House Bill 1787-Why it’s Death to Your Business and What YOU Can Do About it.

House Bill 1787-Why it’s Death to Your Business and What YOU Can Do About it.

The U.S. Senate is considering a bill that would severely limit the way you do business as a creative investor and, more importantly, is an inexcusable infringement of the property rights of all Americans.

HR 1728, which you can view in its entirety here: www.govtrack.us/congress/bill.xpd?bill=h111-1728

It covers a lot of different topics but here’s the important part. You will NOT be able to sell more than 1 property with owner financing every 3 years!

Their definition of Seller financing includes land contract, owner-held mortgage or wrap-around mortgage-and who knows if they’ll define lease/options as owner financing, too?

It means that you will have to comply with a long, confusing, and penalty-filled piece of national legislation. Here are the types of transactions that you would be restricted from doing more than once every 36 months:

  • Selling YOUR OWN HOME using a land contract or owner-held mortgage so that you can get a quicker sale, higher sale price, or better rate of interest than is available in other investments
  • Carrying back owner-held second mortgages on investment properties that you sell
  • Doing any kind of installment sale on residential properties including homes, condos, mobile homes, and even raw land that is zoned residential

The bottom line is, this law has to be stopped and it has to be stopped NOW. Here’s why:

1. Congress is trying to regulate the wrong thing. The deals we make are not “loans”-they don’t involve the transfer of money, or points or closing costs or adjustable rates or any of the other things that caused the mortgage crisis to begin with. They are INSTALLMENT SALES. We don’t give money to the “borrower” and wait for it to be paid back: we give a property to the borrower and wait for it to be paid off. Regulating this will have no effect on the foreclosure crisis

2. It is a completely unacceptable infringement on private property rights. When I own a piece of property and find a ready, willing, and able purchaser, I should be able to control the sale of that property within the existing laws of my state, which already regulate the interest rate that I am able to charge and some of the terms of the sale. The government does not have the right to tell us that we need special licensing to sell our own properties; nor do they have the right to further regulate the terms under which we can sell or burden small investors with a new set of rules that we can’t comply with.

Not only will this new law, if passed as written, effectively choke off owner financing as an exit strategy for you, it will also take away housing choice for your buyers. The millions of Americans who’ve been through foreclosure in the last 3 years can’t buy a house in any way OTHER THAN to negotiate owner financing with a seller-and HR 1728 would greatly reduce the number of properties available in this way. Millions of potential home owners who would otherwise be able to re-start the process of paying off a home, and get the tax advantages of ownership, will be reduced to renting until they are able to qualify for bank financing.
What to Do Right Now

This bill has already passed the House and is waiting for Senate approval. Please contact your senator via email, Fax or US mail and let them know that this law MUST NOT PASS in its current form.

Senator Jon Kyle
730 Hart Senate Building
Washington, D.C. 20510
Fax: (202) 224-2207

Senator John McCain
241 Russell Senate Office Building
Washington, DC 20510
Fax: 202-228-2862

As always in cases like this, you have an automatic handicap to overcome-the fact that you are a real estate investor and are therefore viewed as part of the problem. So when you write, don’t emphasize the nature of your business, just that you and your buyers would be greatly adversely affected by the new law. SEE BELOW FOR SAMPLE LETTERS to fax, email or mail.

We need THOUSANDS of these communications to go out in the next few days to have a CHANCE of stopping this in its tracks. So whether you’re a new or experienced investor, PLEASE take the time right now to write your elected representative!

Here are some sample letters or emails.

IF YOU HAVE A REAL ESTATE LICENSE
Dear Senator [name]

My name is (insert name here) and I am a life-long resident of (insert city name here).

I am writing you to encourage you to vote NO on HR 1728, the “Mortgage Reform and Anti-Predatory Lending Act”.

While many of the provisions of the act are positive steps toward mortgage reform, the inclusion of private owners in the act, see section 101(3)(e), will enormously reduce the housing choice of (your state) and the ability of home owners to sell properties in this already-slow market.

As a real estate broker, I have seen several dozen cases in the past year of home sellers and buyers coming to an agreement for an installment sale on a property that the owner desperately needed to sell (often to avoid foreclosure) and the buyer desperately wanted to buy, but could not raise the down payment needed for conventional financing.

In all cases, these sales turn out to be win-win deals for the buyer and seller; the seller was able to get rid of an unwanted property to a buyer who loved it, and the buyer was able to get his new home at an affordable payment and interest rate with none of the usual costs (points, application fees, etc.) inherent in more conventional mortgage transactions.

In (your state) these transactions are already regulated by state law: a low maximum interest rate is already in place, and both the buyer and seller are protected by other regulations at the state level.

In defense of private property rights, owners should be exempted from the burdensome and unnecessary rules that this law foists upon them. In its current form, it would all but shut off the “owner financing” market that is the only way that many sellers can sell and many buyers can buy right now.

PLEASE DO NOT LET THIS RESTRICTION ON PRIVATE PROPERTY RIGHTS PASS THE SENATE. It is unnecessary to stop private buyers and sellers from transacting business that is beneficial to both of them – they are not the problem that the bill seeks to solve. HR 1728 would be extremely harmful to thousands of your constituents.

