S.A.F.E. Act - What?? only in TX??

Question

alright guys, I've been hearing a lot about the new SAFE act that's come out and I don't know if it's only in Texas or nationwide.

From my understanding, it effects sellers who are interested in seller financing their house (my attorney says it also includes rent-to-own transactions) and the need to use a licensed mortgage broker to originate the loan. I'm looking for more feedback from the BP crew.

Our local REIA has come up with a quick fix where an investor friendly mortgage broker originates the loan on the cheap and that apparently solves the problem. I wasn't very concerned with this until my private money lender told me they were putting a halt on financing until they have the answers. How it effects their lending, I do not know, but I need to get more info asap.

Thanks in advance

Tom Bukacek · Answer

Randal- correct. This information has been verified by Doug Foster, commissioner of the TDSML. The purpose of the Aug 31 postponement is to convince HUD that Texas's existing rules on owner financing is effective enough. I will go through an RMLO to do the paperwork to ensure accuracy and compliance, but am glad I can at least negotiate rates and terms with the buyer. That part was just plain ridiculous.

Bryan Hancock · Answer

What was your private money lender's main point of contention with respect to lending?

Randal McLeaird · Answer

ok, got an email from my private money guys who suspended lending until they got more answers. They've started lending again based on the following link http://www.sml.state.tx.us/tdsml_important_information.html#safe_nmlsr click on the second link that refers to seller financing

Nancy Z · Answer

I am trying to navigate around this website. I came across it Friday because I found out about this SAFE act. Crazy! All I want to do is offer seller financing for my deceased mother's house because of bad market in Fort Worth. I have studied RE investing but am pursuing other things now. I can't find the articles you have mentioned here. Maybe you'll could send me in the proper direction. I am sick of the govt. interfering in all aspects of our lives. I was a mortgage loan officer back in the 80's, lots simpler back then. So, does the SAFE act pertain to seller financing of a relatives home?? Thanks!

Randal McLeaird · Answer

guys, I just got this email regarding the SAFE act in Texas: Many of us have been very concerned about the implementation of federal legislation known as the SAFE Act that would severely limit an individualâ€™s ability to seller finance their property in Texas. We are working on numerous regulatory and legislative solutions to this affront to private-property owners, and have some good news to report. At our urging, the chief regulator over the SAFE Act in Texas, the commissioner of the Texas Department of Savings and Mortgage Lending, has taken significant steps to allow Texas property owners to continue to seller finance up to five transactions in a 12-month period. More specifically, the commissioner has delayed the implementation of the SAFE Act requirement for licensure in seller-financed transactions in Texas until August 31. This will give us time to implement regulatory and legislative changes during the coming months. For now it is important for you to know that the long-standing law of allowing a Texas seller to finance up to five transactions in a consecutive 12-month period is still in effect and the Texas Association of REALTORSÂ® will continue to work at the federal and state level to see that this is a permanent solution. Finally, this action would not have happened if not for the thousands of Texas REALTORSÂ® who participated in our grassroots efforts to correct this abuse to private-property owners in Texas. Your actions do make a difference. Sincerely, Bill Jones 2010 Chairman of the Board

Bryan Hancock · Answer

http://www.biggerpockets.com/blogs/1123/blog_posts/7193-the-safe-act-how-it-applies-to-texas

Bill Gulley · Answer

Hi, the SAFE Act is national, it's federal law. States will be in the driver's seat with their mandates and if states don't cover the intent of the Act, the feds (Hud) can move in and enforce the issues. So, Tom, please post here what you found out in Texas! How is Texas doin it? Thanks, Bill

Tom Bukacek · Answer

Randal- PM me for more info. Also there is a post on the BP Blogs about my meeting with the TDSML. This should answer quite a few of your questions.

Bryan Hancock · Answer

See my long reply here: http://www.biggerpockets.com/forums/30/topics/50054-safe-act-questions There has been guidance from TDSML lately claiming that they aren't going to enforce things as stringently as originally anticipated. My business partner Tom attended the meeting in Dallas so he can likely fill in the details from the horse's mouth.