2010 February (2)

Archive for February, 2010

HR 4173 Safe Mortgage Licensing Threatening to Kill Owner Financing

February 12th, 2010 categories: Real Estate News, Seller Financing

Uncle Sam You need to act now.

It’s an unfathomable attack on personal property rights, and will literally shut down entire sections of the real estate market . . . like we need that.

The government is poised to restrict our rights and damage an already injured economy, all in the name of ‘protecting’ us. Right. They just can’t stand the thought of people not being held captive by financial institutions, legislative bodies and Wall Street.

I feel so protected at the airport now, don’t you? The extra searches of bodies and bags really allows me to digest the pretzels a lot better.

Seller financing has long been a way to achieve desired benefits regardless of market conditions . . . this legislation will force more of us to swallow whatever climate ‘they’ (the big boys) manage to create. It tastes bad, stings the tongue, but you won’t be allowed to spit it out . . . they’ll stand there until you gulp it down, like your mother when you tried to secretly pass your split pea soup to the dog under the table.

Reminds me of Monsanto and other behemoths attempting to control our food supply. They don’t want fertile seed out there that people can harvest and use for themselves . . . they want to force farmers to come to them for sterile, genetically modified seed from year to year.

Many people will be stuck with properties they can’t sell, and many families will be unable to buy homes if this thing goes through.

Good-bye to the enlightened investors that are out there buying homes with their own cash, and carrying paper for loads of people that could never qualify for bank financing.

Or maybe this is another way to collect more taxes . . . a disguised attack on traditional strategies to preserve wealth and defer capital gains. Many people use seller financing as their primary retirement strategy. They get to defer capital gains according to the installment sale, and create hassle-free income for retirement . . . probably the government is offended if you don’t trust them to deliver your oh-so-juicy Social Security check.

OK, so I’m going to calm down now . . . those are just the thoughts that spill out when I’m not trying overly hard to be diplomatic or politically correct.

HUD has proposed to eliminate ALL seller financing unless the seller lives in the home or becomes a licensed mortgage originator. The proposed HUD Rules interpreting the federal SAFE mortgage act can be viewed at www.regulations.gov Use the search parameter “HUD” and the keyword “safe”. Please review and comment regarding the impact of this broad interpretation of the law.

Here’s what you should do . . . NOW! Don’t leave it for later,

please do it RIGHT NOW!

The deadline for comment is upon us on February 16. We desperately need thousands of real estate agents, seller finance professionals, note brokers, investors, and property sellers and buyers across the country to go on record with HUD on this issue.

PLEASE SUBMIT YOUR COMMENTS TO HUD! We have less than one week to flood this system with comments.

Follow these simple steps:

Logon to www.regulations.gov You will see two white boxes for searching
On the left box labeled “Document Type”, pull the menu down and select “proposed rules”
On the right box labeled “Enter keyword or ID”, enter “safe mortgage”. Then, press search
Locate the blue search result “FR-5271-P-01 Safe Mortgage Licensing Act: HUD Responsibilities Under ….” To read the rules, click on this title. You will be taken to another page. You will see “views”. You can click on PDF file or another symbol which will show you the rule document online.
On the right of the screen, click on “submit comment”
Complete the form providing required information and your comments and then submit

Say what you feel, but say it politely!

The message should include that you would like the definitions in the proposed rules to be changed so that private individuals can originate and service loans on properties they personally own.

Some ideas from others:

bank loans are not available on some types of properties
the tight lending climate has made bank financing “out of reach” for many
seller financing is an “age old” tradition based on private property rights
these rules would prohibit even partial seller financing – i.e. a “seller second”
according to HUD’s “Residential Finance Survey” in 2001, roughly 40% of all non-farm residential properties in the US are owned free and clear
an estimated 6 million Americans own a property other than their own primary residence
an estimated 4.5% of Americans own three or more properties, many purchased solely as investment properties
40% of non-owner occupied residences are mobile homes which are more difficult to sell with bank financing
approximately 5% of homes in US are for sale or for lease… seller financing may be key to liquidating this inventory

Please do not hesitate to follow the steps above and make your voice heard.

