DEFINITION OF "RESIDENTIAL MORTGAGE TRANSACTION"
United States Code: Title 15,1602. Definitions and rules of construction LII / Legal Information Institute
Monday, May 16, 2011
Sunday, May 15, 2011
WE WILL LOSE OUR JOBS IF DODD-FRANK ACT IS IMPLEMENTED
JOIN US IN THIS FIGHT TO SAVE HARD MONEY ON RESIDENTIAL PROPERTIES!!
To All Mortgage Brokers Who Lend Hard Money on Residential Properties,
and To All Customers Who Ask For Money From Hard Money Lenders:
So, to all of the mortgage brokers that are lending on residential property, and who follow RESPA, TILA, MIDA, HOEPA, and the SAFE ACT, to all of those hard money lenders who are licensed both state and nationally, I ask you to join our campaign to educate Washington as to what a local hard money lender does; the customers we help to buy their own home, when no one else would give them the money; the business owners who need to get money out of their free and clear property so they could stay in business during the Great Recession, and we were there for them. When Fannie Mae, and Freddie Mac, and FHA couldn't lend, we were there, and we kept on lending. I ask you to write your story below and tell Washington what you do, and why you are a viable part of a community.
And to all of the borrowers who benefit from hard money; maybe you lost your home through no fault of your own; maybe you encountered severe illness, lost a job, lost a family wage-earner to death;, filed bankruptcy; whatever the situation and however you were help by a hard money lender to buy a house to live in, to buy a house to rent out, or to refinance and get some money out of your residential property, I ask you to write your story below and tell Washington how you were helped by a hard money lender; how your regular lender turned you down repeatedly; and why you think it is important to keep local hard money lenders active in the community for situations that cannot be met by conventional lending.
We have started a website totally devoted to this issue called www.Fix-Dodd-Frank.org and if you click below and go to the website, you can tell us your story, and find out exactly what the Dodd-Frank Act does which will eliminate a hard money lender's ability to lend on residential property.
PLEASE CLICK HERE TO WRITE YOUR STORY ABOUT HARD MONEY LENDING.
Monday, May 9, 2011
DODD-FRANK AND HOUSING FINANCE REFORM
A CURE THAT'S WORSE THAN THE DISEASE
With the publication in early April of a Notice of Proposed Rulemaking (NPR) on the risk-retention requirement of the Dodd-Frank Act (DFA), we are beginning to see the outlines of the housing finance system the act envisions. If this proposed rule is adopted substantially as written, and there are no changes in the other provisions the act has added to the laws governing mortgage lending, the housing finance system of the future will place immense financial risks and regulatory costs on mortgage originators and securitizers, fail to prevent the growth of subprime and other low-quality lending, virtually ensure the continued existence of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, impair the development of a robust -private-sector housing finance system in the United States, and provide insurmountable advantages for the largest banks in the limited private securitization system that might exist. These adverse consequences cannot be corrected through regulatory action, so the housing finance system envisioned by the DFA should be replaced by an AEI plan that would define prime mortgages by statute.
Saturday, May 7, 2011
Websites with extensive information on Dodd-Frank
International Association of Risk and Compliance Professionals (IARCP)
http://www.dodd-frank-act.us/Dodd_Frank_Act_Text_Section_1431.html
Click here for an extensive writeup on the changes Dodd-Frank imposes on mortgages:
http://www.responsiblelending.org/mortgage-lending/policy-legislation/congress/Dodd-Frank-Summary-XIV-Subt-A-Ccomprehensivefinal.pdf
Click here for BankBryanCave.com, an expert on the Dodd-Frank Act clarifies the problems with the Act and mortgages:
http://www.bankbryancave.com/mortgage-reforms-under-the-dodd-frank-act/
http://www.dodd-frank-act.us/Dodd_Frank_Act_Text_Section_1431.html
Click here for an extensive writeup on the changes Dodd-Frank imposes on mortgages:
http://www.responsiblelending.org/mortgage-lending/policy-legislation/congress/Dodd-Frank-Summary-XIV-Subt-A-Ccomprehensivefinal.pdf
Click here for BankBryanCave.com, an expert on the Dodd-Frank Act clarifies the problems with the Act and mortgages:
http://www.bankbryancave.com/mortgage-reforms-under-the-dodd-frank-act/
SELLER FINANCING TO SUFFER AS WELL WITH DODD-FRANK ACT
We didn't realize the sellers who sell their properties and take back a note are also affected by the Dodd Frank Act. Read this article by Ric Thom, a note buyer for many years....
