Federal House Bill HR 1728 - Could it be the death of seller financing for real estate investors?

The Mortgage Reform and Anti-Predatory Lending Act HR 1728. Sounds good - who wants predatory lenders anyway? The big problem is that this bill prohibits seller financing more than once every 3 years unless the seller gets a mortgage license. What???

This includes seller financing, 2nd mortgages, wrap around mortgages, agreements for deed, and contracts for deed. Even if they do get licensed, there are a bunch of extra hoops and disclosures necessary which may end up killing the deal anyway. A lot of people (including myself) use seller financing as a form of residual income and retirement income. This is a federal bill, so the law would effect every real estate transaction throughout the United States.

HR 1728 has already been PASSED by the U.S. House of Representatives and is headed to the Senate now. Here is the official site to get the full details on the bill. A companion bill in the Senate has not been submitted yet, but I have heard that it is in the works already.

You can also read up on some other people's comments on HR 1728.

NoteInvestor.com

OpenCongress.org

Lenn Harley

National Real Estate Investors Association NAREIA (bottom of the page)

National Association of Realtors (middle of the page). They seem more oblivious to the seller financing issue than anything.

To me this type of restriction on seller financing is simply un-American. Seller financing is a basic right in a real estate transaction in my opinion, and so many investors are using these creative tactics right now. You almost have to be thinking creatively to get deals done anymore in this crazy economy.

It is important to contact both of your Senators (yes you have 2 of them) immediately and let them know you want seller financing exempted from this bill. Otherwise it will be a massive loss to private property rights without any compensation to you.

If you aren't sure who your Senator is, you can check out the Senate's website.

I'm hoping to pay a visit to Florida Senator Mel Martinez's office this week along with a small group from Central Florida Realty Investors Association to let him know our concerns over this proposed legislation. I strongly suggest that you write, email, or call your Senator right away and tell them to exempt seller financing from the Senate version of the bill.

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Rob Arnold - Your full service and investor friendly Realtor ® in Orlando and Central Florida.

ABR, CPL, CRB, CSP, GRI, Managing real estate broker, Notary Public

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