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You're About To Lose Your Rights As A Real Estate Investor...


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#1 MichaelG

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Posted 16 July 2011 - 07:59 AM

[i]I read this post on another forum by an individual that I respect, so I assume there's some credibility in it. I know we don't do a whole lot of owner financing here, but I thought it was worth posting just FYI...so, here it is:

_________________________________>>>>>>

As many of you know, on July 22, unless others in congress intervene, the US government will make it illegal to seller finance the traditional way.

What does this mean to you?

You will be limited to seller financing 3 properties a year.

It will be illegal to offer short term financing. All seller financed loan will HAVE to be 30 years long.

It will be illegal to include a "balloon payment."

It will be illegal to offer "interest only."

Your buyers can back out of any deal you offer within the first 3 years...!

Your buyers are entitled to get ALL their down payment money back within 3 years...!

Your buyer can unwind your deal AT WILL anytime within 3 years...!

What does this really mean?

1. This means that you will not get paid off for 30 years if you offer seller financing.
2. You will have to put the buyer's down payment into a reserve account until your buyer's right of rescission expires after 3 years.
3. You will not be able to buy and seller finance more than three properties in a given year.

All investors need to contact their congressman and senators and protest this malfeasance by the banking lobby to eliminate financing competition, and undermine the free market. Otherwise, we have no one to blame, but ourselves, for not acting.


#2 <Steve>

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Posted 16 July 2011 - 09:32 AM

America's Founders understood clearly that private property is the foundation not only of prosperity but of freedom itself. Thus, through the common law, state law, and the Constitution they protected property rights—the rights of people to freely acquire, use, and dispose of real property any way they choose.

With the growth of government today, however, those rights are seriously being compromised.

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#3 MichaelC

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Posted 16 July 2011 - 09:56 AM

This is so far fetched and out there, I can't take it seriously. Can this be categorized as another internet hoax? Can anyone provide a link to this pending bill?

#4 MichaelG

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Posted 16 July 2011 - 10:18 AM

This is so far fetched and out there, I can't take it seriously. Can this be categorized as another internet hoax? Can anyone provide a link to this pending bill?

It is far fetched. I hope it is an internet hox. I'll contact the person who posted in the other forum and ask for the information on how to access the legislation. Will keep you posted.

#5 MichaelG

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Posted 16 July 2011 - 10:41 AM

This is so far fetched and out there, I can't take it seriously. Can this be categorized as another internet hoax? Can anyone provide a link to this pending bill?

Found this information. Will post more when I find it.
http://noteinvestor....financing-laws/

Just found another good article (in fact, this one is probably better):
Pay particular attention to the info on the Dodd-Frank Act.
http://www.realtor.o...dfdff342c47dc89

And another...
http://noteinvestor....wner-financing/

#6 MichaelG

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Posted 16 July 2011 - 02:52 PM

Still more info...

http://papersourceon...u-must-act-now/

HUD updates to the SAFE ACT:

http://www.youtube.c..._embedded#at=37

#7 MichaelC

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Posted 16 July 2011 - 05:41 PM

Thanks for sharing the info, MG. I can't understand the reasoning behind this Bill, and I find it hard to believe this will become law. It'll be interesting to see how this plays out.

#8 <Steve>

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Posted 16 July 2011 - 06:41 PM

Why is it Ok to do three owner financed deals and then the 4th one is the magic number when it becomes not correct? Is it an issue about the format of the financing, or an issue with it being part of a business model making a profit, and government can't get a piece of the action? Dodd has been kicked to the curb and is no longer in the game. Barney Frank is a total goof ball, the one over Freddie and Fannie and banking regulations. Isn't he the one that said everyone, even those who could not afford it, should be able to get financed and be home owners? Isn't he the one that turned his back and let the banks go crazy? Yes he is, he's an idiot. And he writes this crap as a bill. If he's so dam smart why didn't he realize where his polices would put us today? Just because he likes to bend over doesn't mean we do!

just say'n

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#9 MichaelG

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Posted 16 July 2011 - 06:57 PM

Thanks for sharing the info, MG. I can't understand the reasoning behind this Bill, and I find it hard to believe this will become law. It'll be interesting to see how this plays out.

Michael - As you know, there doesn't have to be a "reason" behind it when the motive is government control of how EVERYTHING is done.