Private property owners have been swept into the regulations of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act which was signed into law in July 2010. Owner financing will be regulated in Title XIV Section 1401(2) (E) Mortgage Loan Origination Standards. The law restricts private property owners who want to sell their own property using owner financing (installment sale). These are some of the consequences.
Homeowners die before they receive all of their equity under the Dodd-Frank Act.
http://noteinvestor.com/sellers-corner/dodd-frank-hijacks-owner-financing/
Private property owners have been swept into the regulations of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act which was signed into law in July 2010. Owner financing will be regulated in Title XIV Section 1401(2) (E) Mortgage Loan Origination Standards. The law restricts private property owners who want to sell their own property using owner financing (installment sale). These are some of the consequences.
Homeowners die before they receive all of their equity under the Dodd-Frank Act.
http://noteinvestor.com/sellers-corner/dodd-frank-hijacks-owner-financing/
COMMITTEE FORMED TO ADDRESS DODD-FRANK ISSUES FOR PRIVATE MONEY LENDERS
A group of private money lenders in Las Vegas have joined together to fight the unfair provisions of the Dodd-Frank Act related to mortgage lending. They are not concerned as much about what the new rules will do to their businesses, as they are about what it will do to the unsuspecting homeowners and investors who want to buy real estate using hard money, and who will now be forced out of the market because of these rules. Dodd-Frank is supposed to stop the abuse by Wall Street, not stop Mom and Pop from getting a private money loan to buy a fixer upper house to live in.
See our website http://www.fix-dodd-frank.org/ for more information.
You can also contact us at 702-214-4700 or email us at info@fix-dodd-frank.org
See our website http://www.fix-dodd-frank.org/ for more information.
You can also contact us at 702-214-4700 or email us at info@fix-dodd-frank.org
Wednesday, March 30, 2011
NV Representative Dr. Joe Heck Responds to Letter re Dodd-Frank Act
SOMEBODY IN WASHINGTON CARES ENOUGH TO RESPOND TO MY LETTERS REGARDING THE HARM THAT SECTION 1431 OF THE DODD-FRANK ACT WILL DO OUR ABILITY TO GET PRIVATE MONEY FINANCING. PEOPLE BUY HOMES WITH PRIVATE MONEY FUNDING -BECAUSE IT IS THE ONLY WAY TO GET FINANCING FOR THESE HOMES THAT DESPERATELY NEED MAJOR REHAB OR ARE TOO CHEAP TO BE ELIGIBLE FOR CONVENTIONAL FINANCING. HERE ARE HIS COMMENTS. CORINNE CORDON @HARDMONEYTALK HOST OF HARD MONEY TALK SHOW ON 970 KNUU BUSINESS TALK RADIO, LAS VEGAS, NV March 29, 2011 Dear Corinne, Thank you for contacting me to express your concerns with Section 1431 of the Dodd-Frank Wall Street and Consumer Protection Act regarding high-cost mortgages. I share your concerns and appreciate hearing from you on this important issue. As you know, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2011 was signed into law on July 21, 2010 (P.L. 111-203), before I was in Congress. This sweeping financial regulatory reform bill was aimed at increasing consumer protection and transparency in our financial industry. Included in this legislation were provisions placing limitations on the terms of mortgages, as well as restrictions on residential mortgage loans. Like you, I have serious concerns with this legislation that will ultimately harm consumers through increased fees and fewer services and benefits. This legislation could also create an unfair burden on smaller financial institutions, l ike yours, and place them at a competitive disadvantage. Several hearings have been held by the House Financial Services Committee regarding the Dodd-Frank Act and its effects. While no legislation to repeal this bill has been considered by the full House of Representatives, please be assured that I will continue to monitor this issue and will work with my colleagues to ensure that we have a transparent financial system that does not place undue burdens on both the institutions and the consumers. For additional information, please visit my website, http://www.heck. access statements about current events or pending legislation, and receive detailed information about the many services that I am privileged to provide for Nevadans. Again, I appreciate your thoughts and it is an honor to serve you in Congress. Your suggestions are always welcome, and if ever I may be of assistance, please do not hesitate to contact me. |
| Sincerely, DR. JOE HECK Member of Congress |
Tuesday, January 11, 2011
LETTER TO MR. MICHAEL BERESIK ON SECTION 1431
I wrote this letter to Michael Beresik. I was referred to him by the office of Barney Frank, congressman from Massachusetts. In this letter, I urge him to make changes to Section 1431 of the Dodd-Frank Act.
