The note industry coalition Save Seller Financing (www.SaveSellerFinancing.org) is making great progress in educating government regulators to gain an exemption from the SAFE Act, Dodd-Frank Act, Loan Originator Compensation Rule and the Ability to Re-Pay Rule. I hope to have an update soon, so watch for it here.
They can’t do it alone. This requires the participation of a majority of those who care about the future of this industry. THE PAPER SOURCE has given it financial support. The coalition needs your support as well. Help us by going to www.savesellerfinancing.org (or call 253-445-3599) and do 2 things:
1) Sign the petition and 2) donate.
We require the efforts to be made to distinghish small investors from banking institutions.
Yes we do !
Here’s an email I just received re my posting about what the Save Seller Financing Coalition is trying to do…
Dear Bill,
Personally I have no problem with the ability to repay rule(s).
My business model is NOT “Loan to Own”.
I really want to have people in there who are able to make the payments.
I like long term performing notes, and would very much like to have a VERY low foreclosure rate. Something like 1 foreclosure per 5,000 performing notes sounds about right to me. I think of myself as being in the note repair business.
Thanks for all you do, but I see the ability to repay as simply making our note business just that much more professional. — (name withheld)
Ric Thom, who is one of the founders of the Save Seller Financing Coalition and who has written for THE PAPER SOURCE JOURNAL and taught at our seminars, responded:
Nobody wants their buyer to fail. That’s not the point. Under Dodd Frank buyers have 3 years in which to ask the courts to rescind the installment sale and get all of their money back from the seller or note buyer on the grounds that the seller did not make a good enough effort to determine the buyers ability to repay. Most sellers do not have this underwriting skill.
The buyers defense is, ‘I couldn’t qualify for a conventional loan because of the strict ability to repay (ATR) rules but the seller entered into an installment sale with me anyway. I want my money back’
There should be no ATR rule on the sellers first 5 installment sales in any 12 month period. Yes the seller and buyer should try to make it a good fit, but the seller should not lose their shirt for taking a chance on the buyer by doing an installment sale.
My response was a bit shorter:
Dear —–,
My problem is with the government telling us how we can and cannot sell our own property.
Regards,
Bill
Thats ridiculous that doesn’t give the seller or the note buyer a chance