LMLO for Seller Financing

[Kim Tucker]

Wanted to get input from other seller financing people and mortgage brokers

I know many people who are out there offering properties with Seller Financing and some how getting around all the rules and regulations of Safe Act and Dodd Frank.  And that the Seller Finance Coalition is trying to get the rules changed so we don't have to at least have a LMLO for the first 25 properties or so . . . but either way, we still need to comply with all the rules, whether we know them or not.

My mentor has suggested if we offer seller financing to owner occupants to hire an Licensed Mortgage Loan Officer, but that has turned out to be next to impossible.  Unless we just want to skirt the rules, which I don't want to do particularly.

A friend of mine is in Mortgage compliance and I asked her why a Mortgage Company would not be able to offer lending to our seller financed buyers following our guide lines instead of say Fannie Mae's and then sell the loan to us.  And her response was that we don't as individual seller financing investors have a structured written program to follow - one that says here are my minimums to do a loan, here is where my base rate comes from and these are my changes to that base rate based on certain loan and borrower characteristics.  So the mortgage companies don't want to touch us.

She has put together a loan matrix for me and found a mortgage company that may work with us.  We are trying to figure out if other seller financing investors might have an interest in developing their own "loan program" and if other mortgage companies might be interested in working with her and her seller finance sellers - again she is in loan compliance and can help create the program and help us make sure that we follow the rules and have a loan that the ambulance chasers can't disqualify.

We are not sure how she could be compensated.  I thought maybe she could create a do it yourself loan matrix, loan standards program and sell it for a fee.  Or charge a fee to review all documents to make sure the are in compliance.  And of course the loan officer is going to want to be paid, just as if we were Wells Fargo or Bank of America.

Anyone have any input?