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Dear Fellow Investor:
I don't know if you've heard about HR 1728,
but it's a heinous infringement on private property rights that is likely to
shut down the creative selling market. IT HAS ALREADY PASSED THE HOUSE AND IS
UNDER CONSIDERATION BY THE SENATE NOW. We have attached an article about it, we
need massive action on this immediately to stop it. Contact your Senators and
let them know that this bill in its current form is an infringement of your
private property rights. We have included sample letters/emails that you should
send today to let your voice be heard!
Read on...
House Bill 1787-Why it's Death to Your
Business and What to Do About it.
The U.S. Senate is considering a bill that would severely limit the way
you do business as a creative investor and, more importantly, is an inexcusable
infringement of the property rights of all Americans.
HR 1728, which you can view in its entirety here: http://www.govtrack.us/congress/bill.xpd?bill=h111-1728
deals with a plethora of
mortgage-related issues, mostly around limited terms and fees on residential
loans. But the heinous piece of the legislation is in section 101(3)(e), which
defines the affected principals as:
'(E) does not include, with respect to a
residential mortgage loan, a person, estate, or trust that provides mortgage
financing for the sale of 1 property in any 36-month period, provided that such
loan-
(i) is fully
amortizing;
(ii) 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;
(iii) has a fixed rate or an adjustable
rate that is adjustable after 5 or more years, subject to reasonable annual and
lifetime limitations on interest rate increases; and
(iv) meets any other criteria the Federal banking agencies may
prescribe; and
Yeah, we know, confusing. But here's what it says: you are NOT subject
to the law as long as you DON'T sell more than 1 property with owner financing
every 3 years! Or, to put it another way, you ARE subject to the limitations of
the law if you DO sell more than one property every 3 years via a land
contract, owner-held mortgage or wrap-around mortgage-and who knows if they'll
define lease/options as owner financing, too?
So what does it mean to be "subject to the law"? Well, at the
very least, it means that you will have to comply with a long, confusing, and penalty-filled
piece of national legislation. Here are the types of transactions that you
would be restricted from doing more than once every 36 months:
·
Selling YOUR OWN HOME using a land
contract or owner-held mortgage so that you can get a quicker sale, higher sale
price, or better rate of interest than is available in other investments
·
Carrying back owner-held second
mortgages on investment properties that you sell
·
Doing any kind of installment sale
on residential properties including homes, condos, mobile homes, and even raw
land that is zoned residential
Yes, there will undoubtedly by ways to
"get around it"-some have suggested that getting a mortgage broker's
license and then learning and following the vast new set of regulations would
circumvent the "problem". But bottom line is, this law has to be
stopped and it has to be stopped NOW. Here's why:
1. Congress is trying to regulate the wrong
thing. The deals we make are not "loans"-they don't involve the
transfer of money, or points or closing costs or adjustable rates or any of the
other things that caused the mortgage crisis to begin with. They are
INSTALLMENT SALES. We don't give money to the "borrower" and wait for
it to be paid back: we give a property to the borrower and wait for it to be
paid off. Regulating this will have no effect on the foreclosure crisis
2. It is a completely unacceptable
infringement on private property rights. When I own a piece of property and
find a ready, willing, and able purchaser, I should be able to control the sale
of that property within the existing laws of my state, which already regulate
the interest rate that I am able to charge and some of the terms of the sale.
The government does not have the right to tell us that we need special
licensing to sell our own properties; nor do they have the right to further
regulate the terms under which we can sell or burden small investors with a new
set of rules that we can't comply with.
Not only will this new law, if passed as
written, effectively choke off owner financing as an exit strategy for you, it
will also take away housing choice for your buyers. The millions of Americans
who've been through foreclosure in the last 3 years can't buy a house in any
way OTHER THAN to negotiate owner financing with a seller-and HR 1728 would
greatly reduce the number of properties available in this way. Millions of
potential home owners who would otherwise be able to re-start the process of
paying off a home, and get the tax advantages of ownership, will be reduced to
renting until they are able to qualify for bank financing.
What to Do Right Now
This bill has already passed the house and is waiting for Senate
approval. Please contact your senator via email and snail mail to let him know
that this law MUST NOT PASS in its current form. You can get your senator's
contact information here:
http://www.senate.gov/general/contact_information/senators_cfm.cfm
As always in cases like this, you have an automatic handicap to
overcome-the fact that you are a real estate investor and are therefore viewed
as part of the problem. So when you write, don't emphasize the nature of your
business, just that you and your buyers would be greatly aversely affected by
the new law.
We need THOUSANDS of these communications
to go out in the next few days to have a CHANCE of stopping this in its tracks.
So whether you're a new or experienced investor, PLEASE take the time right now
to write your elected representative!
Here are some sample letters or emails
IF YOU HAVE A REAL ESTATE LICENSE
Dear Senator [name];
My name is (insert name here) and I am a life-long resident of (insert
city name here).
I am writing you to encourage you to vote NO on HR 1728, the
"Mortgage Reform and Anti-Predatory Lending Act".
While many of the provisions of the act are positive steps toward
mortgage reform, the inclusion of private owners in the act (see section
101(3)(e)) will enormously reduce the housing choice of North Carolinians and
the ability of home owners to sell properties in this already-slow market.
As a real estate broker, I have seen
several dozen cases in the past year of
home sellers and buyers coming to an agreement for an installment sale on a
property that the owner desperately needed to sell (often to avoid foreclosure)
and the buyer desperately wanted to buy, but could not raise the downpayment needed for conventional financing.
In all cases, these sales turned out to be win-win deals for the buyer
and seller; the seller was able to get rid of an unwanted property to a buyer
who loved it, and the buyer was able to get his new home at an affordable
payment and interest rates with none of the usual costs (points, application
fees etc) inherent in more conventional mortgage transactions.