Free Teleseminar Tomorrow: Defer Capital Gains Without an Exchange (With Bill Exeter)

February 10th, 2010 categories: Seller Financing

exeter logo Hey, you might want to listen in on this call tomorrow . . . I highly respect and admire both Bill’s knowledge and integrity, so I’m really pleased that he’ll let me interview him about this very important topic.

With the economy the way it is, and the government policies coming down the pipeline, we need strategies to preserve wealth more than ever . . .

Who wants to personally fund the government bailouts???

Well, any more than we’re all hooked for already . . .

You’ve got to take matters into your own hands and educate yourself and your clients about all the possible ways to defer capital gains. And in the process, you’ll probably find ways to make money from the same efforts you are already engaged in as an agent, CPA, attorney, note broker, investor or owner financing consultant.

I initially met Bill Exeter 1031 Exchange a couple of years ago when he tracked me down on Active Rain. That was when I had no clue what Active Rain was . . . it was a stretch to set up a profile on Facebook in those days (and truth be told, I still pretty much suck at social networking).

Anyhow, Bill found me and invited me to be on his radio show a couple of times, talking about how people could potentially create and sell notes in order to complete 1031 exchanges.

We’ve stayed in touch and had the chance to explore other closely related business interests, and that’s the story of why he’ll be visiting with me on Thursday, February 18th, 2010.

We’ll be covering all the strategies I use to help people defer capital gains without an exchange:

Deferred Sales Trust
Installment Sale (seller financing, seller carry back notes)
Title Holding (Land) Trust

[Not that there's anything wrong with good, clean 1031 fun . . . but it's not for everyone . . . hey, that rhymes!]

To register for the call, and/or to ask questions (ask everything you ever wanted to know about capital gains but were afraid to ask) go to:

Ask Bill Exeter

and you’ll get the inside scoop of how to tune in. Yes, it’ll be recorded and available for replay for a short time afterward, but if you’re on the live call, you’ll be able to ask questions at the end.

See ya there!

Spoken by Dawn Rickabaugh | Discussion: No Comments »

Owner Financing is Great, But the Buyer’s Low Credit Score Can Wipe Out Opportunities

February 2nd, 2010 categories: Real Estate News, Seller Financing

7 Steps to 720 Credit I’m just about to close a note deal where the Buyer’s/Payor’s credit score is below 600. Why can I even work with this thing? Because there was 10% down, there is almost 3 years of seasoning, and we’re only buying a partial, which keeps the risk acceptably low.

What if the Payors had credit scores over 700? Ka-ching . . .

The note holder/seller would be pocketing several thousand dollars more if they had been helping their Payors improve their credit scores over the last several months before trying to sell their note.

Lots of people have credit scores that have really taken a beating in the last couple of years. That won’t stop them from buying property with owner financing, but with better credit scores, they could grealy expand their opportunities for buying because prospective sellers would have notes they would feel good about holding or selling.

The whole credit scoring system is a just a game, but if you don’t know the rules, you can’t possibly hope to win, and it will cost you money and lost opportunities.

I’ve recently become friends with a guy who is making a profound difference by helping people quickly and dramatically improve their credit scores, even if they have foreclosures, short sales or bankruptcies on their record. His name is Phil Tirone, and I’ve asked him to be a guest blogger.

My guess is that he’ll get something to me next week, so stay tuned. If you fit in any of these categories, you REALLY need to pay attention to his message:

buyers (even if you’re buying with seller financing, a higher credit score will dramatically increase the numbers and types of properties you can buy)
sellers who are thinking of carrying paper for a buyer(s) with poor credit
note holders who are preparing to sell all or part of their note

In the meantime, feel free to check him out at 7 Steps to a 720 Credit Score. He’s written a book you’ll really want to get a hold of.