Legislation

Finance Reform Legislation hurts private property owners

by: Keith Knapp

The freedom to freely enter into contract for the purpose of selling your own property may soon be deemed illegal if language currently located in HR 4173 – Wall Street Reform and Consumer Protection Act finds its way into the text of S 3217 – Restoring American Financial Stability Act of 2010. These two pieces of legislation were the focus of National REIA’s recent Day on the Hill efforts, which were successful, but considering the timeliness of the debate surrounding S 3217, as is most reasonably highlighted by the appearance of its sponsor, Senator Chris Dodd (D-CT) on yesterday’s edition of Meet the Press, it is imperative to remain diligent in our efforts to protect our industry.

In 2009, language requiring private property owners who would seek to sell their own property with ’seller financing’ to be subject to the same licensing, ongoing testing, bonding, proof of net worth and reporting required of professional mortgage loan originators passed the House of Representatives by a very slim margin. Fortunately, S 3217 does not include the same language currently, and as the bill is scheduled for a floor vote, by order of cloture, today, it appears as though it will be left out of the bill.

In the case that Senate bill and the House version (HR 4173) are at odds, the two bills will likely be discussed in conference committee where it will be our goal to have the language referenced below removed:

(E) does not include, with respect to a residential mortgage loan, a person, estate, or trust that provides mortgage financing for the sale of 1 property in any 36-month period, provided that such loan-

(i) is fully amortizing;
(ii) is with respect to a sale for which the seller determines in good faith and documents that the buyer has a reasonable ability to repay the loan;
(iii) has a fixed rate or an adjustable rate that is adjustable after 5 or more years, subject to reasonable annual and lifetime limitations on interest rate increases; and
(iv) meets any other criteria the Federal banking agencies may prescribe;

The Anti-Predatory Lending provision is aimed at protecting consumers and individuals, but this provision could directly impact, negatively, more than 26,000 families, each year, which is the number of families who benefit from seller financing per every one percent of investment properties sold.

CLICK HERE for more information about the Economic Impact of Seller Financing.

In order to propel the fight against this potentially harmful legislation National REIA would ask that you contact your Congressman and Senators, NOW, to inform them of your opposition to the efforts to require private property owners to secure and maintain the same licensing as mortgage loan originators who loan money every day for a profession. It is important to note the negative impact that these efforts, if passed, will have on the same consumers that the Anti-Predatory Lending legislation is supposed to be protecting. Also, highlight that you are not opposed to the regulation of the mortgage industry at large, only of private property owners who would seek to offer terms of sale of a property for monthly payments in exchange for equity.

CLICK HERE for a SAMPLE LETTER to be sent to your legislator.

To find your Congressman visit http://www.house.gov and put in your zip code in the top left hand corner of the screen.

To find your Senators, visithttp://senate.gov/general/contact_information/senators_cfm.cfm.

New Lead Paint Regulations to take Effect April 22, 2010

by: Keith Knapp

New EPA Lead Regulations scheduled to take effect on April 22, 2010 will dramatically affect Landlords, Renovators, and Investors. There is a new EPA program called “Renovate Right” that applies to virtually every housing provider and trades contractor in the country, with some narrowly drawn exceptions. The penalty for a single violation is about $35k. There is a lot to know about these new regulations and in order to be prepared for the changes we encourage everyone to visit:

http://www.epa.gov/lead/pubs/renovation.htm, and

http://www.epa.gov/EPA-TOX/2008/June/Day-26/t14507.htm

and read everything and download what you need for printing and study.

Also, the Student Manual and Instructor Manual for the New Lead Paint regulations can be found below.

Student Manual EPA-740-R-09-002 (312 pages)

http://www.epa.gov/lead/pubs/rrp_8hr_studentmanual_feb09.pdf

Instructor Manual EPA-740-R-09-001 (434 pages)

http://www.epa.gov/lead/pubs/rrrp_8hr_instructormanual_feb09.pdf

Please do not hesitate to voice your opinion regarding these regulations with your legislators on a local, state and federal level. While these regulations have already been approved, the more our leaders at capitals across the country know how negatively actions like this affect our Industry the better.