact. It helps strengthen our economy, the safety of our cities and towns, and the whole character of our country. I urge you to keep seller financing as an option.

  87. In the early 80s when interest rates were 17-18% my parents were able to buy a house at 13% and save money to buy the house they wanted to. The Seller made very good interest on the property he sold for 15 years. Seller Financing can help every one– Buyers and sellers.

    I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get relief by reaching a private arrangement with a seller to offer them some form of private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing methodology.

    Private sellers are in no position to comply with a 169 page set of rules and regulations in order to offer such financing and should not have to understand and comply with those rules unless they are in the business of providing such loans as shown by more than three transactions a year. These proposed rules as applied to seller financed transactions solve a non-existent problem and will lock consumers who do not have stellar credit out of the housing market – maybe permanently. Seller-financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people.

  88. Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.
    Homeowners are not bank officers or mortgage lenders. By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.
    Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.
    Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.
    This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.
    By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.
    The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. A five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.
    There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy.
    It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.

  89. Carmen Carter

    Please let seller financing stay just like it is. In the real world and in the real estate realm this helps millions of people buy homes, especially those that wouldn’t qualify for loans in the typical banking arena whatsoever. Federal reserve let it be. Stop trying to kill a good thing for the American people.

  90. James A Hayes

    How dare you come about.to tell me I could not sell my home the way I would like to. No one and I mean NO ONE offered to buy my home for me. I was the one who took a loan for what will probably be for the rest of my life. I am the one who has to clean it and take care of it. Then you are going to tell ME how I can sell it? You The Congress and the Senators can’t even agree how to fix the problems YOU WERE ELECTED to fix. Get your head out of your ass and DO THE RIGHT THING!!!!!

    Give the banks back their money and you won’t feel so guilty (not that you do feel guilty) and maybe some really good laws can.

    Remember the banks are the reason we are in the sad positon we have been in for the last 2 – 3 years.

  91. In the process of inacting legislation, members of congress
    should keep in mind that we are suppose to be living in a free
    country. That means that government is not being responible
    when imposing or inacting regulations on the individual to
    benifit the orgonizations just because they have your ear
    through the lobby system.
    Indivduals should have the right to sell and buy property
    without being harrased by government.

    Lending institutions have proven they can’t be depended on
    to act responsibly. The last few years should be enough
    to convence anyone they should not be given anymore
    favors to use against the individual.

    They lobbied for years to get relief from regulations, now
    they are trying to impose regulations against the individual.

    Don’t do it!

  92. kenneth joswick

    please stop this rule and law you idiots are proposing by taking away the human rights of free enterprize and the freedom of to do what we want with our american property.

    whats in it for you and you make no sence,

    stop it now before you kill this country.

    whose linning your pockets now
    do you folks think we are that stupid

    kill this proposed law.

    kenneth r joswick
    voter

  93. “I am writing to request that you make an exception for owner-financed transactions! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get relief by reaching a private arrangement with a seller to offer them some form of private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing methodology.

    Private sellers are in no position to comply with a 169 page set of rules and regulations in order to offer such financing and should not have to understand and comply with those rules unless they are in the business of providing such loans as shown by more than three transactions a year. These proposed rules as applied to seller financed transactions solve a non-existent problem and will lock consumers who do not have stellar credit out of the housing market – maybe permanently. Seller-financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people.”

  94. The proposed financing rules go too far in regulating the finance industry, and particularly in the way private owner financing would be affected. It is unrealistic to expect private owners to become expert in hundreds of pages of rules that are meant to regulate the banking industry.

    The recession has left millions of responsible Americans without the ability to get a mortgage under the tight federal guidelines in the Dodd-Frank Act. Owner financing through installment loans, lease option, and related private agreements between owners and buyers will be severely restricted if applied to the same tight credit rules as federally regulated banks and mortgage companies. The decision as to whether the buyer is qualified to pay under the terms of a private contract with a seller should be left to that seller. Private financing was not part of the lending problems that led to the housing bust of 2008 and private sellers and their buyers should not be penalized for the issues that affected major consumer lenders.

    Without the means to negotiate with private sellers hundreds of thousands, if not millions, of otherwise qualified buyers will be locked out of the housing market because of recession impacts that were beyond their control, and the housing industry will continue to strangle as a result of overly restrictive regulation.

    I ask the Federal Reserve Board to put in place an exception in the Dodd-Frank banking regulations that will exempt private owner financing from the rules.

    Elizabeth D. Nichols
    RE Advantage LLC

  95. Government going crazy again regarding seller finance of real estate. There should be absolutly no government involvement between individuals regarding the sale of a property and they shouls be able to make a non-traditional arrangements to buy and sell and finance real estate. Buyers and sellers are being locked out by the traditional banks because of their stupid greed that has put the USA in financial problems.

    The only possible way left to many in this glut of REO’s is to reach a private arrangement in the form of a private mortgage,lease option or some other non-traditional financing.

    Private sellers are in no position to comply with a 169 page set of rules and regulations in order to offer such financing and should not have to understand and comply with those rules unless they are in the business of providing such loans as shown by more than three transactions a year.

    These proposed rules as applied to seller financed transactions solve a non-existent problem and will lock consumers who do not have stellar credit out of the housing market – maybe permanently.

    Seller-financed deals had nothing to do with the current lending crisis or financing melt-down that the banks created and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people

  96. Radha Aragona

    “I am writing to request that you make an exception for owner-financed transactions! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get releif by reaching a private arrangement with a seller to offer them some form of private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing methodology.

    Private sellers are in no position to comply with a 169 page set of rules and regulations in order to offer such financing and should not have to understand and comply with those rules unless they are in the business of providing such loans as shown by more than three transactions a year. These proposed rules as applied to seller financed transactions solve a non-existent problem and will lock consumers who do not have stellar credit out of the housing market – maybe permanently. Seller-financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people.”

  97. “I am writing to request that you make an exception for owner-financed transactions! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get releif by reaching a private arrangement with a seller to offer them some form of private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing methodology.

    Private sellers are in no position to comply with a 169 page set of rules and regulations in order to offer such financing and should not have to understand and comply with those rules unless they are in the business of providing such loans as shown by more than three transactions a year. These proposed rules as applied to seller financed transactions solve a non-existent problem and will lock consumers who do not have stellar credit out of the housing market – maybe permanently. Seller-financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people.”

    Stay out of our business!

  98. I am against any form of restricting private individuals or institutions of any kind to buy or sell, lend funds for any form of real estate. Talk about a big socialist move.You would destroy the back bone of this country. The economy is bad now, you will destroy it. The federal reserve should be abolished. Most people don’t know it is a private institution NOT OWNED BY THE GOVERNMENT.
    Straighten the federal reserve out and half of our problems would be solved.

  99. It’s only reasonable to make an exception for owner-financed transactions! IBuyers and Sellers should be free to make whatever financial arrangements they wish to sell or buy their own property. Private financing is a boon to many: not only those trying to acquire a house, but for those that need to sell their home. The deal could be a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing.

    Responsibility for the current lending crisis should be placed where it belongs and not on the backs of sellers willing to finance their own deals and who had nothing to do with the financing melt-down. These are private arrangements between private parties and it’s ridiculous to require them to comply with miles of red tape that only strangle private enterprise.

