My Question Mike:
I’m sure you’re aware of the new "Safe Act" that requires investors like me, who finance the purchasers of properties we sell, to get a Mortgage Brokers License and a Mortgage Lenders License with all the bureaucracy that goes along with it.
Do you have a "work-around" to avoid this "all-too-intrusive" and absurd law? Note that we own our properties free and clear at the time we sell them.
Great question Ron!
Quote From The SAFE ACT.
The maximum amount of penalty for each act or omission described in paragraph (a) of this section shall be $25,000.
HUD is poised to take away our rights to offer owner or seller financing on property we own.
Under the Safe Mortgage Act proposal, you can only offer owner financing on the home you live in one time every 3 years or you must become a licensed mortgage originator.
The SAFE Act is always lurking in the background. It is an ugly law for consumers and investors. The sole intent and purpose of this law is to protect consumers from predatory lenders. There are so many proposed procedures, many of which are being handed down to each state to handle all of the details.
Your ultimate and final answer Ron will be your state’s implementation of this insane law.
Watch for an upcoming Mike’s Mondays on this very topic with my real estate investor expert attorney Harry Borders.
Here are some links if you wish to dig around yourself. I have included the hud page for the SAFE Act and some more.
(Item F Page 66551 of the HUD Summary Comments).
The HUD proposals under the Safe Act are all part of the fall out
from the failed lending institutions and related to HR 1728 and HR 4173.
While working my full time job as an undercover police detective, I had the opportunity to see a lot of things “behind closed doors.” One of the most powerful phrases most investors and Americans do NOT understand is the title of this short article. I can not tell you how many folks, after being arrested for a crime, would say “I did not know that was against the law.”
With the help of media and lenders and our economic market today, the word “real estate” has transformed into an almost bad word. In fact, many consumers are looking for ways to “get back” or get even, or sue the very folks who helped them graduate into homeownership. This means me and you have huge targets on our backs.
Be very careful in today’s real estate market. Always use the proper disclosures and always do things the right way, the professional way.
PROTECT YOURSELF NOW! Remember this powerful phrase.
Here’s some simple no-brainer tips and red flags to avoid as a real estate investor.
- NEVER Buy using a Quit Claim Deed
- NEVER do “kitchen table closings.”
- ALWAYS use a “GOOD and REPUTABLE” real estate attorney or title company.
- ALWAYS buy Title Insurance when you are buying an investment property.
- If you are selling a property and you want to sell it real bad…. Be very careful about what you do to help your seller. Many times a loan officer or loan broker will ask a Seller to prepare another form or they may ask you to just sign this form and they’ll say “We Do This All The Time.” If you hear this phrase, you might want to run. (Remember, ignorance of the law is not a get out of jail free card.)
- AVOID buying using a “Contract for Deed, Land Contract, or Agreement for Deed.” Once again, always have a professional full blown closing with a real estate expert attorney or title company. (It is ok for you to sell on Land Contract or Contract for Deed)
- Some common schemes seen by IRS criminal investigators include:
- “Property Flipping” — A buyer pays a low price for property, then resells it quickly for a much higher price. While this may be legal, when it involves false statements to a lender who is regulated by the feds, it is not. (Now do you really want to say you are a “FLIPPER” or you “FLIP” Properties… the new F word.)
- Now there are new federal rules and guidelines making it a "federal crime" to flip a property owned or secured with a government loan. Yes, it is true and it took effect on April 12.
- Two Sets of Settlement Statements — FOLKS, This is FRAUD!
- Fraudulent Qualifications — Some “professionals” assist buyers who would not otherwise qualify by fabricating their employment history or credit record.
Happy Hunting and watch out for these Red Flags of Fraud.
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