In past Newsletters, I have discussed in different ways the importance of seller financing. I have talked about the "void" it fills in a marketplace where conventional financing is difficult to obtain. I have talked about the market being able to move - property being bought and sold - because sellers are willing to take the place of the bank and allow commerce to continue. I have talked about seller financing being a local economic stimulus by improving neighborhoods, beautifying homes, and getting money into the hands of bankers, construction workers, landscapers, etc. Maybe you have used this wonderful instrument called seller financing only once to sell a property you own. Maybe you use it countless times as a way of growing your real estate business.
Whatever your circumstance, your ability to use seller financing to sell a property you own may be in jeopardy ! Our government, in its omniscience, is fashioning legislation designed to "clean up" the mortgage lending industry as a result of the "predatory" lending practices that it claims led to the mess we are in currently. It purports to establish rules, requirements and certain restrictions at the beginning or origination phase of a loan transaction. This is being communicated to the public as a means of protecting them from predators by requiring strict licensing and demanding certain behavior take place by "professionals" all in the name of protecting the consumer.
Fine. But, of course, we have the unintended consequence of this protective behavior, everyday people being hurt and deprived of selling their own property as they deem fit. Thrown into the mix is seller financing, requiring you to be licensed as a mortgage lender if you complete too many transactions and basically saying to you that you do not have the right to sell a property you own and use seller financing as many times as you please. Talk about the loss of a property right!
As so often happens, the legislation is complex and open to interpretation. You need to read it for yourself. So, please go to www.sellerloans.com, click on Newsletters then click on 8-7-2009. The "offending" legislation is HR 1728 and the SAFE Mortgage Licensing Act. Clint Hinman does a great job in focusing on the issue in his article on HR 1728 and how it affects all of us who one way or another, make a living in the seller financing business. Please read his comments carefully.
Many of us in this business have written our Senators and spoken at industry meetings in order to inform and educate people as to the potential danger to our industry that exists here. I hope you will take it upon yourself to read Clint's article and the SAFE Act and then take the action you feel appropriate to protect your rights in this matter. It is my intention to be writing this Newsletter years from now and continue to play my small role in helping seller financed transactions get done. Hope you feel the same way.
Regards,
Denny Stanz
760-245-5366
760-245-5367 fax
dennystanz@verizon.net
www.CaliforniaNoteBuyerLLC.com
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