  100. Seller Financing is the only way to a real estate rebound. The only possible reason for this law is that the government is only concerned with pleasing big banks and definitely not concerned for the people. I’ve been a full-time real estate investor for almost 10 years. This would put me out of business for good. Isn’t small business the back-bone of our US economy? Big banks and government got us in to this economic mess. This new bill will certainly keep us in this mess. This bill kills real estate entrepreneurs and further damages the real estate rebound. This is short-sighted and reactionary. Please do not allow this to pass.

  101. Allow us to continue to be able to seller finance! The real estate market is bad enough as it is without it being crippled even more by further hampering a seller’s ability to get their house sold without getting foreclosed on. Our houses are just that- OUR houses. Not yours. Not the banks. They are OURS. Leave us alone.

  102. I believe that people should have the right to sell their own property at their own terms. Private sellers should not be held to the same rules as banks & lending institutions. It will further cripple the housing market and the economy in general. Seller financing encourages growth … why regulate a non-existent “problem?”

  103. The need to control everything in life is getting out of hand and taking away the free enterprise and the ability for people to solve solutions. This is unacceptable!!

    -David

  104. “I am writing to request that you make an exception for owner-financed transactions! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get releif by reaching a private arrangement with a seller to offer them some form of private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing methodology.

  105. Let me understand this. The government was backing loans with our tax dollars that were given to people everyone new couldn’t pay them back, and now they don’t want me as an individual to make a loan to another individual for a property that I own, with me taking the risk, backed by no one but myself.

    Only the government and the banks should be held to these rules as long as they’re being insured by the tax payers.

    I thought we lived in a free country.
    Looks like it’s time to join the Tea Party.

  106. Louise DiSclafani

    I am writing to request that you make an exception for owner-financed transactions! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get relief by reaching a private arrangement with a seller to offer them some form of private financing.

    Private sellers should not have to understand and comply with those rules unless they are in the business of providing such far as seller financed transactions go solve a non-existent problem and will lock consumers who do not have stellar credit out of the housing market. Seller-financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who should be able to take advantage of a variety of financial arrangements.

  107. I think that the Government is over stepping it’s boundary. Keep in mind what caused the mess we’re in today is the BANKS and not the investors. If the Government truly is trying to solve the problem it must allow investors to participate. Without the investors the housing market only get’s worse with the foreclosures that are still scheduled to be forclosed.

    The 20% that can qualify for a mortgage through traditional measures already have one and will only be trading up if they choose to purchase. This will leave the other houses on the market for vandalism and destroy neighborhoods.

    It’s a no brainer that investors should be allowed to assist in getting America back on track. Without their assistance America’s future is (??????).

    I pray someone that’s making the decision have some sense and act according to what America need.

    Otherwise

    GOD HELP AMERICA!!!

  108. Stokes Gatewood

    Haven’t you –(The Federal Govt. — Banks — Lenders & Wall Street)- done enough to basically obliterate the Real Estate Industry?? Is it just one more nail in the coffin for the regulators?? ENOUGH–PERIOD!! Keep your filthy-greedy hands off the seller financing for those of us left–to be able to participate & invest in a basic–“Mom & Pop” business of financing Real Estate purchases –to those less fortunate or unable to get “conventional bank loans” & let us take on some of the risk!! The Mortgage industry & the Federal Govt. has shown us what they can do with the overall Real Estate Market—-Kill it in a matter of a few years!! Take out–repeal–or whatever you need to do to free up the consumer & those of us who try to run legitimate small businesses–repeal the process & again allow the “Mom & Pop” business the right to do business w/out burdensome rules & regulations that all but -shut down further -the improvement of the Real Estate Industry!

  109. This is a serious issue in regards to hard working american people and unfortunetly they may not realize it till it’s too late. Let’s hope that if enacted, we’ll all band together to get the people responsible out of office.

    I do believe if thought through by the powers to be, level heads will prevail. Many times our lawmakers decisions just have unintended consequences. I hope they see the consequences before anything is passed.

  110. Why is the government trying to kill the already sick real estate market. It was not small real estate investers that caused the systemic failures in the mortgage market. Seller financing is a tool that benefits both the seller and the buyer. Many people who have bad credit will be pushed out of the market. It seems to me the government is over stepping yet again.

  111. Private seller have the right of making decision for their financial. Government should not interfere into their personal decision.

  112. Diana Marshall

    The proposed regulation is going too far, it will stifle the market and eliminate the people’s freedom of choice in a capitalistic economy. Seller financing is a very important financing option for millions of Americans. Let us have choices !

  113. Barron Williams

    I am against any provision that eliminates and/or adversely impacts seller financing. The US Congress is inadvertently causing harm to the real estate industry and to the recovery of the larger economy. Lending standards are so high now that the majority of potential homeowners cannot qualify for a traditional loan. As an investor we are providing a profound viable option to allow people to purchase a home. In turn we are putting people to work renovating houses and paying other people for their services, including real estate attorneys, appraisers, home inspectors, realtors and others. Seller financing is helping our economy to recover. Without it they are undermining the economic recovery.

  114. Stokes Gatewood

    A response to Nate–Better sign up for the Tea Party or whomever!!– ASAP!!! I hope anyone who reads this will vote in the next election & vote for any candidate that will insure that Obama stays a “ONE TERM PRESIDENT!”—-AMERICA– cannot afford another 4-yrs with this shyster & his band of Czars!!! This is not Russia –yet–& I for one–resent his style of governing & having the audacity to name his cabinet members–Czars!! This is just one of the many “little things” that we have allowed him to “Slip over” on the American Public & most have just shrugged their shoulders & said–“What can I do?? I’m only one person!!” Well–next election is a GREAT Time –to show yourself & elect someone who gives a Darn about AMERICA–Our values–OUR CONSTITUTION–& our basic way of life & the FREEDOMS our country (& Military) have fought for –over our history!! I’m off my “Soapbox” -now–but I hope you will find the courage & effort to get back on your own “Soapbox” -come election time & make a “change” for the betterment of our Country & not just the advancement of a political agenda & party!

  115. Please vote this down! People need to have choices especially in this economy and banking situation. I would not have able to buy my home if I did not get seller financing! Keep me posted on what happens and what I can do. Thanks!

  116. LESTER McKENZIE

    Why would the congress want to eliminate seller financing ,with professionals that displays honesty and dignity to their clients of the highest of level and work in order to their benifits.
    I hope they will see there is no need for this change.

  117. Mehran Aminzadeh

    July 22, 2011

    The Dodd-Frank Act does not exempt property owners who wish to use seller financing (installment sale) even though no money is lent, there is no table funding, and under the Truth and Lending Act they are not considered creditors. The Dodd-Frank Act (ACT) does exempt property owners who offer seller financing from having to become Mortgage Loan Originators (MLO) provided they only sell 3 properties or less in a 12 month period and they follow the restrictions below. Yet, the Act subjects the property owner to the same liability as an MLO:

    Title XIV Section 1401 (2) (E)

    1. The seller did not construct the home to which the financing is being applied.
    2. The loan is fully amortizing (no balloon mortgages allowed).
    3. The seller determines in good faith and documents 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.

