Yesterday I received an email with an urgent plea for action. The plea stated: "HUD has proposed to eliminate ALL seller financing unless the seller lives in the home or becomes a licensed mortgage originator." The plea requested that I post a comment on HUD's proposed rules regarding the S.A.F.E. (Secure and Fair Enforcement) Mortgage Licensing Act of 2008 before the February 16th deadline for public comments expires.
As a landlord who sometimes buys or sells residential property using owner financing this email demanded my immediate attention. Not wanting to comment before reading the Act (part of the 261 page "Housing And Economic Recovery Act Of 2008") and the proposed HUD Rule (16 pages titled "SAFE Mortgage Licensing Act: HUD Responsibilities Under the SAFE Act; Proposed Rule" Federal Register 12/15/09), I realized that my day was no longer my own. As an entrepreneur and business person I spend an inordinate amount of time trying to protect freedoms which I believed were guaranteed by our Constitution. This may seem unproductive, but it is necessary. Government should allow us to take risks and to succeed or fail without trying to protect us from our own ineptitude.
David Tilney
Keyper Corporation
Click here (My posting on HUD's request for public comments)
Click here (read the Call to Action email)
Friday, February 12, 2010
S.A.F.E. Mortgage Licensing Act - PLEASE HELP!
In my opinion, the proposed HUD Rules which interpret the S.A.F.E. Mortgage Licensing Act are misguided and perhaps unconstitutional. These are the comments I chose to post on the government site which is requesting public input. YOUR COMMENTS ARE VERY IMPORTANT AND MUST BE POSTED BY FEBRUARY 16TH SO PLEASE DON'T DELAY! I am asking for your help. Please pass this information on to everyone you know who has an interest in residential real estate.
"This law was not intended to disenfranchise retirees who have invested in residential rental houses for the sole purpose of funding their retirement. Those who have worked hard to buy residential property and to pay off or pay down their mortgage debt during their income earning years should not be compelled to become licensed under the S.A.F.E. Mortgage Licensing Act in order to sell their properties and carry back the financing (to fund their retirement). The S.A.F.E. Mortgage Licensing Act which was enacted on July 30, 2008 did not preclude unlicensed owner financing transactions between a willing buyer and seller. HUD's proposed rules in Section II F mention the sales of owner occupied residences as an exception to their proposed licensing law; however, there is no exception mentioned for non-owner occupied residential property.
Section 453 of the Internal Revenue Code allows for the reporting of gain using the installment sale method. This may no longer be available for residential investment properties if HUD's proposed rule is not clarified to exclude owner extended financing.
The United States Constitution upholds and protects private property rights. Telling owners that they cannot sell their properties and carry back financing would be a taking away of those rights and would slow the sale of residential property when commercial financing is scarce, thereby reducing property values. If HUD's proposed rules take effect as proposed, retirees may have to discount their equities to sell and will have limited opportunities to invest for a safe and fair return given the marketplace today. I do not believe that this is the intent of this law."
David Tilney
Keyper Corporation
Click here (to see the Call to Action email received)
Click here (We need to spend time to protect our freedoms)
"This law was not intended to disenfranchise retirees who have invested in residential rental houses for the sole purpose of funding their retirement. Those who have worked hard to buy residential property and to pay off or pay down their mortgage debt during their income earning years should not be compelled to become licensed under the S.A.F.E. Mortgage Licensing Act in order to sell their properties and carry back the financing (to fund their retirement). The S.A.F.E. Mortgage Licensing Act which was enacted on July 30, 2008 did not preclude unlicensed owner financing transactions between a willing buyer and seller. HUD's proposed rules in Section II F mention the sales of owner occupied residences as an exception to their proposed licensing law; however, there is no exception mentioned for non-owner occupied residential property.
Section 453 of the Internal Revenue Code allows for the reporting of gain using the installment sale method. This may no longer be available for residential investment properties if HUD's proposed rule is not clarified to exclude owner extended financing.
