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HR 4173 Safe Mortgage Licensing Threatening to Kill Owner Financing

Uncle SamYou 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   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:

  1. Logon to     You will see two white boxes for searching
  2. On the left box labeled “Document Type”, pull the menu down and select “proposed rules”
  3. On the right box labeled “Enter keyword or ID”, enter “safe mortgage”.   Then, press search
  4. 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.  
  5. On the right of the screen, click on “submit comment”
  6. 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.

Read more about HR 4173

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