    Under this Act the only buyers who will be able to benefit from seller financing are the buyers who can already qualify for conventional financing with perhaps the exception of how much of a down payment they need.

    Seller financing has always been the alternative to government regulated financing. It is a meeting of the minds between two private individuals who negotiate an arm’s length contract to purchase property using an installment sale.
    The following is a breakdown of these restrictions, listed in order of greatest impact on property owners, buyers and the economy:

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

    The implication is that the seller must use the ability-to-repay underwriting requirements when offering seller financing consistent with the Dodd-Frank Act which amends the Truth in Lending Act. This new, proposed rule is 169 pages long: http://snipurl.com/fedrule

    The Consumer Financial Protection Bureau has spent a lot of energy developing a new, easy to read, two page mortgage disclosure form. It is unreasonable to expect sellers and buyers to fully understand and apply this 169 page rule. If buyer’s and seller’s negotiations deviate in the least the buyer has up to three years to rescind the sale and demand back all money paid to the seller, or anyone that the seller might have assigned rights and interest to, or any bank that takes the note as a collateral assignment.

    This could be financially devastating to the seller. Let’s not forget that today’s buyer will be tomorrow’s seller. These sellers are a diverse group. They come from all walks of life: low income, high income, non-English speaking, seniors, widows, minorities, but this requirement places the same standards on individuals as banks and mortgage lenders, only with more risk – the banker is in the business of mortgage loan origination and factors that risk into his business plan, whereas the individual seller does not have capital reserves and doesn’t do this as a business. Also, unlike a bank, they do not carry errors and omission insurance.

    Unlike banks and mortgage lenders, both the buyer and seller are consumers. They should both be equally protected. The buyer is purchasing real property and the seller is investing in/creating a financial product where they receive their equity over time. The seller is relying on the buyer to make monthly payments and maintain and protect the property. Terms are not dictated to either party, but rather they are negotiated between the parties.

    Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.
    Furthermore, why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.

    This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

    The SAFE Act does not put in place the ability to repay requirements, or any other requirements, unless the individual habitually and repeatedly uses seller financing in a commercial context. It is HUD’s position that Congress never intended under the SAFE Act to restrict private property owners from using seller financing, unless they did it as a primary business.

    The loan is fully amortizing (no balloon mortgages allowed).
    By not allowing seller financers to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act essentially does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.

    The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. Obviously, the Act does not recognize that a five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.

    The loan has a fixed rate or is adjustable after 5 or more years, subject to reasonable annual and lifetime caps.
    This restriction is reasonable, but it will eliminate the ability for any buyer to wrap an existing obligation that has an adjustable rate even if they believe they can afford any rate increase. This is again inconsistent with the SAFE Act.
    Moreover, if the seller does not know about the ability-to-repay requirements and that they are not able to have a balloon, they certainly will not know that you have to have a fixed interest rate for the first five years.

    The seller did not construct the home to which the financing is being applied.
    There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy. There is also that group of unemployed construction workers who built their own homes when times were good and now need to sell. This takes away their ability to use seller financing.
    Builders are in the business of building; not of originating loans.

    Using a mortgage loan originator to facilitate a seller-financed transaction creates additional risk and expense for both the buyer and the seller. It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them. Furthermore, there is no provision in a MLO’s errors and omission insurance that covers seller financing. None of the continuing education classes or the exams that an MLO must complete has a single chapter or question regarding seller financing.

    Who is supposed to pay the MLO? MLOs can charge a flat fee or up to 3% of the transaction. The only advertisements I have seen so far advertise a flat nonrefundable fee of $450. This fee has to be paid in advance, which makes sense, because why would a MLO spend hours and hours on an installment sale transaction which might not close? If the buyer pays the fee, then this is a forced origination fee never before imposed on buyers seeking seller financing. Why should the buyer have to pay money just to have an offer presented to the seller?
    A lot of buyers use seller financing because they are low income individuals, and seller financing, up to now, has provided a more affordable way to purchase property. If the seller pays the fee, they will have to pay money to have the MLO forward them the installment sale offer. If the seller receives multiple offers this could easily run into thousands of dollars in MLO fees just to sell their property.

    A lot of sellers are also low income individuals. The MLO will have to be a part of every offer and counteroffer because the sale and terms of an installment sale are one and the same and cannot be separated. For instance, the buyer might be willing to pay a higher interest rate if the seller is willing to come down on the price and down payment.
    A lot of seller financing takes place in rural areas that are underserved by mortgage lenders and banks. It is going to be very difficult to find a MLO in those areas who is also willing to take the risk facilitating a seller financed transaction.
    This has the potential of pushing seller financing underground – not a desirable result.

    The Dodd-Frank Act allows a property owner to use seller financing without having to become a mortgage loan originator as long as they don’t use it more than three times in a 12 month period and comply with the above restrictions. In the SAFE Act there are no restrictions to the number of times seller financing can be used as long as you are not in the business of being a mortgage loan originator. The coauthor of the Dodd-Frank Act, Representative Barney Frank, sent a letter to HUD on July 22, 2010 urging it to place the maximum amount of seller transactions that an individual could do before becoming a MLO, or having other restrictions on them, at five in a 12 month period. I would propose that the Dodd-Frank Act adopt that same number and place no restrictions on seller financing until 5 is surpassed. The only restrictions that should apply to 5 or less are those restrictions that the states already impose either through state statute or case law.

    Under The Act loan officers at community banks do not have to become a Mortgage Loan Originator if they originate 5 or less transactions in a 12 month period. The rationale is that this is burdensome, costly and there is not enough volume to create a systemic risk. Ma and Pa on Main Street should be granted those same allowances. The Act puts more restrictions and risk on Ma and Pa than it does on financial institutions.

    In watching the debates in Congress last summer it was repeatedly said that the Wall Street Reform and Consumer Financial Protection Act would not negatively affect or over-regulate Ma and Pa on Main Street. If this doesn’t negatively affect and regulate seniors, minorities, and lower income individuals on Main Street I don’t know what does. These restrictions will all but do away with seller financing, which will have a negative impact on housing, existing property owners, those desiring to be property owners and the economy.

    The National Real Estate Investors Association is a National Trade Association representing more than 200 local real estate investor associations, and more than 30,000 real estate investors and small business owners. For more information about the National Real Estate Investors Association, visit http://www.nationalreia.com.

  118. The government regulation of mortgages is reasonable ONLY when it involves individual’s deposits in lending institutions which are entrusted with peoples savings.
    Individuals, on the other hand have only their own funds at risk and must have the freedom to enter into private mortgage arrangements without government regulation. This is the common law of contracts which goes all the way back to the Romans, long before we had a government. The government and/or the Fed’s regulatory reach regarding lending should go not encroach upon our God-given rights.

  119. Kill the Frank-enstein / Dodd Bill and the Housing Industry alone with the US Economy will be SAVED! Never have we seen one act damage the economy of the USA to this degree in history! They should be imprisoned for Financial Terrorism on the USA!

  120. Carlo Rodriguez

    Another freedom taken away from us. This government is out of control and we need to get them out of office. They are destroying the real estate market even more if they pass this. Let’s do everything in our power to not let this bill pass and let’s throw the bums out!