January 8, 2010
Dear Mr. Beresik: My name is Corinne Cordon, I am a private money broker from Las Vegas, Nevada, and I am writing to you about an unintended consequence that will occur as a result of Section 1431 of the Dodd-Frank Act. I read the Act when it came out because I work closely with our legislature during the session, and I want to be prepared with the facts. I had already heard from others in the industry that this Act would totally eliminate the ability of an “owner-occupant” to use private money to purchase a house, but I did not believe it, however, they were right.
The ability for a private investor to make a loan to someone who wants to live in the house himself will become extinct upon the passage of the regulations of the Dodd-Frank Act. And I do not believe that this is what Barney Frank had in mind. I think, that, as has happened in the past, no one remembered that there is a small, quiet industry that lends out their money directly to other people. We are not an organized industry, but thank God that we exist, because otherwise there would have been a lot of people who could not have bought property over the past two years, and the economy would have suffered even more because of it.
It does not concern us – the private money lenders – whether or not we can lend to owner-occupant families, because there are plenty of investors that we can to lend to. It does concern me as a humanitarian, however, that the owner-occupants, who have been kicked around enough by the institutional lenders, now have NO WAY to purchase a house. Trust me, conventional lenders are not willing to lend to someone who has had a short sale, foreclosure, bankruptcy, loss of job, loss of wage earner because of sickness or death – at least not for the next 5 years. And now they have such unbelievably ridiculous underwriting guidelines. Even people who have 790 credit scores are having a hard time meeting all of the qualifications.
We, the private money lenders, are the only ones willing to lend to people with these situations. And our loans are not onerous. For a family who wants to buy a house for $50,000 (of which we have done many in the past two years), they only have to put in $20,000 and we will lend the other $30,000. Yes, our loans are slightly more expensive than a conventional loan, but when you factor in all of the other benefits a conventional lender receives when he sells that loan on the secondary market, then you will see that we actually make less than those lenders.
It is our investors, who are ordinary people – usually retired – who are willing to fund these loans. And our investors are putting their money on the line for two entire years. That is like putting your money into a two year CD. They can’t sell their loan to the secondary market. And they can’t ask for their money back for two years. And our borrowers are so grateful that we are willing to make a ‘common sense’ loan – that we can see that they lost their jobs and had no way to make their mortgage payment – but that they had been 100% on time before they lost their job. We look into the background of their credit history. We don’t have a small box that they have to fit into. We lend to movie stars and nurses, truck drivers and housekeepers.
The payment on a $30,000 loan is $306.25 interest only. They are allowed to make additional payments whenever they want without any penalty. By the end of two years, they have usually paid us off. If not, we give them another year. My company charges one flat fee no matter who the borrower is. But it isn’t about the private money brokers, or the individual investors who are just like you and I. An individual investor puts his money into a private money loan because he wants to get a better return on his money and you cannot legislate to him how much he is willing to lend his money out at. If my private money investors would lend out their money at 8%, then I would be happy to give borrowers that rate. But they don’t and I can’t force them to. And if you tell a private money broker that he cannot charge for his services when he lends to owner occupants, then he will say okay, and never lend to an owner occupant again. Trying to legislate what a business person can charge on a loan, when the law has no idea of how much work we have to do to make that loan, and how much responsibility we have to keep our investor’s money safe, is illogical and just plain wrong.
I will write more on this later with specific changes that could be incorporated that would fix numerous problems generated through years of legislation that had no idea how this small industry works.
Corinne Cordon, President
Capella Commercial Mortgage
3571 E. Sunset, #102
Las Vegas, NV 89120
(702) 214-4700
(702) 592-7183 cell
(702) 214-4703 fax
www.HardMoneyLasVegas.com
www.InvestHardMoney.com
January 8, 2010
Dear Mr. Beresik: My name is Corinne Cordon, I am a private money broker from Las Vegas, Nevada, and I am writing to you about an unintended consequence that will occur as a result of Section 1431 of the Dodd-Frank Act. I read the Act when it came out because I work closely with our legislature during the session, and I want to be prepared with the facts. I had already heard from others in the industry that this Act would totally eliminate the ability of an “owner-occupant” to use private money to purchase a house, but I did not believe it, however, they were right.