#10 MichaelC

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Posted 17 July 2011 - 10:43 AM

Steve and MG, good points both and I agree. There is no rhyme or reason to this.

#11 MichaelG

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Posted 27 July 2011 - 12:23 PM

Here's Some More Comments About This Issue From Another Forum:

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This is about Marxism, period. I realize that this sounds like hype to the uninitiated, but private enterprise is being discouraged by over-taxation, over-regulation, and over-supervision by the government right now. Why? Because private enterprise is a threat to progressive government intervention. Personal freedom is too much freedom in this case.

To add insult to injury, progressives are rewarding their high finance cronies for going along to get along with Frank/Dodd real estate financing debacle, by limiting competition. So, all this is a nod to the banking industry. Never mind that seller financing is the answer for those whom the banking industry won't finance in the first place.

So, the problem they are solving is non-existent, except that it solves a pesky problem of progressives not having control over every aspect of everyone's life, business, and finances. It's sick.

What's worse these progressive pawn off the task of imposing the regulations to a group of unelected people who are completely unaccountable to the public for what they enact. It transfers liability and responsibility away from the elected officials.

Socialists have been enacting unpopular regulations through unaccountable bureaucracies like nobody's business in Europe. In the end, the people have no real remedy for actions taken against them, other than to riot. This is what the US congress is finding as a popular solution for themselves. This gives them 3 things: Unfettered reelections, maintenance of their income, and keeps the people a.w.a.y.

Frankly, this congressional insolence, as experienced recently by the imposition of Obamacare which we learned we would, "find out what's in the bill after it is passed," thank you Nancy Pelosi, is what has given rise to the T.E.A. Party movement.

So, at this point, we either wait and see what rights we lose on, or before, January 2013, or we protest like stuck pigs. I prefer the pig route. I'm not proud.

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Would lease option be the way to go if this law is past? Being that title does not change hands till buyer exercises their option and the option coniseration is non-refundable if the buyer does not buy.

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If this regulation is established as proposed, lease/options will be the only practical option for seller financing.

Lease / options will be the next target.

The vague term "habitual" seller financier is the buggaboo here. Each state has to determine what "habitual" means in order to be able to seller finance without government interference and these ridiculous limitations (and licensing requirements).

Meantime, who would offer seller financing in the first place, if you had to go the entire 30 years, fixed interest only, regardless of the term of the underlying financing. So, yes lease options become the only option at this point (when the regulations are finally implemented as proposed).

#12 EQUITY NOTES

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Posted 28 July 2011 - 02:31 PM

Hi

The bill as it is proposed will severly limit seller financing

The Realtors will also like it due to no competition from homeowners to sell on there own

If you try to do a land contract or contract for deed as interest only for 2 - 3 yrs it is not allowed

I think goverment will go after lease options next, as it is a form of seller financing

sorry sate of affairs for investors such as us

Just my 2 cents worth 3
Tom

#13 MichaelC

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Posted 29 July 2011 - 10:49 AM

Has the bill actually passed and become law? If not, when is it scheduled for a vote?

#14 MichaelG

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Posted 29 July 2011 - 11:31 AM

Has the bill actually passed and become law? If not, when is it scheduled for a vote?

From what I understand, pretty much everything is at a standstill until the debt limit issue in Congress is resolved. Will keep checking on the status and post updates as they become available.

#15 bwalston

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Posted 05 August 2011 - 10:58 AM

Has the bill actually passed and become law? If not, when is it scheduled for a vote?

I hate to be the bearer of bad news but it already IS law. President Obama signed the Dodd-Frank Act (DFA) into law on July 21, 2010. The only question now is how (and when) it will be enacted. Title XIV (which imposes rules on mortgage originators, and is the relevant portion of the Act) will not take effect until final regulations to be issued by the CFPB go into effect. CFPB has until January 21, 2013, to issue the final regulations, and they must take effect no later than 12 months after their issuance. If CFPB misses the deadline, Title XIV takes effect anyway on January 21, 2013.

The DFA doesn't really eliminate seller financing. It only defines whether or not the seller is a mortgage originator covered by the SAFE Act. The proposed law will exempt an individual who provides financing for no more than 3 properties in any 12 month period, provided certain criteria are met. (The criteria, by the way, do NOT include the 3 year rescission and other items mentioned in the original post. Those are merely proposed interpretations.) In addition, seller financing provided for the sale of your personal residence is exempt.




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