FIXING DODD-FRANK/SELLER FINANCING

[Bill Gulley]

I'd like to get ideas from BP members on the topic of seller financing under the new laws.

Not looking for smart comments from several we already know don't like the changes but here's the fact:

It's the law and we need to follow it.

The CFPB is accepting comments from the public. I'd think it would be naive on our part to think that any regulator dealing with this issue would not be aware of the largest RE investor site on the internet, don't you?

I have kept saying "prudent lending practices" I realize about 5% here understand what that is, we can touch on that later.

But where do you feel you could actively participate in:

1. Gathering supporting documents and information for extending credit. We will assume you'd have a list of documents and simple instructions.

2. How important is a balloon payment to a seller in 3 years, in 5 years and 7 years. There may be some acceptable ways to ensure the ability to meet such requirements.

3. Would you use a standard note and deed of trust or mortgage if one existed?

4. Would you use a standard Lease-Option allowing the option price to be financed if one existed?

5. Would you agree to use a mortgage servicing company, your choice as to who?

6. Would you be willing to (or pay the servicing company or split servicing fees under certain circumstances with a borrower) to complete an annual report of payments and loan activity to be held on file?

7. Would you be willing to attend a class of instruction of 20 hours supervised by the state and pay a fee similar to that of a real estate agent?

8. Would you be willing to obtain a license for RE dealers similar to that of an RE agent?

9. How many RE financing deals would you really expect to do as a seller or buyer?

10. As a seller/lender, would you agree to LTV and CLTV requirements or an equity amount established by a borrower to extend or modify any obligation under certain default instances that would be reasonable and that would require performance of a borrower?

What are your real concerns? Be reasonable keeping in mind the reasoning behind all the changes. Constructive input.

I'd be interest in compiling the information and supporting suggestions for modifications and exemptions that may be allowed by the CFPB.

The BP community could have thousands of justifications and in support to allow modifications, I'm sure that big brother will listen if requests are reasonable, keep within the purpose of the law, place sufficient safeguards in business to be conducted and that can be managed or overseen with little or no additional costs.

Any takers? Any suggestions? I'd like to see an attempt at some constructive measures rather than folks crying about, and trying to circumvent, the laws.