  121. Laura Ferran-Algieri

    I, too believe this to be true.
    Please protect our FREEDOM to PRIVATE OWNER FINANCING.
    “I strongly request that you make an exception for owner-financed transactions! I support Buyers and Sellers being free to contract to make non-traditional arrangements to buy, sell and finance real estate. So many people are locked out of the traditional financing market today and a few get relief by reaching a private arrangement with a seller to offer them some form of private financing. That may be in the form of a mortgage granted the seller, a lease-option, an installment sale or some other non-traditional financing methodology.

    Private sellers are in no position to comply with a 169 page set of rules and regulations in order to offer such financing and should not have to understand and comply with those rules unless they are in the business of providing such loans as shown by more than three transactions a year. These proposed rules as applied to seller financed transactions solve a non-existent problem and will lock consumers who do not have stellar credit out of the housing market – maybe permanently. Seller-financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people.”

    Stay out of our business!

  122. Why is it that Democrats like to blame big business when they, in fact, are heavily involved in big businesses? Why did Obama, after throwing Wall Street under the bus, then come begging for more money recently? Why is it Democrats attack financiers and banks – but have financiers and banks amongst them? Case in point – Maxine Waters and her accursed banker-investor husband?

    Democrats! Hypocrisy gets you nothing but resentment!

    Democrats! You can claim “good intentions” all you want – but NO ONE lives by good intentions! When you Democrats decide to dig into the pockets of hard-working citizens and say “I have good intentions for this tax”, I’m not feeling it!

    Frank-Dodd Act is one of the worst pieces of legislation along with Obamacare. Repeal Frank-Dodd, let seller-financing through! Private-financing moves finances more and creates more opportunities and with the big banks.

    You want to curb “greedy” banks? Then do it – but don’t mess with the small financiers who are movers and shakers.

    Better yet – stay out of the whole thing!

  123. I have a house right now that I am offering to owner-finance in order to sell the house. If this bill passes I will simply be forced to let the house go back to the bank. Is this helping the current housing mess? Can you politicians not see the devastating consequences on the current horrible housing market of passing such an act as this.

    Seller-financed deals had nothing to do with the current lending crisis or financing melt-down that the banks created and no rule is needed to control them. Eliminating the realistic possibility of seller financing by making complicated rules with draconian penalties for non-compliance will only further hurt American home sellers and home buyers who wish to make a non-traditional arrangement between people.

    I am against any provision that eliminates and/or adversely impacts seller financing. The US Congress is inadvertently causing harm to the real estate industry and to the recovery of the larger economy. Lending standards are so high now that the majority of potential homeowners cannot qualify for a traditional loan. As an investor we are providing a profound viable option to allow people to purchase a home. In turn we are putting people to work renovating houses and paying other people for their services, including real estate attorneys, appraisers, home inspectors, realtors and others. Seller financing is helping our economy to recover. Without it they are undermining the economic recovery.

    Without the means to negotiate with private sellers hundreds of thousands, if not millions, of otherwise qualified buyers will be locked out of the housing market because of recession impacts that were beyond their control, and the housing industry will continue to strangle as a result of overly restrictive regulation.

    I ask the Federal Reserve Board to put in place an exception in the Dodd-Frank banking regulations that will exempt private owner financing from the rules.

  124. Federal Reserve Board and Lawmakers: Please do not, once again, take away one of our privileges as American citizens! The negotiating between two private parties for the exchange of real estate ownership has always been part of the American way.

    Private seller carry back financing (seller mortgages/notes, or other names that this transaction may be called), fills a huge gap that conventional financing cannot fill and are unwilling to fill.

    Many people, for whatever reason (maybe devastating medical bills) are honest, hard working individuals that cannot qualify through conventional institutions for a home. They need a new chance and many private owners are willing to let them have that chance for a new start. The buyer should also have the option of paying off the note ahead of time, without penalties, if they have the desire and ability to do so. Allow these sellers to extend terms, including balloon payments that are agreeable to both parties. And, these sellers should have the right to sell the paper to a third party, if they so desire. It is the seller that is taking the risk. Why should the buyer be able to say “I’m tired of playing this game” with in 3 years and get all of their money back? It should be treated as rent and none of their money returned, with the seller being able to take back the property. Many sellers are depending on the income for primary, additional or retirement incomes.

    Are we going to let the American dream of home ownership go by the way side for the benefit of big financial institutions that cannot fulfill this need? What about small builders and rehabers that are willing to carry the
    paper themselves? Taking away the option of private individuals to buy and sell real estate, to each other, will affect MILLIONS AND OUR COUNTRY’S FINANCIAL SITUATION WILL BE DAMAGED EVEN FURTHER.

    Please reconsider the ramifications of requiring the private seller, who wishes to hold the paper, to conform to the requirements that a huge financial institution with many employees and assets are capable of complying with.

    Audrey B
    Longmont, CO

  125. This just might be a violation of our civil rights……I never heard of such flagrant power grabs. This government must be stopped and NOW. Get this president and Senate and yes congress out in order to get qualified ordinary people in !

    I CANNOT BELIEVE THIS IS REALLY HAPPENING ! HOW CAN THIS HAPPEN ?

  126. I serve the 70 to 80% that cannot get loans. I alway verify income on a contract for deed and require down payments and certain debt to income ratios to get someone into a house, Individuals cannot have the same rules as banks, because we do not have the staff to do RESPA, TILA, etc.
    Let free enterprise have the incentive to solve problems and the people will find innovative ways to do it time and time again.

    Respectfully,

    David Epstein

  127. I am against implementing the provision in the Dodd/Frank bill the would prohibit private individuals from selling their homes and providing the financing in the from of a note. I am tired of the government trying to regulate every aspect of our life. This law would futher slow down the housing recovery and deny many citizens the opportunity to have their money earning a better rate of return than the government is giving. Do not enact this law eliminating private financing

  128. Let free enterprise have a financial incentive to solve problems and we will do it time and again. Regulations make it harder to work. Responsible real estate sellers that sell with owner financing or contracts for deed calculate ratios of debt to income, because we need to get paid for our properties. Just do not saddle us with the same regulations as banks, because we are not banks. We do not have the staff to try to be banks or the interest in controlling people financially the ways banks try to.

  129. Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.
    I ask the Federal Reserve Board to put in place an exception in the Dodd-Frank banking regulations that will exempt private owner financing from the rules.

  130. Seriously, this action must be halted! Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans. Homeowners are not bank officers or mortgage lenders. By requiring them to “qualify buyers” using bank standards means will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.

    Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.

    Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.

    This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

    By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.

    The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. A five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.

    There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy.

    It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.

  131. charles youngblood

    The Dodd-Frank Act does not exempt property owners who wish to use seller financing (installment sale) even though no money is lent, there is no table funding, and under the Truth and Lending Act they are not considered creditors. The Dodd-Frank Act (ACT) does exempt property owners who offer seller financing from having to become Mortgage Loan Originators (MLO) provided they only sell 3 properties or less in a 12 month period and they follow the restrictions below. Yet, the Act subjects the property owner to the same liability as an MLO:

    Title XIV Section 1401 (2) (E)

    1. The seller did not construct the home to which the financing is being applied.
    2. The loan is fully amortizing (no balloon mortgages allowed).
    3. The seller determines in good faith and documents 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.

