On July 21, 2010, the Wall Street Reform and Consumer Protection Act, H.R 4173 was signed into law by President Barrack Obama. According to the U.S. Chamber of Commerce in Washington, the act will require federal agencies to develop 520 rules, conduct 81 studies and issue 93 reports.
The Treasury Department will have to set up a Federal Insurance Office while the Federal Reserve Bureau will form a Consumer Financial Protection Bureau, which will include an Office of Financial Protection for Older Americans and an Office of Financial Literacy. Other reforms created by the legislation will impact bank and hedge fund regulation and formation of the Financial Stability Oversight Council.
The revised version of H.R. 4173 includes some improvements over the initial version challenged by the National Real Estate investor Association, the National Association of Realtors, and you our readers; members of the real estate investing community and property owners across the country. Rather than limiting seller financing to a single transaction every 36 months, the version signed into law allows for up to three seller-financed transactions in a twelve-month period. There are a number of requirements that must be adhered to. American property rights are still under attack and it is incumbent on every citizen to continue to voice our concerns and remain ever vigilant.
The key element affecting property owners who seek to assist homebuyers by providing seller financing is section 103 (2) E in the definition of Mortgage Originator. Mortgage Originators, under the Residential Mortgage Origination Standards section of Subtitle A, “does not include, with respect to a residential mortgage loan, a person, estate, or trust that provides mortgage financing for the sale of 3 properties in any 12-month period to purchasers of such properties, each of which is owned by such person, estate, or trust and serves as security for the loan, provided that such loan—
‘‘(i) is not made by a person, estate, or trust that has constructed, or acted as a contractor for the construction of, a residence on the property in the ordinary course of business of such person, estate, or trust;
‘‘(ii) is fully amortizing;H. R. 4173—763
‘‘(iii) is with respect to a sale for which the seller determines in good faith and documents that the buyer has a reasonable ability to repay the loan;
‘‘(iv) has a fixed rate or an adjustable rate that is adjustable after 5 or more years, subject to reason- able annual and lifetime limitations on interest rate increases; and
‘‘(v) meets any other criteria the Board may prescribe;”
In addition to the three transactions per year limitation we must be watchful of E(v), “meets any other criteria the Board may prescribe. That gives the Board carte blanche to make changes without the will of the people being considered. These are not people that can be voted out of office, they are political appointees. We came very close to losing control of our own property with this legislation. As it is our rights have been diminished and many people’s futures jeopardized.
What do you think? I’d love to hear your opinion?