Just when you thought your federal government could not get any more intrusive or stupid when it comes to over-regulating and killing the real estate market we get the latest interpretations of the Dodd Frank Act. This 2000 + page monstrosity requires an owner financing sellers to do the following:
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| Barney Frank |
1. Verify Borrower's ability to pay. In an amendment to the Truth in Lending Act Chapter 2, the Owner Finance Seller/Lender is now required by minimum standards now in place to verify and document the consumers ability to repay the loan including taxes, insurance and other assessments. And if there are multiple loans, i.e. 1st and 2nd creditor must verify and document the consumers ability to repay both loans. In doing this determination the owner/financer must include consideration of:
A) Consumer's Credit History
B) Current Income
C) Expected Income
D) Current Obligations
E) Debt-to-Income Ratio or Residual Income after non-mortgage related debt and mortgage related debt.
F) Employment Status
G) and other financial resources other than the consumers equity in the dwelling
In other words, an owner financer must become a........bank. If they do not comply they can be forced to return all payments to the borrower regardless of how much benefit the borrower received through the use of the property.
Owner Financing Killed by Dodd - Frank
From KOAT-TV.com - RIO RANCHO, N.M. -- The state’s first indoor football team has offered former NFL Pro Bowler, Terrell Owens, a contract. The New Mexico Stars made the offer a day after Owens held an audition for all 32 NFL teams and none of them showed up. The 37-year-old free agent wide receiver took part in some drills and caught passes in a showcase televised by ESPN and the NFL Network. Owens hasn’t received a reported offer from an NFL team. The New Mexico Stars will be holding the first of three open tryouts this Saturday at Rio Rancho Rams Football Stadium. Read more
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