    Under this Act the only buyers who will be able to benefit from seller financing are the buyers who can already qualify for conventional financing with perhaps the exception of how much of a down payment they need.

    Seller financing has always been the alternative to government regulated financing. It is a meeting of the minds between two private individuals who negotiate an arm’s length contract to purchase property using an installment sale.
    The following is a breakdown of these restrictions, listed in order of greatest impact on property owners, buyers and the economy:

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

    The implication is that the seller must use the ability-to-repay underwriting requirements when offering seller financing consistent with the Dodd-Frank Act which amends the Truth in Lending Act. This new, proposed rule is 169 pages long: http://snipurl.com/fedrule

    The Consumer Financial Protection Bureau has spent a lot of energy developing a new, easy to read, two page mortgage disclosure form. It is unreasonable to expect sellers and buyers to fully understand and apply this 169 page rule. If buyer’s and seller’s negotiations deviate in the least the buyer has up to three years to rescind the sale and demand back all money paid to the seller, or anyone that the seller might have assigned rights and interest to, or any bank that takes the note as a collateral assignment.

    This could be financially devastating to the seller. Let’s not forget that today’s buyer will be tomorrow’s seller. These sellers are a diverse group. They come from all walks of life: low income, high income, non-English speaking, seniors, widows, minorities, but this requirement places the same standards on individuals as banks and mortgage lenders, only with more risk – the banker is in the business of mortgage loan origination and factors that risk into his business plan, whereas the individual seller does not have capital reserves and doesn’t do this as a business. Also, unlike a bank, they do not carry errors and omission insurance.

    Unlike banks and mortgage lenders, both the buyer and seller are consumers. They should both be equally protected. The buyer is purchasing real property and the seller is investing in/creating a financial product where they receive their equity over time. The seller is relying on the buyer to make monthly payments and maintain and protect the property. Terms are not dictated to either party, but rather they are negotiated between the parties.

    Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.
    Furthermore, why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.

    This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

    The SAFE Act does not put in place the ability to repay requirements, or any other requirements, unless the individual habitually and repeatedly uses seller financing in a commercial context. It is HUD’s position that Congress never intended under the SAFE Act to restrict private property owners from using seller financing, unless they did it as a primary business.

    The loan is fully amortizing (no balloon mortgages allowed).
    By not allowing seller financers to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act essentially does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.

    The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. Obviously, the Act does not recognize that a five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.

    The loan has a fixed rate or is adjustable after 5 or more years, subject to reasonable annual and lifetime caps.
    This restriction is reasonable, but it will eliminate the ability for any buyer to wrap an existing obligation that has an adjustable rate even if they believe they can afford any rate increase. This is again inconsistent with the SAFE Act.
    Moreover, if the seller does not know about the ability-to-repay requirements and that they are not able to have a balloon, they certainly will not know that you have to have a fixed interest rate for the first five years.

    The seller did not construct the home to which the financing is being applied.
    There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy. There is also that group of unemployed construction workers who built their own homes when times were good and now need to sell. This takes away their ability to use seller financing.
    Builders are in the business of building; not of originating loans.

    Using a mortgage loan originator to facilitate a seller-financed transaction creates additional risk and expense for both the buyer and the seller. It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them. Furthermore, there is no provision in a MLO’s errors and omission insurance that covers seller financing. None of the continuing education classes or the exams that an MLO must complete has a single chapter or question regarding seller financing.

    Who is supposed to pay the MLO? MLOs can charge a flat fee or up to 3% of the transaction. The only advertisements I have seen so far advertise a flat nonrefundable fee of $450. This fee has to be paid in advance, which makes sense, because why would a MLO spend hours and hours on an installment sale transaction which might not close? If the buyer pays the fee, then this is a forced origination fee never before imposed on buyers seeking seller financing. Why should the buyer have to pay money just to have an offer presented to the seller?
    A lot of buyers use seller financing because they are low income individuals, and seller financing, up to now, has provided a more affordable way to purchase property. If the seller pays the fee, they will have to pay money to have the MLO forward them the installment sale offer. If the seller receives multiple offers this could easily run into thousands of dollars in MLO fees just to sell their property.

    A lot of sellers are also low income individuals. The MLO will have to be a part of every offer and counteroffer because the sale and terms of an installment sale are one and the same and cannot be separated. For instance, the buyer might be willing to pay a higher interest rate if the seller is willing to come down on the price and down payment.
    A lot of seller financing takes place in rural areas that are underserved by mortgage lenders and banks. It is going to be very difficult to find a MLO in those areas who is also willing to take the risk facilitating a seller financed transaction.
    This has the potential of pushing seller financing underground – not a desirable result.

    The Dodd-Frank Act allows a property owner to use seller financing without having to become a mortgage loan originator as long as they don’t use it more than three times in a 12 month period and comply with the above restrictions. In the SAFE Act there are no restrictions to the number of times seller financing can be used as long as you are not in the business of being a mortgage loan originator. The coauthor of the Dodd-Frank Act, Representative Barney Frank, sent a letter to HUD on July 22, 2010 urging it to place the maximum amount of seller transactions that an individual could do before becoming a MLO, or having other restrictions on them, at five in a 12 month period. I would propose that the Dodd-Frank Act adopt that same number and place no restrictions on seller financing until 5 is surpassed. The only restrictions that should apply to 5 or less are those restrictions that the states already impose either through state statute or case law.

    Under The Act loan officers at community banks do not have to become a Mortgage Loan Originator if they originate 5 or less transactions in a 12 month period. The rationale is that this is burdensome, costly and there is not enough volume to create a systemic risk. Ma and Pa on Main Street should be granted those same allowances. The Act puts more restrictions and risk on Ma and Pa than it does on financial institutions.

    In watching the debates in Congress last summer it was repeatedly said that the Wall Street Reform and Consumer Financial Protection Act would not negatively affect or over-regulate Ma and Pa on Main Street. If this doesn’t negatively affect and regulate seniors, minorities, and lower income individuals on Main Street I don’t know what does. These restrictions will all but do away with seller financing, which will have a negative impact on housing, existing property owners, those desiring to be property owners and the economy.

    The National Real Estate Investors Association is a National Trade Association representing more than 200 local real estate investor associations, and more than 30,000 real estate investors and small business owners. For more information about the National Real Estate Investors Association, visit http://www.nationalreia.com.

  132. 07 22 11
    FEDERAL RESERVE SYSTEM
    12 CFR Part 226
    [Regulation Z; Docket No. R–1417]
    RIN 7100–AD75
    Regulation Z; Truth in Lending
    AGENCY: Board of Governors of the
    Federal Reserve System.
    ACTION: Proposed rule; request for
    public comment.

    Please do not enact this proposal, for the welfare of all homeowners and perspective buyers, especially in this time of little to no lending by institutions. Do not close the door on what little opportunity there is to buy and sell in this negative real estate market.
    Thank you,
    Alice

  133. Who are you guys? Why are you trying to ruin the ‘little guy’s’ only real chance at property ownership? I know that you don’t want to alienate your constituents by taking yet another freedom/unalienable right away from us! If we (the sellers) are willing to take a chance on someone’s (the buyer’s) ability to pay reliably, what harm does it do you? We (our bank books) are the things at risk, not yours! Get real and start dealing with the true problems facing our nation; LEAVE US BE!!!!!!!!!!!!!!!