The United States Constitution upholds and protects private property rights. Telling owners that they cannot sell their properties and carry back financing would be a taking away of those rights and would slow the sale of residential property when commercial financing is scarce, thereby reducing property values. If HUD's proposed rules take effect as proposed, retirees may have to discount their equities to sell and will have limited opportunities to invest for a safe and fair return given the marketplace today. I do not believe that this is the intent of this law."
David Tilney
Keyper Corporation
Click here (to see the Call to Action email received)
Click here (We need to spend time to protect our freedoms)
CALL TO ACTION
I received the following email yesterday. I think it is very important and hope that many will read and act on it.
PLEASE HELP!
David Tilney
Keyper Corporation
*************************************
Dear REIA Members:
The following information is extremely important!
HUD Issues Problematic Rules Interpreting SAFE Mortgage Licensing ACT
HUD has proposed to eliminate ALL seller financing unless the seller lives in the home or becomes a licensed mortgage originator. The proposed HUD Rules interpreting the federal SAFE mortgage act can be viewed at www.regulations.gov Use the search parameter "HUD" and the keyword “safe”. Please review and comment regarding the impact of this broad interpretation of the law.
“In addition to establishing HUD’s responsibilities under the SAFE Act, through this rule, HUD proposes to clarify or interpret certain statutory provisions that pertain to the scope of the SAFE Act licensing requirements and other requirements that pertain to the implementation, oversight, and enforcement responsibilities of the States. HUD solicits comment on the proposed clarifications and on the regulations proposed to be codified."
History:
As you may recall, we lobbied hard last year to maintain the right for individuals to make up to five seller financed transactions per year before being subject to mortgage originator licensing, etc... However, that law was passed subject to the Department of Housing and Urban Development's (HUD) approval of the law as "compliant" with the intention of the federal law. If any state does not have a compliant law, the SAFE act allows HUD to implement licensing for the state. HUD has since issued proposed rules. In a nutshell, seller financing would no longer be allowed for non-owner occupied homes.
How YOU can help:
We learned about the publishing of the rules very late in the process... and the deadline for comment is upon us on February 16. However, we desperately need for thousands of REIA members across the country to go on record with HUD on this issue. We will be working to try to affect this law in other legislative ways, but cannot hope to gain traction unless our members have clearly communicated that they are opposed to this portion of the rules. This is your chance to be counted on this issue.
PLEASE SUBMIT YOUR COMMENTS TO HUD! We have less than one week to flood this system with comments.
Follow these simple steps:
1. Logon to www.regulations.gov You will see two white boxes for searching
2. On the left box labeled "Document Type", pull the menu down and select "proposed rules"
3. On the right box labeled "Enter keyword or ID", enter "safe mortgage". Then, press search
4. Locate the blue search result "FR-5271-P-01 Safe Mortgage Licensing Act: HUD Responsibilities Under ...." To read the rules, click on this title. You will be taken to another page. You will see "views". You can click on PDF file or another symbol which will show you the rule document online.
5. On the right of the screen, click on "submit comment"
6. Complete the form providing required information and your comments and then submit
What do you say?
Say what you feel, but say it politely! The message should include that you would like the definitions in the proposed rules to be changed so that private individuals can originate and service loans on properties they personally own. Some ideas from others:
• bank loans are not available on some types of properties
• the tight lending climate has made bank financing "out of reach" for many
• seller financing is an "age old" tradition based on private property rights
• these rules would prohibit even partial seller financing - i.e. a "seller second"
• according to HUD's "Residential Finance Survey" in 2001, roughly 40% of all non-farm residential properties in the US are owned free and clear
• an estimated 6 million Americans own a property other than their own primary residence
• an estimated 4.5% of Americans own three or more properties, many purchased solely as investment properties
• 40% of non-owner occupied residences are mobile homes which are more difficult to sell with bank financing
• approximately 5% of homes in US are for sale or for lease... seller financing may be key to liquidating this inventory
The continued success of our industry as we know it is threatened by these proposed regulatory changes. Please do not hesitate to follow the steps above and make your voice heard.
