Tony, I do not think you are on our newsletter subscription list, so I’m
sorry for leaving it as I did. The current free issue briefly covers the
option and the paid newsletter goes into quite a bit of detail.
Basically, a “properly trained” mortgage originating company can serve
as a shield from the SAFE Act in many states where existing state law
permits it. That does not relieve the lender from compliance with other
state and federal laws, but it does relieve them of SAFE Act licensing.
Our organization has begun to make offers to state MH associations to
provide the “proper training” for MLOs under the aegis of the state
association in states where this will work and several are planning it
right now, others are working on it, so it seems likely there will be
many sources of relief for the small owner by the end of the year.
To try to explain everything here would be pretty complex and time
consuming so I am not going to attempt that for several reasons. As we
have in the past, we will consider speaking at MOM meetings for no
charge, except now on this subject.
The point is, as I wrote in the original post, there is a clear cut and legal
method that is cost effective for small operators to deal with the SAFE
Act, and it was clearly stated in the Final Rule, which is more than I can
say for RTO,LTO, and LO.
Over on the main board there’s a post about a new law that would basically stop all seller financing. If I understand it correctly. With the SAFE ACT and now this I wonder when the feds are going to come after those evil Land Lords and make it almost impossible to rent. Or maybe with less people able to buy a house it could make for more potential renters.
The SAFE Act was intended to include seller finance from the day it was
written, and the Final Rule has not changed that intention. Regardless
of how challenged someone may feel, or how they view government,
the intent was, and is, to regulate people and entities that engage in
making loans to consumers. The authors of the SAFE Act were aware of
seller financing and had every intention of regulating it. The Final Rule
affirms that fact.
All of that said, the Final Rule has created a terrific new option for
small operators that will relieve them of the great majority of their
problems in states that do not require a consumer lending license to
service or collect loans. Small operators should be rejoicing, not
thinking they are going out of business.
Posted by Tony Colella on July 15, 2011 at 07:22:29:
I would have to believe that this would create a sea of renters which I suspect was the opposite intent of the act (imagine that).
It appears that the limiting of private mortgages only increases the reliance upon banks and taken a step forward we see many, many small banks burdened by new restrictions that they are quietly forced to be gobbled up by larger banks (creating fewer banks). Would it not seem logical that fewer banks means the remaining banks are by defn “too big to fail?” Didn’t we learn that lesson the hard way already?
I have recently run into quite a few tenants who would love to buy a land/home property from me and could probably afford it based upon their income but they admit that they would not qualify for bank financing and their only way to buy is through private, seller carry back financing. If we eliminate this option then they will have to remain renters. With the curtailed lending we now see it only appears logical to me that their will be more and more who share this same perdicament.
Posted by Tony Colella on July 18, 2011 at 16:11:47:
Ken,
Would you mind expanding on your last paragraph of thought:
“All of that said, the Final Rule has created a terrific new option for
small operators that will relieve them of the great majority of their
problems in states that do not require a consumer lending license to
service or collect loans. Small operators should be rejoicing, not
thinking they are going out of business”
Since I do not lend or do lonnie deals I have not followed the SAFE act issue closely but have spoken with many who have over time but much was still then unknown.
Posted by Dr. B (OH) on July 17, 2011 at 15:43:49:
I heard a prediction a few years ago that by 2020 there will only be about 10 banks in the world. Makes sense to me. It would be much easier for the Governments to control the money flow with fewer banks. But, duh governments, the banks will be powerful enough to control politics and policies.
Whatever, I’m just working on my own micro-economy, The world’s economy will fall into place in the next 400 million yrs.