The ability for a private investor to make a loan to someone who wants to live in the house himself will become extinct upon the passage of the regulations of the Dodd-Frank Act. And I do not believe that this is what Barney Frank had in mind. I think, that, as has happened in the past, no one remembered that there is a small, quiet industry that lends out their money directly to other people. We are not an organized industry, but thank God that we exist, because otherwise there would have been a lot of people who could not have bought property over the past two years, and the economy would have suffered even more because of it.
It does not concern us – the private money lenders – whether or not we can lend to owner-occupant families, because there are plenty of investors that we can to lend to. It does concern me as a humanitarian, however, that the owner-occupants, who have been kicked around enough by the institutional lenders, now have NO WAY to purchase a house. Trust me, conventional lenders are not willing to lend to someone who has had a short sale, foreclosure, bankruptcy, loss of job, loss of wage earner because of sickness or death – at least not for the next 5 years. And now they have such unbelievably ridiculous underwriting guidelines. Even people who have 790 credit scores are having a hard time meeting all of the qualifications.
We, the private money lenders, are the only ones willing to lend to people with these situations. And our loans are not onerous. For a family who wants to buy a house for $50,000 (of which we have done many in the past two years), they only have to put in $20,000 and we will lend the other $30,000. Yes, our loans are slightly more expensive than a conventional loan, but when you factor in all of the other benefits a conventional lender receives when he sells that loan on the secondary market, then you will see that we actually make less than those lenders.
It is our investors, who are ordinary people – usually retired – who are willing to fund these loans. And our investors are putting their money on the line for two entire years. That is like putting your money into a two year CD. They can’t sell their loan to the secondary market. And they can’t ask for their money back for two years. And our borrowers are so grateful that we are willing to make a ‘common sense’ loan – that we can see that they lost their jobs and had no way to make their mortgage payment – but that they had been 100% on time before they lost their job. We look into the background of their credit history. We don’t have a small box that they have to fit into. We lend to movie stars and nurses, truck drivers and housekeepers.
The payment on a $30,000 loan is $306.25 interest only. They are allowed to make additional payments whenever they want without any penalty. By the end of two years, they have usually paid us off. If not, we give them another year. My company charges one flat fee no matter who the borrower is. But it isn’t about the private money brokers, or the individual investors who are just like you and I. An individual investor puts his money into a private money loan because he wants to get a better return on his money and you cannot legislate to him how much he is willing to lend his money out at. If my private money investors would lend out their money at 8%, then I would be happy to give borrowers that rate. But they don’t and I can’t force them to. And if you tell a private money broker that he cannot charge for his services when he lends to owner occupants, then he will say okay, and never lend to an owner occupant again. Trying to legislate what a business person can charge on a loan, when the law has no idea of how much work we have to do to make that loan, and how much responsibility we have to keep our investor’s money safe, is illogical and just plain wrong.
I will write more on this later with specific changes that could be incorporated that would fix numerous problems generated through years of legislation that had no idea how this small industry works.
Corinne Cordon, President
Capella Commercial Mortgage
3571 E. Sunset, #102
Las Vegas, NV 89120
(702) 214-4700
(702) 592-7183 cell
(702) 214-4703 fax
www.HardMoneyLasVegas.com
www.InvestHardMoney.com
Section 1431
LAWS TO PROTECT THE CONSUMER WILL RESULT IN THE EXIT OF ALL PRIVATE MONEY LENDERS FOR OWNER-OCCUPANTS.
Section 1431 of the Dodd-Frank Act enacts provisions that:
1.) require the consumer to go to counseling and receive a certificate. Borrowers have emergency situations that may require that the money be obtained very quickly. Private money is FAST. How long will it take to get an appointment and go to counseling? The worst part of this law is that many times, homeowners come to us at the last minute, because their conventional lender decided not to do the loan at the last minute. Our borrowers are putting in 40% of the cost of the house, and we explain our loans very carefully. Our borrower know how to manage their money and pay us back.
2) require that we not charge anything for a loan modificaton or extension. That is a wonderful concept, except that I don’t know anyone else who works for free, so why are we supposed to? Our investors are PRIVATE individuals: we have to speak with them, prepare paperwork, review all of the documentation, and get signatures in order to do note extensions.
