Owner Financing Dodd Frank and the SAFE Act

Owner Financing Dodd-Frank and the SAFE Act Owner Financing, Dodd Frank and the SAFE Act… If you are selling properties to owner occupants and doing selling financing, you ought to be aware of some comprehensive new regulations that have been in effect for a few years, and a real zinger that goes into effect on January 10, 2014. A few years ago, the “SAFE Act” was passed on the federal level, then was implemented on a state-by-state basis. The SAFE Act basically required that you be a mortgage loan originator, or use a mortgage loan originator to sell properties with owner financing. This means getting a loan application like a FNMA 1003, comply with Truth in Lending, and have the buyer sign the ½” thick pile of other lender disclosures. People panicked when the SAFE Act came out, and declared that seller financing was all but dead. I simply walked down the hall of my office building and asked a mortgage guy if he could “originate” my seller financing loans. He printed the stack of documents from his lender software and charged the buyer $400 as a loan origination fee. No big deal, just a waste of good trees in my opinion. The SAFE Act was later amended in my state (and many others) to allow you to do three or so deals a year without having to do all this nonsense. The Act did not address using different entities every three deals, so, as a practical matter, the issue was put to bed for us in Colorado.