Realtors Archives

DODD FRANK FOR TODAY’s INVESTOR

by attorney Harry Borders

PART TWO- RESTRICTIONS ON OWNER FINANCING!!!

 

           

Here’s the GOOD NEWS… Investor buyers can STILL get financing from any source they want.

 

Here’s the TERRIBLE news… Owner occupant buyers now have lots of restrictions place on who they can get a loan from.

 

These new rules impact “contract for deeds” and “Land Contracts” as well as seller retained mortgages (and, of course, the ever present contract for deed in disguise as a lease-option) and private financing. 

So, assuming an owner occupant wants to obtain a loan from a source other than  a bank or mortgage company, here are the new rules.

If the lender only lends once in a 12 month period, the lender:

a) MUST be a “natural” person (i.e. not an LLC or corporation);

b) MUST have owned the property (i.e. no private financing, only owner financing);

c) MUST NOT have built the home in the ordinary course of his/her business;

d) MUST NOT have a negative amortization;

e) MUST be for at least 5 years, and if longer and adjustable, must be tied to an index rate, such as Libor   

 

If the lender lends 2 to 3 times in a 12 month period, the lender MAY be an LLC or corporation.  But the lender also:

a) MUST have owned the property (i.e. no private financing, only owner financing);

b) MUST NOT have built the home in the ordinary course of his/her business;

c) MUST NOT have a negative amortization;

d) MUST be FULLY AMORTIZED;

e) if the rate is adjustable, it must be fixed for at least 5 years, and it must be tied to an index rate, such as Libor; and

f) MUST determine in good faith that the consumer has a reasonable ability to repay the loan (similar to what a loan officer would do).

 

If the lender lends more than 3 times in a 12 month period,

all of the above requirements for a lender lending 2 to 3 times in a 12 month period apply and

IN ADDITION, the lender MUST BE A LICENSED LOAN OFFICER.

           

As you can see, navigating the waters of seller financing has again become tricky.

Please check with your real estate attorney before embarking on a seller financing transaction for a dwelling.

 

Until next time, peace,

hCapture

Harry Borders

Harry@HarryBorders.com

502.894.9200

P.S. Your simple solution to stay out of trouble is to never offer seller financing to any tenant / buyer or owner occupant. You can use Seller Financing to sell to other Investors, not owner occupants.

It’s Absolutely FREE!

Simple, effective monthly newsletter for your Tenants

this issue emphasizes Cold Weather Tips

Click Here for Full Video/Article (Members Only)

Simple, Affordable, Air Conditioner and Heat Pump Security System

Are you sick and tired of expensive cages? Take a look at this

This is a WHOPPER!

I just got this in the mail from my state’s Realtor Association

Please Pay Close Attention – Don’t Allow Yourself To Get In This Trick Bag

This is a very powerful “eye-opener” for the licensed agent, real estate investor, who is GREEDY and tries to play both ends against the middle.

If you have your license as an agent or broker, and you wish to make money representing buyers and sellers, then wear this hat professionally for the best interest of your client(s).

If you are licensed as an agent or broker, and want to use these resources to buy and sell for your real estate investing business, then follow the law and rules properly.

It all boils down to good old fashion doing business the right way and with 100% full disclosure and document your disclosures.

Read this one and enjoy

==============================================================

Agent buys house from under client’s nose Lawsuit leads to out-of-court settlement

In a recent column, we asked if a person who serves homebuyers and sellers for a living should be held to different guidelines if they are competing to purchase a property.

For example, should the listing be exposed to the market for a certain amount of time (perhaps 48 hours) before a licensed agent can buy a home that somebody else is ready, willing and able to buy?

The question came in light of new research that revealed nearly 43 percent of all members of the National Association of REALTORS® owned at least one rental property.

The responses fell into two main pots:

  1. Readers said agents should be allowed to buy if it was in the best interest of the seller.
  2. Others who responded thought that agents should be allowed to purchase a property as soon as it is listed provided they knowingly had no other active clients who wanted the same home.

A recent Washington state case that was settled out of court (and whose financial terms remain confidential) contained that second caveat. The interesting, complicated affair included a short sale Click Here for Full Video/Article (Members Only)

Wells Fargo, one of the nation’s biggest banks and the largest consumer lender, said Wednesday that its fourth-quarter earnings rose 21 percent, helped by an improving loan portfolio and withdrawals from its capital reserves.