***************************************
Link (to post public comments regarding HUD's proposed rules)
Click here (we need to spend time to protect our freedoms)
Click here (my comments posted to HUD)
PLEASE HELP!
David Tilney
Keyper Corporation
*************************************
Dear REIA Members:
The following information is extremely important!
HUD Issues Problematic Rules Interpreting SAFE Mortgage Licensing ACT
HUD has proposed to eliminate ALL seller financing unless the seller lives in the home or becomes a licensed mortgage originator. The proposed HUD Rules interpreting the federal SAFE mortgage act can be viewed at www.regulations.gov Use the search parameter "HUD" and the keyword “safe”. Please review and comment regarding the impact of this broad interpretation of the law.
“In addition to establishing HUD’s responsibilities under the SAFE Act, through this rule, HUD proposes to clarify or interpret certain statutory provisions that pertain to the scope of the SAFE Act licensing requirements and other requirements that pertain to the implementation, oversight, and enforcement responsibilities of the States. HUD solicits comment on the proposed clarifications and on the regulations proposed to be codified."
History:
As you may recall, we lobbied hard last year to maintain the right for individuals to make up to five seller financed transactions per year before being subject to mortgage originator licensing, etc... However, that law was passed subject to the Department of Housing and Urban Development's (HUD) approval of the law as "compliant" with the intention of the federal law. If any state does not have a compliant law, the SAFE act allows HUD to implement licensing for the state. HUD has since issued proposed rules. In a nutshell, seller financing would no longer be allowed for non-owner occupied homes.
How YOU can help:
We learned about the publishing of the rules very late in the process... and the deadline for comment is upon us on February 16. However, we desperately need for thousands of REIA members across the country to go on record with HUD on this issue. We will be working to try to affect this law in other legislative ways, but cannot hope to gain traction unless our members have clearly communicated that they are opposed to this portion of the rules. This is your chance to be counted on this issue.
PLEASE SUBMIT YOUR COMMENTS TO HUD! We have less than one week to flood this system with comments.
Follow these simple steps:
1. Logon to www.regulations.gov You will see two white boxes for searching
2. On the left box labeled "Document Type", pull the menu down and select "proposed rules"
3. On the right box labeled "Enter keyword or ID", enter "safe mortgage". Then, press search
4. Locate the blue search result "FR-5271-P-01 Safe Mortgage Licensing Act: HUD Responsibilities Under ...." To read the rules, click on this title. You will be taken to another page. You will see "views". You can click on PDF file or another symbol which will show you the rule document online.
5. On the right of the screen, click on "submit comment"
6. Complete the form providing required information and your comments and then submit
What do you say?
Say what you feel, but say it politely! The message should include that you would like the definitions in the proposed rules to be changed so that private individuals can originate and service loans on properties they personally own. Some ideas from others:
• bank loans are not available on some types of properties
• the tight lending climate has made bank financing "out of reach" for many
• seller financing is an "age old" tradition based on private property rights
• these rules would prohibit even partial seller financing - i.e. a "seller second"
• according to HUD's "Residential Finance Survey" in 2001, roughly 40% of all non-farm residential properties in the US are owned free and clear
• an estimated 6 million Americans own a property other than their own primary residence
• an estimated 4.5% of Americans own three or more properties, many purchased solely as investment properties
• 40% of non-owner occupied residences are mobile homes which are more difficult to sell with bank financing
• approximately 5% of homes in US are for sale or for lease... seller financing may be key to liquidating this inventory
The continued success of our industry as we know it is threatened by these proposed regulatory changes. Please do not hesitate to follow the steps above and make your voice heard.
***************************************
Link (to post public comments regarding HUD's proposed rules)
Click here (we need to spend time to protect our freedoms)
Click here (my comments posted to HUD)
Monday, January 25, 2010
Key Control - CONVENIENCE OR SECURITY
Most landlords don't realize that tenant safety decreases and landlord liability increases when a master key system is used for rental properties. The truth is that convenience and key storage should not dictate that one key be used for multiple properties.
