26 Jul **Newsflash** New Seller Financing Rules (Safe Act) NOT a Problem for Land Investors
I have an important update for all Real Estate Investors who want to continue making money. Watch it here and after you watch it please leave me a comment.
I have been bombarded with questions about the new SAFE ACT which was issued by the George W. Busch Government and is supposed to regulate how and when a seller can do a Seller Financing deal.
As you guys know I am selling about 60-70% of all my properties with seller financing and you are probably too as a Land investor using my www.LandProfitGenerator.com and www.LandProfitFormula.com programs.
So this has relevance and could possibly make doing business as a Land Flipper much more difficult.
So I hired a Real Estate Attorney to look into this for me and also my CPA and both came up with the same result (and I also checked it out).
Now I am NOT an attorney and don’t even play one on Television so you have to still do your own research and this is not meant to be legal advise.
But according to all I have heard and researched and what my attorney told me if you are a Land Investor I have GOOD news.
It is our clear conclusion that the new HUD SAFE Act is a Non-Issue for Land Investors because LAND is excluded from the kinds of real estate affected by this new Rule.
According to the HUD which put this new federal law on the books each state has until about 7/31/2010 to implement some kind of a regulation that controls the use of Seller Financing in Real Estate Transactions. Basically HUD put up a Sample Guideline rule and suggests that the states follow it or create something that is at least as strict as that one.
You can read the entire thing here: http://www.hud.gov/offices/hsg/ramh/safe/smlicact.cfm
And basically it says that if you do Seller Financing you can only do it if you either ARE a Financial Mortgage Broker or if you Work Through a Financial Mortgage Broker.
BUT, the HUD definition and so far also all the State Rules I have seen are very clear in what they actually include in this Definition of Real Estate, and actually they use the word “Dwelling” and under item C. of the Guideline they accept and cross reference the Definition of “Dwelling from regulation Z which reads:
“Regulation Z, which implements TILA, defines dwelling to mean “a residential structure that contains 1 to 4 units, whether or not that structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence.” (12 CFR 226.2(a)(19).) Since both the SAFE Act and TILA address consumer protections for borrowers in housing finance transactions, HUD finds that the same interpretation applies under the SAFE Act. In addition, HUD interprets “mobile home” to include a manufactured home, as defined in the National Manufactured Housing Construction and Safety Standards Act of 1974. (42 U.S.C. 5402(6).)
The HUD SAFE act that everyone is panicking about is actually a NON-ISSUE for us Land Investors. If you buy and sell land using the www.LandProfitGenerator.com techniques you should NOT be affected by this rule at all and can continue business as is.
Hope that was worth spending a few minutes reading this.
More updates will follow soon.
Now as always, go out there and get deals done.
To your Success,
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