The bank, which is based in San Francisco, earned $3.4 billion, or 61 cents a share, in the fourth quarter, up from $2.8 billion, or 8 cents a share, in the year-earlier period, matching analysts’ forecasts. For the year, Wells Fargo reported net income of $12.36 billion in 2010, compared with $12.28 billion in 2009.
The bank’s full-year revenue fell to $85 billion, however, from $88.7 billion in 2009, as new federal regulations limited the overdraft fees that banks can charge on checking accounts.
Still, compared with the third quarter, the bank generated revenue growth in roughly two-thirds of its businesses.
“As the U.S. economy showed continued signs of improvement, our diversified model continued to perform for our stakeholders, as demonstrated by growth in loans and deposits, solid capital levels and improving credit quality,” John G. Stumpf, the bank’s chairman and chief executive, said in a statement.
Despite its heavy hand in the lending industry, which has been hit by losses for three years,

Wells Fargo has quietly emerged from the financial crisis as one of the nation’s strongest banks.
The report from Wells is an important step for the bank as it looks to increase its dividend, which has been stuck at 5 cents for nearly two years.
Wells Fargo Press Release
When the financial crisis struck, Wells, JPMorgan Chase and other industry giants cut dividends as they moved to bolster their capital. Now, two years later, banks are eager to give money back to shareholders — if the government will let them. The Federal Reserve must first complete a second round of bank stress tests, whose results are expected in March.
JPMorgan, which last week reported a $17 billion profit for 2010, has said it hopes to raise its dividend as much as a dollar in the coming months.
Wells Fargo has been more coy about its plans. Mr. Stumpf, in a conference call with investors, said he was eager to raise the dividend.
But Brian Foran, a senior bank analyst with Nomura Securities International, noted, “They historically have been cagey about saying anything before they know it.”
The bank’s dividend outlook has improved on the back of its lending operation.
Wells Fargo picked up new borrowers in the fourth quarter, particularly businesses, and it released $850 million from its reserves, thanks to the improving loan portfolio.
The bank’s provision for credit losses was cut nearly in half, to $2.99 billion in the fourth quarter from $5.91 billion a year earlier.
Shares of Wells Fargo fell 68 cents, or 2.1 percent, on Wednesday, closing at $31.81.
Although the bank’s mortgage shop reported a 19 percent drop in income from 2009, it originated $128 billion in home mortgages in the fourth quarter, up from $94 billion in the fourth quarter of 2009.
“You can see the momentum building as economic activity is returning,” said Marty Mosby, a managing director at Guggenheim Partners.
Yet Wells Fargo still faces problems surrounding its mortgage portfolio.
On Jan. 7, the highest state court in Massachusetts ruled that Wells Fargo and US Bancorp had wrongly foreclosed on two homes, because they could not prove they owned the mortgages.
Regulators in all 50 states have begun investigations into whether hundreds of thousands of foreclosures made in recent years were invalid.
Some banks temporarily suspended foreclosures last year during the controversy.
Wells Fargo officials say they have largely avoided the documentation problems and have decided not to halt foreclosures.
“At the end of the day, the litigation will be less of an impact on Wells Fargo than people fear,” said Lawrence Remmel, a partner at the law firm Pryor Cashman, where he leads the firm’s banking and financial institutions group.
Wells Fargo has also moved to distance itself from litigation over soured loans that banks securitized and sold to investors.
Fannie Mae and Freddie Mac, the government-controlled mortgage finance companies, are demanding that Wells Fargo and other big banks buy back loans sold at the height of the mortgage bubble.
In the fourth quarter, the bank recorded a $464 million provision for future mortgage repurchases, up from $370 million in third quarter.
But the bank’s chief financial officer, Howard I. Atkins, said Wednesday that Wells Fargo did not plan to settle its dispute with Fannie and Freddie. Mr. Atkins said the bank’s mortgage securities were of higher quality than those generated by its competitors.
“This is a diminishing issue, not an increasing issue,” Mr. Atkins said in an interview.
Eric Dash contributed reporting.
By Ben Protess
For more: http://nyti.ms/eP7Rd8

How You Can Access Your Computers From Anywhere For FREE!

Landlords are beginning to act more like airlines—using supply and demand to make quick adjustments to rent prices.

Long an old-fashioned bunch known for thick bundles of leasing agreements, some landlords are now using sophisticated computerized models to monitor competition, upcoming vacancies and seasonal patterns to determine optimal rent. While it’s not quite the blink-and-you’ll-miss-it tactics of airlines, rents can change quickly, sometimes day to day.

For landlords, it is about “being able to react quicker, changing your Click Here for Full Video/Article (Members Only)

The Power of Rent Talk

Rent Talk System and DVD is an absolute must for every investor and landlord. This is your New Tenant Welcome and Orientation Video. It Works!

 

 

Thanks to Nick Capra in Vegas for this very informative and interesting report.

Pass the word and share this one

—————————————————————

Hey Mike,

 The attached report is very good.

88 Page Fraud Assignment Report

(Click Above Link to View / Download)
Even more trouble is coming because, Mers conducted some of their fraudulent assignments to avoid recording fees, now local recorders all over the country are going after them as well.
 
Fraudulent recordings are also considered to be a crime committed directly against the state… so a real can of worms.
 
Now, we’ll see, with all of the hard evidence; will the government support the People, or will they find some way to let the criminals off the hook.
 
The more people that are aware of what’s going on, the harder it is for them to continue committing such blatent crimes
 
 
"…justice should not only be done, 
but should manifestly and undoubtedly 
be seen to be done." 
 
Lord Chief Justice Hewart, CJ 
 
God Bless,
Nick
 Page 1 of 6  1  2  3  4  5 » ...  Last »