Seller Financing Real Estate

As a result of both Acts, the definition of who is a mortgage loan originator (MLO) is much clearer; and the registration and licensing requirements plus restrictions placed on Seller Financers should prove to be more than adequate protective measures for all parties involved in the real estate transaction.

The initial immediate concerns or complaints that limitations on being able to offer seller carryback financing would tie the hands of private investors have been addressed.

Even though private mortgage transactions are now more stringently regulated via the SAFE Act and the Dodd-Frank Act, owner or seller financing remains a real and viable alternative for those buyers who can not obtain bank financing. So at the end of the day, guess what? Despite dire predictions that the efforts of meddling lawmakers would result in the end of seller financing, information gathered by reliable industry sources indicate that private parties are still selling real property by using this creative financing strategy.

Not only are these private lending arrangements still deemed safe for both Buyer and Seller, but Note Investors also still consider them as safe investments and will pay the Seller top dollar for these secured negotiable instruments.  Tip:  Consider using your IRA for real estate investing.  Buy or create private real estate notes.

So after all the "voices" were heard, private lending has not been severely handicapped. On the plus side, Seller Financers can now point potential Buyers to specific federal and state rules with which they are in compliance, as a sort of check-mark for consumer financial protection assurance. Though there are signs that the economy and in particular, the housing market may be improving, many cash-strapped buyers can not meet the eligibility requirements to obtain a bank loan. Seller financing is a viable means for them to make their dream of home ownership a reality; and there quite a few sellers who offer owner finance homes for sale.

Seller-Financing - Investopedia.com - Mortgage and real estate terminology explained.

Seller Financing: Safe Act and the Dodd-Frank Impact  - Realtor.org - A PDF summarizing the impact of these two federal laws on seller financing.

Seller Carryback, new rules for 2013 The Dodd Frank Act - Trulia.com - Informative article by Spirit Messingham, full-time licensed Realtor based in Tuscon, Arizona.

How Dodd Frank Mortgage Laws Apply to Seller Financing - NoteInvestor.com provides their understanding and insights.

As a former federal employee whose duties used to involve drafting regulations, legal rulings, policies and procedures to implement law, etc., unless the actions taken by Congress were wholly unreasonable, after people take a few deep breaths, they usually settle down, carefully examine the new rules, evaluate what the necessary changes are that they need to make in order to bring themselves into compliance, and then they do it!!

We are not all investors, but we are all consumers. NO CONSUMER = NO ECONOMY. So if you are an investor / seller financer and you had to make a few changes to follow the new rules concerning promissory notes, but you can continue to build wealth or your retirement nest egg, that's not so bad. Is it?  I'm still deciding on whether the changes deserve a Thumbs UP or a Thumbs DOWN.

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