3) prohibit balloon payments. Well there goes the private money loan out the door. Unless, you just want to borrower $5000 and pay it back over two years. Most of my customers buying houses are borrowing $30-$50,000 and they plan on refinancing at the end of their two years. We aren’t able to sell our loans on the secondary market, and the private investors that I use don’t want to lend out their money for 30-40 years. Instead, they will simply say “no thank you”, and the borrowers will have to do without private money. In most cases, that means they can’t get the house.
Listed below is a text excerpt about Subtitle C. Do your own research and if you think I am right, please write to michael.beresik@mail.house.gov and let him know that this will hurt homeowners by stopping the availability of private money funds from private investors.
2.3 High-Cost Mortgages
Subtitle C (High-Cost Mortgages) of the Act sets forth additional requirements for high-cost mortgages, including a prohibition on balloon payments, debt acceleration and modification or deferral fees, and restrictions on late charges. Many of the new high-cost mortgage TILA provisions will now be similar to respective State law provisions. Considering these restrictive amendments, creditors and the secondary market may act more cautiously in future when extending or purchasing high-cost mortgages. The Act also adds a new TILA provision prohibiting a creditor from extending credit to a consumer secured by a high-cost mortgage without first receiving certification from an independent counselor approved by the Department of Housing and Urban Development (“HUD”) or a State housing authority. Such certificate must confirm that the consumer has received pre-loan counseling on the advisability of the mortgage. The Act provides two limited rights to cure a creditor’s unintentional violation of the high-cost provisions
Section 1431 of the Dodd-Frank Act enacts provisions that:
1.) require the consumer to go to counseling and receive a certificate. Borrowers have emergency situations that may require that the money be obtained very quickly. Private money is FAST. How long will it take to get an appointment and go to counseling? The worst part of this law is that many times, homeowners come to us at the last minute, because their conventional lender decided not to do the loan at the last minute. Our borrowers are putting in 40% of the cost of the house, and we explain our loans very carefully. Our borrower know how to manage their money and pay us back.
2) require that we not charge anything for a loan modificaton or extension. That is a wonderful concept, except that I don’t know anyone else who works for free, so why are we supposed to? Our investors are PRIVATE individuals: we have to speak with them, prepare paperwork, review all of the documentation, and get signatures in order to do note extensions.
3) prohibit balloon payments. Well there goes the private money loan out the door. Unless, you just want to borrower $5000 and pay it back over two years. Most of my customers buying houses are borrowing $30-$50,000 and they plan on refinancing at the end of their two years. We aren’t able to sell our loans on the secondary market, and the private investors that I use don’t want to lend out their money for 30-40 years. Instead, they will simply say “no thank you”, and the borrowers will have to do without private money. In most cases, that means they can’t get the house.
Listed below is a text excerpt about Subtitle C. Do your own research and if you think I am right, please write to michael.beresik@mail.house.gov and let him know that this will hurt homeowners by stopping the availability of private money funds from private investors.
2.3 High-Cost Mortgages
Subtitle C (High-Cost Mortgages) of the Act sets forth additional requirements for high-cost mortgages, including a prohibition on balloon payments, debt acceleration and modification or deferral fees, and restrictions on late charges. Many of the new high-cost mortgage TILA provisions will now be similar to respective State law provisions. Considering these restrictive amendments, creditors and the secondary market may act more cautiously in future when extending or purchasing high-cost mortgages. The Act also adds a new TILA provision prohibiting a creditor from extending credit to a consumer secured by a high-cost mortgage without first receiving certification from an independent counselor approved by the Department of Housing and Urban Development (“HUD”) or a State housing authority. Such certificate must confirm that the consumer has received pre-loan counseling on the advisability of the mortgage. The Act provides two limited rights to cure a creditor’s unintentional violation of the high-cost provisions
Dodd-Frank Issues
This Blog shall be about issues discovered with the Dodd-Frank Act, a law sponsored by Barney Frank and Chris Dodd and signed into law in 2010. During 2011 and 2012, regulations will be forthcoming from different agencies to implement the different parts of the Act.
Anyone is welcome to contribute to this blog with their comments on anything related to this Act.
I will start by detailing the problems with Section 1431, sub title C, High Cost Loan Provisions, which will make it so impossible for private money lenders to make loans to people that own their own homes and want to use them for collateral for a loan. It will no longer be an option.
Anyone is welcome to contribute to this blog with their comments on anything related to this Act.
I will start by detailing the problems with Section 1431, sub title C, High Cost Loan Provisions, which will make it so impossible for private money lenders to make loans to people that own their own homes and want to use them for collateral for a loan. It will no longer be an option.
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