It will exacerbate the problem OF foreclosure, as fewer sellers will be able to sell their homes to avoid it, and CAUSED BY foreclosure, as fewer buyers who have recently experienced foreclosure will be able to re-start the process of home ownership inexpensively and easily by negotiating owner financing.

Thank you for your consideration;

Insert Name
Licensed Real Estate Broker license #
Phone #
email

IF YOU SELL HOUSES WITH OWNER FINANCING
Dear Senator [name]

My name is (insert name here) and I am a life-long resident of (insert city name here).

I am writing you to encourage you to vote NO on HR 1728, the “Mortgage Reform and Anti-Predatory Lending Act”.

While many of the provisions of the act are positive steps toward mortgage reform, the inclusion of private owners in the act, see section 101(3)(e), will enormously reduce the housing choice of Ohioans and the ability of home owners to sell properties in this already-slow market.

As a professional housing provider, I sell several houses each year to home buyers on installment sale [or, if you have not purchased a property, add here: “I had planned to sell several houses this year on installment sale]-a practice that would become impossible under this law in its current form.

I find that in today’s slow market, the best way for me to help buyers who desperately want to become homeowners, but who cannot raise the down payment or meet the other terms needed for conventional financing, is to allow them to make payments directly to me.

These sales are win-win deals for both the buyer and myself; I am able to turn over homes that I’ve bought and renovated (often from homeowners facing foreclosure or banks who took back the property) to buyers who love and can afford them, and the buyer can get his new home at an affordable payment and interest rate with none of the usual costs (points, application fees, etc.) inherent in more conventional mortgage transactions.

In (your state), these transactions are already regulated by state law: a low maximum interest rate is already in place, and both the buyer and seller are protected by other regulations at the state level.

Without the ability to sell homes in this way, I will no longer be able to invest in and renovate any of the tens of thousands of vacant, ugly houses placed on the market by the foreclosure crisis, and my small-but-beneficial business will literally be in ruins. Perhaps more importantly, the homeowner-buyers that I serve will be forced to rent rather than moving toward the American dream of home ownership.

In defense of private property rights, owners should be exempted from the burdensome and unnecessary rules that this law imposes on them. In its current form, it would all but shut off the “owner financing” market that is the only way that many sellers can sell and many buyers can buy right now.

PLEASE DO NOT LET THIS RESTRICTION ON PRIVATE PROPERTY RIGHTS PASS THE SENATE. It is unnecessary to stop private buyers and sellers from transacting business that is beneficial to both of them-they are not the problem that the bill seeks to solve. HR 1728 would be extremely harmful to thousands of your constituents.

It will exacerbate the problem of foreclosure, as fewer sellers will be able to sell their homes to avoid it, and CAUSED BY foreclosure, as fewer buyers who have recently experienced foreclosure will be able to re-start the process of home ownership inexpensively and easily by negotiating owner financing.

Thank you for your consideration;

Insert Name
Perfect Properties, inc.
Phone number
email

IF YOU BUY HOUSES WITH OWNER FINANCING
Dear Senator [name]

My name is (insert name here) and I am a life-long resident of (insert city name here).

I am writing you to encourage you to vote NO on HR 1728, the “Mortgage Reform and Anti-Predatory Lending Act”.

While many of the provisions of the act are positive steps toward mortgage reform, the inclusion of private owners in the act, see section 101(3)(e), will enormously reduce the housing choice of Ohioans and the ability of home owners to sell properties in this already-slow market.

In the past year, I have purchased and renovated several homes made possible because the sellers of these homes were able to sell to me using owner financing in an unrestricted way.

For many of these property owners, seller financing was the only way to unburden themselves of an unwanted property that, in some cases, was headed toward foreclosure before I purchased it.

Without this ability, I can not continue to buy and renovate properties in the neighborhoods that need me and my colleagues to invest our time, energy, and money in rehabbing properties. Bank financing is not an option for these properties because of the condition; only financing carried by the sellers will suffice.

Section 101(3)(e) would keep my sellers from utilizing this method of getting rid of unwanted properties in today’s market, should they have more than one to sell.

In defense of private property rights, owners should be exempted from the burdensome and unnecessary rules that this law imposes on them. In its current form, it would all but shut off the “owner financing” market that is the only way that many sellers can sell and many buyers can buy right now.

PLEASE DO NOT LET THIS RESTRICTION ON PRIVATE PROPERTY RIGHTS PASS THE SENATE. It is unnecessary to stop private buyers and sellers from transacting business that is beneficial to both of them-they are not the problem that the bill seeks to solve. HR 1728 would be extremely harmful to thousands of your constituents.

It will exacerbate the problem of foreclosure, as fewer sellers will be able to sell their homes to avoid it, and CAUSED BY foreclosure, as fewer buyers who have recently experienced foreclosure will be able to re-start the process of home ownership inexpensively and easily by negotiating owner financing.

Thank you for your consideration;

Insert Name
Perfect Properties, inc.
Phone number
email


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  • Deangelo Hinkley
    Posted at 18:00h, 13 May

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