  134. Sheryl Schull

    This economy is already a hardship on so many people and many, many people cannot qualify for a home loan, owner financing is their only option…please don’t take that away from the public. It’s the right of the homeowner to sell their own property any way they see fit; after all it is “their” property isn’t it?

    Homeowners are not bank officers or mortgage lenders. By requiring them (and most of “them” are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Therefore depriving millions of people of home ownership.

    It is my opinion and the opinion of everyone I have talked to about this that this is patently unfair to homeowners and is just another huge step toward socialism, which the majority of Americans are opposed to.

    Just because you have been given the power to do something doesn’t necessarily make it right to do it.

  135. I support Buyers and Sellers being free to contract to make non-traditional
    arrangements to buy, sell and finance real estate. So many people are locked
    out of the traditional financing market today and a few get releif by reaching
    a private arrangement with a seller to offer them some form of private financing.
    That may be in the form of a mortgage granted the seller, a lease-option, an
    installment sale or some other non-traditional financing methodology.

  136. I question the need for more rules to regulate private owner financing. United States citizens are now regulated in every part of their lives. From every aspect of our domestic lives to this issue of determining whether a buyer is qualified to pay for a private contract with a home seller.
    Federal Reserve needs to exempt regulations which would to hamper private owner financing. Millions of Americans are unable to enjoy home ownership now. Private lending is not part of the housing bust and should not be subjected to institutional banking regulations.

  137. As a sellr I depend on income from seller held notes. As a buyer I can help sellers get their properties sold.
    To outlaw these benefits is harmful to everyone. Pls do not do it

  138. Clifford Running

    Private owner Financing-Should you derail this basic freedom of property owners, you will exclude millions from ever owning a home again-due to low credit or bankrupcy brought on by greedy banks and lousy lawyers. There are MILLIONS of us. Where do we live? No apartments-no SFD/SFA rentals due to the previous reasons plus a hundred more ( give a banker a foot and they will take a hundred miles ). Do we now LIVE IN OUR CAR? This country will EXPLODE -EXPLODE-EXPLODE with citizen reaction. I am a 4 year veteran of the Vietnam war. Now try and take this away plus reduce our social security and I strongly believe 90% of american citizens SHALL react, and not in way since over 200 years ago.

  139. This is congress at its worst. They dont understand the positive impact that this technique has for both the seller and the buyer. The lives of regular people will be negatively impacted if this bill moves forward.

  140. Kent Shepherd

    While the Dodd-Frank Act is well meaning, it goes over the top on Seller financing.

    We should be getting the country back on track with less regulation for “Ma and Pa” not more. The points made below are a critical part in getting the economy moving in the growth direction and not the “down hill slide” direction.

    We are the greatest country on earth. We won’t stay that way if we allow these proposed interpretations to go through.

    Free enterprise is what made this country the envy of the world. The ability to activily pursue free commerce is criticle to our way of life.

    This part of the Dodd-Frank Act would greatly set us back in this area of freely being able to sell our own property to a willing buyer in good faith.

    •Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.
    •Homeowners are not bank officers or mortgage lenders. By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.
    •Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.
    •Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.
    •This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.
    •By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.
    •The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. A five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.
    •There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy.
    •It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.

    These points above should not stand that are against Seller Financing. I do not believe it was the intent of the Dodd-Frank Act to burden “Ma and Pa” as such.

    Please do not go forward with this!!!

  141. Stephen Barcel

    Please don’t initiate such restrictions on seller financing. This will really put my
    business in distress as we are just now working with several people to help
    them to become home owners and reach their American dream. Allowing seller
    financing at the sellers discretion and the buyers decision is what makes this
    country great. Having the right to make our own choices and to live with those
    decisions and there consequences. Just because the fat cats in the Banking
    Industry required a bailout from the Government that shouldn’t make it so that
    the average citizen shouldn’t be able to direct their own path.
    Sincerely,
    Stephen Barcel
    702-884-6820
    American Citizen and Tax Payer

  142. Larry Starks, Sr.

    I do not agree with this concept of controling someone’s RIGHT 2 HOMEOWNERSHIP!
    This is is very political, and downright out of control…this must be stopped and/or this proposal “must” be elimenated!!

  143. Larry Starks, Sr.

    This is very POLITICAL…I do not agree with this Proposal….this proposal “must be eliminated!!” SIMPLY PUT!!!

  144. The proposed rules under Regulation Z of the Dodd-Frank Wall Street Reform and Consumer Protection Act should ONLY be applied to commercial lenders and Wall Street’s crooked companies. These are the people responsible for the mortgage mess, not the private property owners. Saying that you are going to clean up the mortgage mess and prevent future abuse, by smashing down on private sellers, would be like the president of Walt Disney promising to fix the rides at EPCOT by repainting the executive washrooms at their Corporate headquarters.

    The revisions to the regulation would effectively eliminate seller-held (a.k.a. private purchase money) mortgages, by prohibiting property sellers from taking back a mortgage, unless the buyer can essentially qualify for conventional financing. Ma and Pa Homeowner, who create most of seller-held mortgages, won’t be able to qualify buyers and the cash flow notes won’t be created. This will remove access to housing for millions of Americans, because seller financing is the only way they can buy a house.

    Congress never intended under the SAFE Act to restrict private property owners from using seller financing, unless they did it as a business. The SAFE Act does not have any ‘ability to repay’ requirements, or any other requirements, unless the individual uses seller financing in a commercial context.

    I urge the Fed to exempt seller installment sales created by private transactions from these rules.

  145. Susan Wauchope

    To whomever it May Concern:

    The Dodd-Frank Act does not exempt property owners who wish to use seller financing (installment sale) even though no money is lent, there is no table funding, and under the Truth and Lending Act they are not considered creditors. The Dodd-Frank Act (ACT) does exempt property owners who offer seller financing from having to become Mortgage Loan Originators (MLO) provided they only sell 3 properties or less in a 12 month period and they follow the restrictions below. Yet, the Act subjects the property owner to the same liability as an MLO:

    Title XIV Section 1401 (2) (E)

    1. The seller did not construct the home to which the financing is being applied.
    2. The loan is fully amortizing (no balloon mortgages allowed).
    3. The seller determines in good faith and documents 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.

    Under this Act the only buyers who will be able to benefit from seller financing are the buyers who can already qualify for conventional financing with perhaps the exception of how much of a down payment they need.

    Seller financing has always been the alternative to government regulated financing. It is a meeting of the minds between two private individuals who negotiate an arm’s length contract to purchase property using an installment sale.
    The following is a breakdown of these restrictions, listed in order of greatest impact on property owners, buyers and the economy:

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

    The implication is that the seller must use the ability-to-repay underwriting requirements when offering seller financing consistent with the Dodd-Frank Act which amends the Truth in Lending Act. This new, proposed rule is 169 pages long: http://snipurl.com/fedrule

    The Consumer Financial Protection Bureau has spent a lot of energy developing a new, easy to read, two page mortgage disclosure form. It is unreasonable to expect sellers and buyers to fully understand and apply this 169 page rule. If buyer’s and seller’s negotiations deviate in the least the buyer has up to three years to rescind the sale and demand back all money paid to the seller, or anyone that the seller might have assigned rights and interest to, or any bank that takes the note as a collateral assignment.

