This bill certainly takes away our right to use seller financing as we see fit. Rarely does legislation have the potential to impact the world of seller financing as severely as HR 1728: Mortgage Reform and Anti-Predatory Lending Act. HR 1728 limits you as an individual to sell real property using seller financing to only once every 36 months (HR 1728 Sec 101 Definition (3)(E)). That could really effect our economy. For some reason Congress has included private property owners who wish to sell their property using seller financing. Seller financing is used tens of thousands of transactions a year, if not hundreds of thousands of transactions a year to sell real estate. What an impact this could have on all of us. This bill takes away our right to use seller financing as we see fit. I believe House Bill HR 1728 should exempt anyone who offers or negotiates terms of a real property sale financed in whole or in part by the seller and secured by the seller’s real property. I really think this could hurt our economic future. Money is so tight right now, with 2,000 construction workers loosing their jobs downtown, Portland with Tom Moyer’s project being haulted until 2010. What if some of those construction people need to sell their properties faster than the banks can lend money, just so they can afford to pay their mortgage on their homes? We really need to stop the government from taking away seller financing. I’m really afraid It’s going to have an impact on us all. I think selling real estate is tough enough without having to deal with this insane idea. Somebody has got to stop the government from taking away our right to sell our property the way we want to and when we want to. And in closing, there certainly should not be any restriction on how many properties we sell during a certain time period as well.

Thank you for forwarding us your concerns regarding seller financing. We understand that the restriction of 1 seller financed property every three years is of great concern to our members, and NAR greatly appreciates receiving all of the comments related to this topic.

First, please know that H.R. 1728, “the Mortgage Reform and Anti-Predatory Lending Act of 2009″, will not be taken up by the Senate any time soon. Senate Banking Chairman, Chris Dodd, has indicated this a couple of times over the last few weeks, with his latest comments appearing in the May 26th release of Inside Regulatory Strategies. In the article, an industry executive is quoted as saying that this is “deja vu all over again”, referring to the 2007 anti-predatory lending bill that was sent to the Senate and died due to inaction. Moreover, Chairman Dodd indicated that “this issue is not on his ‘mustdo list’, which includes credit card reform, financial modernization, and the oversight of TARP.” Senator Dodd goes further and states, “he’s not minimizing predatory lending, but the financial crisis has pretty much collapsed the subprime market, where the majority of abusive and predatory practices took place.”

Second, when the original language for H.R. 1728 was introduced, REALTORS® faced two significant issues: 1) being included in the definition of mortgage originator, which would have required additional licensing and educational requirements, and 2) having all consumers that finance the sale of their real property required to be licensed to do so. We worked hard, and successfully removed the requirement of REALTORS® licensed / registered as mortgage originators, and to allow seller financers not to have to register, or get licensed, to sell their own real property once every three years. Please note that: 1) NAR worked for a full exclusion for seller financers; however, had to accept the current language as a compromise or there would have been no exclusion, and 2) That the language does not prohibit consumers from financing the sale of more than 1 property every three years. If the consumer wants to finance more than 1 property every 3 years, they will have to be licensed as a mortgage originator, and become subject to the rules within H.R. 1728. It was Congress’ contention that this requirement would severely constrain the possibility of seller-financing as a loop hole for the unscrupulous businesses that preyed on consumers during the housing bubble.

With all that said, I would like you to take the following two messages from this e-mail and NAR. First, the bill looks like it will die due to inactivity in the Senate. Meaning, these requirements, which are not in effect, will not go into effect anytime soon. Second, if the bill begins to move in the Senate, NAR will work diligently to have a full exclusion for seller financing added to the Senate’s version of the bill, or increase the limitation so it does limited harm to consumers that have to utilize this type of financing.

Please let me know if you have any additional comments or concerns.

Thanks again for your comments.

Anthony Hutchinson
Sr. Policy Representative – Financial Services
National Association of REALTORS®

(202) 383-1120
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We started investing in real estate in the recent past. Due to this bad lending situation, we can work with people to able to make them a home owner, in a perfectly legal way by seller financing – government wants to take that away from us.

This past January, I lost my job. I am not crying about it. I am working hard to get my real estate business to grow. I have to keep all options open to make money. At my age it also difficult to get real jobs anyway. I am working on other ventures as well.

I think the current administration, federal and state level have a mission of putting on control for everything we we do. Its getting tiresome. Pretty soon we can’t own our businesses. May be I am synical – but the trend is there.

I am nobody. The powerhouses of entrepreneurs that have made this country so great, if they don’t catch on to it and provide input into this matter we will all suffer in due time. We will be most stagnant economy there is – Government run. THAT WILL BE A VERY SAD DAY. I sure hope no see it in my life time.