HUD Proposes Seller Financing Rules
Elimination of Owner Carry Mortgages Disastrous
Attention all real estate investors! HUD is proposing to eliminate ALL seller financing with two lame exceptions:
- Seller lives in the home, or
- Seller becomes a licensed mortgage originator
Passed last year, the federal SAFE mortgage act passed last year preserved the right for sellers to make up to five seller financing transactions per year without needing a mortgage originator license. But that law was passed subject to HUD’s approval as “compliant” with the intention of the federal law. This means that, for those states which do not have a ‘compliant law’, the SAFE act allows HUD to implement licensing for those states. HUD has since issued proposed rules which would no longer allow seller financing for non-owner occupied homes. This is a disaster for real estate investors trying to capitalize on the high-inventory and poor lending environment we currently face!
HUD is soliciting comments on these proposals and the Deadline for filing Comments is February 16, 2010.
Please contribute and do your part to help our industry comment to HUD on this issue. Efforts to affect this law will not be successful unless thousands of individual investors communicate that we are opposed to this the rules. Please submit your comments to HUD today, here are the links:
To read the proposed rules, go here – http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480a6b033
To file your comment, go here – http://www.regulations.gov/search/Regs/home.html#submitComment?R=0900006480a6b033
and fill out the form.
Here are some sample message to relay to HUD:
- Mortgage bank loans are not available on many types of properties today
- The current lending climate has made traditional bank financing impossible for some borrowers
- Seller carry financing is a solid way to help the housing industry recover
- These rules would prohibit even partial seller financing – e.g., a “owner carry second”
- Many investors own a property free and clear and would like to get interest on their investment
- Million of Americans own a property other than a primary residence
- Mobile homes are more difficult to sell with bank financing, and there are LOTS of them
Please comment TODAY and help our industry. It only takes 5 minutes.