    This could be financially devastating to the seller. Let’s not forget that today’s buyer will be tomorrow’s seller. These sellers are a diverse group. They come from all walks of life: low income, high income, non-English speaking, seniors, widows, minorities, but this requirement places the same standards on individuals as banks and mortgage lenders, only with more risk – the banker is in the business of mortgage loan origination and factors that risk into his business plan, whereas the individual seller does not have capital reserves and doesn’t do this as a business. Also, unlike a bank, they do not carry errors and omission insurance.

    Unlike banks and mortgage lenders, both the buyer and seller are consumers. They should both be equally protected. The buyer is purchasing real property and the seller is investing in/creating a financial product where they receive their equity over time. The seller is relying on the buyer to make monthly payments and maintain and protect the property. Terms are not dictated to either party, but rather they are negotiated between the parties.

    Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.
    Furthermore, why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.

    This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.

    The SAFE Act does not put in place the ability to repay requirements, or any other requirements, unless the individual habitually and repeatedly uses seller financing in a commercial context. It is HUD’s position that Congress never intended under the SAFE Act to restrict private property owners from using seller financing, unless they did it as a primary business.

    The loan is fully amortizing (no balloon mortgages allowed).
    By not allowing seller financers to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act essentially does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.

    The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. Obviously, the Act does not recognize that a five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.

    The loan has a fixed rate or is adjustable after 5 or more years, subject to reasonable annual and lifetime caps.
    This restriction is reasonable, but it will eliminate the ability for any buyer to wrap an existing obligation that has an adjustable rate even if they believe they can afford any rate increase. This is again inconsistent with the SAFE Act.
    Moreover, if the seller does not know about the ability-to-repay requirements and that they are not able to have a balloon, they certainly will not know that you have to have a fixed interest rate for the first five years.

    The seller did not construct the home to which the financing is being applied.
    There are a lot of small builders that have a spec house or two that they can’t sell unless they offer great terms using seller financing. Otherwise they have to let these properties go back to the bank, which does not help housing or the economy. There is also that group of unemployed construction workers who built their own homes when times were good and now need to sell. This takes away their ability to use seller financing.
    Builders are in the business of building; not of originating loans.

    Using a mortgage loan originator to facilitate a seller-financed transaction creates additional risk and expense for both the buyer and the seller. It has been said that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them. Furthermore, there is no provision in a MLO’s errors and omission insurance that covers seller financing. None of the continuing education classes or the exams that an MLO must complete has a single chapter or question regarding seller financing.

    Who is supposed to pay the MLO? MLOs can charge a flat fee or up to 3% of the transaction. The only advertisements I have seen so far advertise a flat nonrefundable fee of $450. This fee has to be paid in advance, which makes sense, because why would a MLO spend hours and hours on an installment sale transaction which might not close? If the buyer pays the fee, then this is a forced origination fee never before imposed on buyers seeking seller financing. Why should the buyer have to pay money just to have an offer presented to the seller?
    A lot of buyers use seller financing because they are low income individuals, and seller financing, up to now, has provided a more affordable way to purchase property. If the seller pays the fee, they will have to pay money to have the MLO forward them the installment sale offer. If the seller receives multiple offers this could easily run into thousands of dollars in MLO fees just to sell their property.

    A lot of sellers are also low income individuals. The MLO will have to be a part of every offer and counteroffer because the sale and terms of an installment sale are one and the same and cannot be separated. For instance, the buyer might be willing to pay a higher interest rate if the seller is willing to come down on the price and down payment.
    A lot of seller financing takes place in rural areas that are underserved by mortgage lenders and banks. It is going to be very difficult to find a MLO in those areas who is also willing to take the risk facilitating a seller financed transaction.
    This has the potential of pushing seller financing underground – not a desirable result.

    The Dodd-Frank Act allows a property owner to use seller financing without having to become a mortgage loan originator as long as they don’t use it more than three times in a 12 month period and comply with the above restrictions. In the SAFE Act there are no restrictions to the number of times seller financing can be used as long as you are not in the business of being a mortgage loan originator. The coauthor of the Dodd-Frank Act, Representative Barney Frank, sent a letter to HUD on July 22, 2010 urging it to place the maximum amount of seller transactions that an individual could do before becoming a MLO, or having other restrictions on them, at five in a 12 month period. I would propose that the Dodd-Frank Act adopt that same number and place no restrictions on seller financing until 5 is surpassed. The only restrictions that should apply to 5 or less are those restrictions that the states already impose either through state statute or case law.

    Under The Act loan officers at community banks do not have to become a Mortgage Loan Originator if they originate 5 or less transactions in a 12 month period. The rationale is that this is burdensome, costly and there is not enough volume to create a systemic risk. Ma and Pa on Main Street should be granted those same allowances. The Act puts more restrictions and risk on Ma and Pa than it does on financial institutions.

    In watching the debates in Congress last summer it was repeatedly said that the Wall Street Reform and Consumer Financial Protection Act would not negatively affect or over-regulate Ma and Pa on Main Street. If this doesn’t negatively affect and regulate seniors, minorities, and lower income individuals on Main Street I don’t know what does. These restrictions will all but do away with seller financing, which will have a negative impact on housing, existing property owners, those desiring to be property owners and the economy.

    The National Real Estate Investors Association is a National Trade Association representing more than 200 local real estate investor associations, and more than 30,000 real estate investors and small business owners. For more information about the National Real Estate Investors Association, visit http://www.nationalreia.com.

  146. Kadi Abdul Hameed

    This legislation is not in the interest of real estate recovery and many people will not be able to buy houses which otherwise they will be able to.
    Please do not pass this piece of legislation.
    Thanks.

  147. I do not agree w/ the proposal to Stop Owner Financing! By eliminating the ability to Buy & Sell through Owner Financing….you are taking away more of our Freedom. Owner Financing provides The Seller facing Foreclosure another Option to sell their property and preventing Foreclosure, The Seller who owes more than the value of the home has the ability to sell, The Buyer who cannot get a Bank Loan can Buy a House, The Buyer with less than perfect credit due to Life situations…Can become a Home Owner!! The hard working, Legal, Tax paying Individuals who are Experiencing the Hardships of Life cannot Always become Home Owners through Traditional Bank Financing! We are able to Transform Lives through Affordable Housing to Empower Families and Individuals to Enjoy the AMERICAN DREAM of Home Ownership! By passing this Law, you are taking away the Freedom of Home Ownership to many Americans! Many people we all Know, Family, Friends, & Co workers! Please take your Loved ones and other Americans in consideration when reviewing this Law!

  148. Please do not bother seller financing the Dodd-Frank act.
    There are many people that would not be able to ever become a homeowner
    with out using seller financing and many seller would not be able to sell there
    property.People need help today more than ever to become a homeowner with
    this financing the way it is now .

