YOUR HELP NEEDED! New Attack On Seller Mortgages
Published: Mon, 10/08/12
Ric Thom, President of Security Escrow (www.securityescrow.com,
www.securityescrownews.com) has just alerted me to the following.
Seller financing is under attack again and your comments are needed
immediately.
We have an Oct. 16th deadline to act.
In July 2011 the Federal Reserve asked for comments on Dodd-Frank
amending the Truth-in-Lending Act (TILA). At that time we were all
concerned they were going to require property owners who offered
seller financing to prove the buyer's ability to repay.
Everyone rallied, sent comments and the Federal Reserve responded
favorably.
It worked with the Federal Reserve, but regulatory authority
over the TILA has been moved to the new Consumer Financial
Protection Bureau (CFPB), and it is proposing restrictions
on seller financing that few property owners will like.
We all need to write comments to the CFPB by Oct. 16 explaining why
thisproposed rule would basically destroy seller financing which in
turn takes away the opportunity for a segment of the American
population to purchase a home.
CFPB is proposing a rule that not only limits seller financing
transactions on dwellings to three per year, but the property
seller must also comply with the following restrictions:
- The seller has to verify and document the buyer's
ability to repay the installment sale using the same criteria
mortgage loan originators (MLOs) and banks are required to use.
This is the same criteria that are required under the controversial
Qualified Mortgage definition. If the seller does not qualify the
buyer the fines are the same as they are for MLOS and banks.
- The buyer and seller are not allowed to negotiate a
balloon payment. The installment sale cannot negatively amortize,
nor can you have an interest-only installment sale.
- Furthermore, the installment sale has to have a fixed
interest rate for the first five years before the interest rate can
increase.
I have provided links to the proposed TILA rule and a link where
you can send your comments.
You can read Ric Thom's comments to the CFPB at
http://papersourceonline.com/blog-articles/ (scroll down).
Comments must be received no later than October 16, 2012.
Please forward this e-mail to others who believe in the right
to private property..
Visit www.regulations.gov to submit your comments.
The Truth in Lending Act (Regulation Z); Loan Originator
Compensation 36(a)-1.v (seller financing) can be found at:
http://tinyurl.com/9d2xy6m
PLEASE SEND YOUR COMMENTS TO WWW.REGULATIONS.GOV TODAY!