David Tilney has lived in Naples FL with his wife Mary since 2002. He and his wife manage rental houses in Colorado Springs CO without employees. David also teaches landlords across the country how to enjoy managing their property while avoiding potential pitfalls along the way.
- The loss of the master key or the termination of a trusted employee or contractor can be an expensive crisis depending on the number of locks that necessitate re-keying.
- Master keying makes the lock more susceptible to manipulation since multiple combinations of key cuts will open the lock. This means that those with little understanding of locks maybe able to open the lock with just a paperclip and a small screw driver.
- Landlords don't realize that anyone with a key to one lock in a master keyed system can easily make a master key to the entire system in about 5 minutes without taking apart any lock. All that is needed is about seven key blanks and a small metal file. (The NY Times published an article showing the world this in January of 2003.)
David Tilney has lived in Naples FL with his wife Mary since 2002. He and his wife manage rental houses in Colorado Springs CO without employees. David also teaches landlords across the country how to enjoy managing their property while avoiding potential pitfalls along the way.
Wednesday, January 13, 2010
Lead Paint - TO TEST OR NOT TO TEST...
Generally owners of pre-1978 houses don't test properties for lead-based paint. They don't want to know if lead exists since testing results must then be given to everyone who wants to rent or buy. I take a different approach. Testing shows both where lead exists on the property and where it does not. Painting, repairing and renovating areas that do not contain lead-based paint do not require hiring certified lead-paint contractors to do the work. Lead paint was expensive and was generally used only on the exterior of properties because it held up better in the elements.
This summer we had 7 properties tested for lead-based paint by a certified lead-paint risk assessor using an XRF (X-Ray Fluorescence Spectrometer) machine. These properties were built between 1951 and 1973. All houses were found to be "lead safe" and only the mailbox post at one location was found to have lead paint. We have since written to all owners of houses we sandwich lease suggesting that they have their houses inspected. All but one owner have asked us to test to test their properties so I will update the results in a future post.
Click Here To See My Previous Lead-Paint Post
David Tilney has lived in Naples FL with his wife Mary since 2002. He and his wife manage rental houses in Colorado Springs CO without employees. David also teaches landlords across the country how to enjoy managing their property while avoiding potential pitfalls along the way.
This summer we had 7 properties tested for lead-based paint by a certified lead-paint risk assessor using an XRF (X-Ray Fluorescence Spectrometer) machine. These properties were built between 1951 and 1973. All houses were found to be "lead safe" and only the mailbox post at one location was found to have lead paint. We have since written to all owners of houses we sandwich lease suggesting that they have their houses inspected. All but one owner have asked us to test to test their properties so I will update the results in a future post.
Click Here To See My Previous Lead-Paint Post
David Tilney has lived in Naples FL with his wife Mary since 2002. He and his wife manage rental houses in Colorado Springs CO without employees. David also teaches landlords across the country how to enjoy managing their property while avoiding potential pitfalls along the way.
Sunday, January 10, 2010
April 22, 2010 - AN IMPORTANT DATE FOR HOUSE INVESTORS
If you own rental property that was built prior to 1978 you will find that your operating costs are going to increase after April 22nd of this year. That is the day that you are required to use certified lead-based paint contractors to perform any repairs, painting or renovations that disturb 6 square feet (or more) of painted surfaces per room for interior activities or 20 square feet (or more) of painted surface for exterior activities. There are very few exceptions to this law and penalties can be high for non-compliance.
The problem with this new law is that trades people who have the skill set we need to solve problems may not have the proper certification. Additionally, the protocol required for painting, repairing or renovating pre-1978 houses will add to their operating expenses. We believe pre-1978 properties will become stigmatized and could be devalued by this law unless we can demonstrate that the properties are, in fact, lead safe. Some property managers have stated they no longer want to handle properties that were built prior to January 1, 1978 because of the additional work and liability involved.
Click Here For a Possible Solution
David Tilney has lived in Naples FL with his wife Mary since 2002. He and his wife manage rental houses in Colorado Springs CO without employees. David also teaches landlords across the country how to enjoy managing their property while avoiding potential pitfalls along the way.
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