    Please do not vote for this Dodd-Frank Act .
    Thank you,

  149. I DECLARE YOU REMOVE THIS SINISTER ACT!! –
    DODD FRANK ACT
    Seller financed deals had nothing to do with the current lending crisis or financing melt-down and no rule is needed to control them !!
    Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.
    Homeowners , Investors and Homebuilders have every right to sell their home to whom they please.. Having them regulated like loan officers and bankers is ludicrous. Your greed or act is the equity you’re not receiving a $$$ on these home loans.

  150. •Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.
    •Homeowners are not bank officers or mortgage lenders. By requiring them (many if not most of whom who take back a mortgage are elderly) to qualify buyers using bank standards means they will simply refuse to sell with owner financing. Thus millions of people will be deprived of home ownership.
    •Why should the buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.
    •Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.
    •This also creates the opportunity for predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. (An example of that could be a balloon, an interest rate greater than 1.49% above a standard mortgage, or the seller did not know how to calculate the income-to-debt ratio correctly, or know what residual income means). That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.
    •By not allowing them to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. A lot of seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30 year investment. The Dodd-Frank Act does the same thing insurance companies do who sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.
    •The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Dodd-Frank Act community banks are allowed to originate fully amortizing loans with a five year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. A five year balloon is predatory lending. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.

  151. Why don’t our lawmakers get it?? It’s going to take “real estate investors” like us to bring the housing market, i.e. “the economy” out of recession! If they keep taking away our financing tools that help us to sell, what once was abandoned, boarded up, NON PROPERTY TAX producing eye sores, into beautiful remodeled homes for TAX PAYING BUYERS, who do they think will be buying these millions of forclosed and abandoned homes. It certainly won’t be average citizens because all of their credit is being screwed by the greedy banks through no fault of their own!! Can they not realize all of the industries that we investors create business / jobs for???

    Lee T.

  152. I understand consumer protection and I know why it makes sense. I want the government to be sure that the proper laws are in place to proescute those that engage in fraudulent and deceptive practices.

    However, when the government decides to give large corporations a monopoly by making private financing illegal, it has gone to far. As a landlord, I too have a voice. I have not done a lot of owner financing but it is a tool that I keep handy for clients that believe can get over the hurdle and actually complete the transaction one day. Not every one is allowed this privilege.

    This said, please rethink this proposition. It will further kill the market. We are the only ones buying today because the banks are making it virtually impossible to lend. Putting further restrictions in the market will have the unintended consequence of further dampening the market. Please rething the flawed plan.

  153. Taking away a sellers right to owner finance is the last thing we need in this real estate market. This Dodd-Frank bill goes way over the top.

  154. I did not find out about this until after the deadline but this is just another one of many of our rights and freedoms being usurped by those who should not be have any authority to do so.

  155. This proposed legislation should not passed. Seller financing will help a lot of people to buy their own home. They will not be able to be approved with bank standards..and therefore, real estate economy in this country at this time will be more distressed.

    Wake up people. Tell your friends, relatives and acquaintances about this.

    thank you.

  156. Unlike banks and mortgage lenders, both the buyer and seller are consumers. They should both be equally protected. The buyer is purchasing real property and the seller is investing in/creating a financial product where they receive their equity over time. The seller is relying on the buyer to make monthly payments and maintain and protect the property. Terms are not dictated to either party, but rather they are negotiated between the parties.
    This is ridiculous legislation that helps no one… not the seller, not the buyer, and certainly not our already struggling economy!

  157. I am a custom homebuilder, remodeler, rehabber, and real estate investor. I am past president of TREIA ( Triangle Real Estate Investors Association)and a member of Wake County Home Builders Association.
    If we are limited on how we can buy and sell real estate, you are blocking millions of people from ever buying a home.
    Since 2007 when this economy downturn started, most people do not qualify to borrow money from banks. This includes homebuilders and developers who had their notes called or simply not renewed by the original bank that loaned the money to build or develop. These banks repossessed the properties and sold them off at wholesale prices.
    Those builders and developers can’t qualify for a bank loan. They had to go thru babkruptcy because their notes were not renewed. This is just one example of how restricting how people make deals work will effect this country for many years.

    As a homebuilder and real estate investor, we should be able to sell our property to anyone with the negosiated terms we negotiate. The federal government cannot restrict how we do business.

    A better idea is to make it mandatory for ALL Banks that take Any Federal Money must make loans at market rate to real estate investors so we can turn this economy around.

    Do Not Restrict how real estate is bought and sold whether thru private investors or commercial banks.

  158. This just another attempt to be in control of what you do with your own house. Let’s give them all our rights. They (Dems.) did the damage and frank and dodd was behind the scenes all along. This started in billy’s pres. , then in 2006 they took over and told Bush go get lost. Now they coming after us through regulation. Give them a few more years you have seen nothing yet. If we let them.

  159. Here we go again with more regulation. Aren’t we already overwhelmed with regu-
    lation? Why are these politicians trying to control more our lives with more of this
    stuff? Enough is enough. This Dodd-Frank Act must definitely be stopped!

    Thanks.

  160. I owned several properties. One small home after the remodel couldn’t sell EXCEPT for seller financing. Even then with prefect credit got scammed by the mother who immediately put her son into the property. Ended up losing more than 50% of what I had in there. If I’d done this AFTER this law went into effect I’d been sent to prison. Why doesn’t the government stay out of of seller finance. They seem to want their fingers in EVERYTHING and I’m tired of it.

    Everything is now REGULATED to the point I can’t tell if we’re living in America or Russia.

    Dodd and Frank were part of the ORIGINAL problem with the housing crisis to begin with. Now they think they can FIX IT!!!! Couple of idiots that acted like it was someone elses fault.

    Why do they want to regulate what goes on between two people that come to an agreement on price and terms. If one lies.. that’s their fault… just like the government.. they’ve been lying to us forever but that’s acceptable in their eyes.

  161. enough is enough. the function of govt. is ensure every one has a chance why didn’t
    they say to the banks and goldman you want the $$ modify the loans so that people can stay in there homes.by the people for the people. The only reason for this is for the banks to make $$$$ what happen to the restof us i want to sell my home to my neighbor and iam willing to hold the mortgage so be it who the heck is any bank or wall st. investment firm or even the fed to say what I can do witrh my home.Are you makeing the payments,When i was sick did you we give a grace period to catch up on the payments when I was out of work did you say come work for us so that you can make your payments. So why are we paying you to take my right to earn a living. it’s okay if they rape us But oh forbid we the people should do something for our selves. we the people,regardless of race, color . creed ,we the people who were born here ,who fought and are fighting,we the people who died and are.Dying we the people whom our govt. helped put out work, we the people who go to sleep in tents. we the people who were sold a heap of monure who up and found what retirement. what we should do let,s everybody take our $$$ out the bank let them eat all those charges. And all those who are in favour of this let’s put them out of work let them live on the street and see how they like it.None of this may ever happen-but we need to vote not for color of skin not because they smell like me look like me walk and talk like me. Or because they can throw the most mud. but because they are for the people by the people.
    And all that other menure they shove tell em go stick it were the sun don.t shine.

  162. with the crummy interest rates so low and the fact that I don’t trust this *F—–G* Government any further than I can through them, I keep all my cash in Postal Money Orders…..

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