Owner Financing rules

[Jeff Cupp]

I have been doing a ton of research on the HR1728 bill and the changes to owner financing. I am confused as to what the changes are and how to work deals to follow the new rules. I am not even sure this bill passed but from what i am seeing there were other things passed in previous bills that could effect owner financing deals.

Does anyone have any information on what has to be done now to construct a owner financed contract?

It was my understanding prior to new laws all that would have to be done is a contract with the owner to finance the property and all of this could be done between the owner and the seller. Can someone confirm or correct me on this?

[Chris Martin]

If HR1728 is the SAFE Act, I believe the NC implementation is www.ncga.state.nc.us/sessions/2009/bills/house/pdf/h1523v6.pdf The NC Commissioner of Banks (http://www.nccob.org/NCCOB/Mortgage/FAQ/General+Aim+and+Scope+of+NC+SAFE.htm) says:

[i]7. Q. Are any individuals exempt from NC SAFE’s licensure requirements for certain transactions?
d. Seller-Financing – a person who in one calendar receives no more than five residential mortgage loans as security for all or part of a purchase of a dwelling. This exemption is subject to a determination by the Department of Housing and Urban Development which may require these individuals become licensed. [/i]

I'd say don't do more than five per year. And as Bryan says, try to comply as well as you can. The state law section to see is 53-244.040 (d) 8, which is consistent with the above NCCOB reference. BTW, NC had some favorable legislation changes in the final draft to get this 5 limit exemption in the bill. NC got it right since IMO anyone doing >5 seller financed transactions (e.g. mobile home resellers) per year should be subject to the law to protect the general public.