Read all about it at http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2009/HUDNo.09-231
This "Safe" act appears to be yet another way that the federal governmentwill inhibit the free market. The concern is that this will inhibit an owner from selling their property themselves, and carrying a contract on it. I believe we must remember when inflation sets in, and dont be fooled it must set in in order to get all of this printed money back off the streets, or our dollar will continue to devalue itself, our industry, and our sellers will turn to the "Real Estate Contract" to level us out. We mus all remember the savings an loan fiasco, and what happened then, interest rates soared in to the high teens, and low 20 percentile. How many of us have buyers that could afford that right now, so it will be imperative to keep the housing market alive for sellers to be able to carry contracts, and be able to keep the flow.
I believe that we must remember that wherever there is a buyer and a seller willing to negotiate, that is what keeps the market flowing, not our federal government stepping in with yet another regulation.
Comments
I know some institutions that got in a lot of trouble for these practices, and some of the institutions that even had radio shows where they will tell this to the audience were closed by the feds and some loan officer did or are doing time.
The SAFE act is meant to make sure loan officers are professionals well trained and have a clean record, in Maryland they must have a criminal check. This act is not affecting hard money lender or owner finance, but the RESPA rules protect the buyer making sure the promise rate and monthly payments matches the HUD1 and that they understand the process and their finances, this is designed to avoid foreclosures. In the past some buyers got into loans and houses were they didn't have any business getting into. I know a lady who makes $10 as a janitor in an office building, she got into a $300,000 mortgage, the loan officer and agent told her that in order for her to get closing cost help she needed to increase the price from $280K to $300K and she put $40K down payment. she paid $900 for the first year then the loan adjusted and it wen to $2100 a month, now she had to short sale her house, for $200K.
It is important for loan officer and lender to be more accountable, if you look at the transaction we agents have agency with our clients, we have a legal and moral obligation with them. Loan officer don't have that. and banks and some lenders are not require to have license loan officer. I remember a branch of Countrywide in my area were they didn't have loan officer but rather document collectors, we all know what happened to them.