In defense of private property rights, owners should be exempted from
the burdensome and unnecessary rules that this law foists upon them. In its
current form, it would all but shut off the "owner financing" market
that is the only way that many sellers can sell and many buyers can buy right
now.
PLEASE DO NOT LET THIS RESTRICTION ON
PRIVATE PROPERTY RIGHTS PASS THE SENATE. It is unnecessary to stop private
buyers and sellers from transacting business that is beneficial to both of
them-they are not the problem that the bill seeks to solve. HR 1728 would be
extremely harmful to thousands of your constituents.
It will exacerbate the problem OF
foreclosure, as fewer sellers will be able to sell their homes to avoid it, and
CAUSED BY foreclosure, as fewer buyers who have recently experienced
foreclosure will be able to re-start the process of home ownership
inexpensively and easily by negotiating owner financing.
Thank you for your consideration;
Insert Name
Licensed Real Estate Broker license #
Phone #
email
`````````````````````````````````
IF YOU SELL HOUSES WITH OWNER FINANCING
Dear Senator [name];
My name is (insert name here) and I am a life-long resident of (insert
city name here).
I am writing you to encourage you to vote NO on HR 1728, the
"Mortgage Reform and Anti-Predatory Lending Act".
While many of the provisions of the act are positive steps toward
mortgage reform, the inclusion of private owners in the act (see section
101(3)(e)) will enormously reduce the housing choice of North Carolinians and
the ability of home owners to sell properties in this already-slow market.
As a professional housing provider, I sell several houses each year to
home buyers on installment sale [or, if you have not purchased a property, add
here: "I had planned to sell several houses this year on installment
sale]-a practice that would become impossible under this law in its current
form.
I find that in today's slow market, the best way for me to help buyers who
desperately want to become homeowners, but who cannot raise the downpayment or meet the other terms needed for conventional
financing, is to allow them to make payments directly to me.
These sales are win-win deals for both the buyer and myself; I am able
to turn over homes that I've bought and rehabbed (often from foreclosures) to
buyers who love and can afford them, and the buyer can get his new home at an
affordable payment and interest rates with none of the usual costs (points,
application fees etc) inherent in more conventional mortgage transactions.
Without the ability to sell homes in this way, I will no longer be able
to invest in and renovate any of the tens of thousands of vacant, ugly houses
placed on the market by the foreclosure crisis, and my small-but-beneficial
business will literally be in ruins. Perhaps more importantly, the
homeowner-buyers that I serve will be forced to rent rather than moving toward
the American dream of home ownership.
In defense of private property rights,
owners should be exempted from the burdensome and unnecessary rules that this
law foists upon them. In its current form, it would all but shut off the
"owner financing" market that is the only way that many sellers can
sell and many buyers can buy right now.
PLEASE DO NOT LET THIS RESTRICTION ON
PRIVATE PROPERTY RIGHTS PASS THE SENATE. It is unnecessary to stop private
buyers and sellers from transacting business that is beneficial to both of
them-they are not the problem that the bill seeks to solve. HR 1728 would be
extremely harmful to thousands of your constituents.
It will exacerbate the problem OF
foreclosure, as fewer sellers will be able to sell their homes to avoid it, and
CAUSED BY foreclosure, as fewer buyers who have recently experienced
foreclosure will be able to re-start the process of home ownership
inexpensively and easily by negotiating owner financing.
Thank you for your consideration;
Insert Name
Perfect Properties, inc.
Phone number
email
```````````````````````````````
IF YOU BUY HOUSES WITH OWNER FINANCING
Dear Senator [name];
My name is (insert name here) and I am a life-long resident of (insert
city name here).
I am writing you to encourage you to vote NO on HR 1728, the
"Mortgage Reform and Anti-Predatory Lending Act".
While many of the provisions of the act are positive steps toward
mortgage reform, the inclusion of private owners in the act (see section
101(3)(e)) will enormously reduce the housing choice of North Carolinians and
the ability of home owners to sell properties in this already-slow market.
In the past year, I have purchased and renovated several homes-made
possible only because the sellers of
these homes were able to sell to me using owner financing in an unrestricted
way.
For many of these property owners, seller financing was the only way to
unburden themselves of an unwanted property that, in some cases, was headed
toward foreclosure before I purchased it.
Without this ability, I can not continue to buy and renovate properties
in the neighborhoods that so need me and my colleagues to invest our time,
energy, and money in rehabbing properties.
Bank financing is not an option for these properties because of the
condition; only financing carried by the sellers will suffice.
Section 101(3)(e) would keep my sellers from utilizing this method of
getting rid of unwanted properties in today's market, should they have more
than 1 to sell.
In defense of private property rights,
owners should be exempted from the burdensome and unnecessary rules that this
law foists upon them. In its current form, it would all but shut off the
"owner financing" market that is the only way that many sellers can
sell and many buyers can buy right now.
PLEASE DO NOT LET THIS RESTRICTION ON
PRIVATE PROPERTY RIGHTS PASS THE SENATE. It is unnecessary to stop private
buyers and sellers from transacting business that is beneficial to both of
them-they are not the problem that the bill seeks to solve. HR 1728 would be
extremely harmful to thousands of your constituents.
It will exacerbate the problem OF
foreclosure, as fewer sellers will be able to sell their homes to avoid it, and
CAUSED BY foreclosure, as fewer buyers who have recently experienced
foreclosure will be able to re-start the process of home ownership
inexpensively and easily by negotiating owner financing.
Thank you for your consideration;
Insert Name
Perfect Properties, inc.
Phone number
email
````````````````````````````
Eddie Burroughs; CFCO
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