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Seller Financing

In some situations, sellers are lining Lending Standards, Seller Financing. CFPB
Finalizes Loan 2013, The Consumer Financial Protection Bureau
www.realtor.org/topics/seller-financing – 2012-03-15

Seller Financing May Be Worth Exploring | Realtor Magazine

In today’s stymied real estate market, lenders are more cautious about making loans and sellers are more inclined to agree to carry financing to sell their properties more quickly. Here’s a look at how installment sales could work for your clients.
realtormag.realtor.org/law-and-ethics/law/article/2008/12/seller-financing-may-be-worth-exploring – 2008-12-01

Get Seller Financing to Work for You | Realtor Magazine

Seller financing has been a hot issue in recent real estate news due to the changes in regulations, specifically in the Dodd-Frank Act. Here’s what you need to know to incorporate this method into your business strategy and be the best advocate for your clients.
realtormag.realtor.org/law-and-ethics/feature/article/2015/04/get-seller-financing-work-for-you – 2015-04-06

Seller Financing: Background

Seller financing is subject to new rules following the passage of financial reform legislation. Know these changes in order to serve sellers better.
www.realtor.org/topics/seller-financing/background – 2012-01-17

My Account

Seller financing plays an important role in financing the sale of real estate, especially when credit is tight. This paper summarizes the impact of two federal laws that affect seller financing. Seller financing plays an important role in financing the sale of real estate, especially when credit is tight. This paper summarizes the impact of two federal laws that affect seller financing.
www.realtor.org/reports/seller-financing-impact-of-the-safe-act-and-the-dodd-frank-act – 2012-01-12

Sales Clinic: Expand Your Market with Seller Financing | Realtor Magazine

Are there any creative ways to sell a home that will maximize the salesperson’s value? —Timothy Baker, RE/MAX Affiliates, Naperville, Illinois If you want to be a top salesperson, you always have to be on the lookout for new and creative ideas to set yourself apart from the pack.
realtormag.realtor.org/…/feature/article/1999/12/sales-clinic-expand-your-market-seller-financing – 1999-12-01

Ways to Protect Yourself Under Seller Financing | Realtor Magazine

TIP: Instead of taking back an installment loan, per se, have the buyer purchase an annuity or some zero-coupon bonds in your name. These can often be bought at deep discounts to eventual payout, lowering the sale price, but guaranteeing you a higher future return.
realtormag.realtor.org/…/sell-your-business/article/ways-protect-yourself-under-seller-financing

NAR Submits Comments on CFPB’s Proposed Seller Financing Rules

On Oct. 15, 2012, NAR President submitted comments to the CFPB on its loan originator proposed rule. On Oct. 15, 2012, NAR President submitted comments to the CFPB on its loan originator proposed rule.
www.realtor.org/articles/nar-submits-comments-on-cfpbs-proposed-seller-financing-rules – 2012-10-19

Sellers Can Fill a Void | Realtor Magazine

If you’re working with sellers who have seen offers collapse because buyers can’t get a mortgage loan, you might want to suggest they consider offering some variation of seller financing.
realtormag.realtor.org/law-and-ethics/law/article/2011/07/sellers-can-fill-void – 2011-07-01

Seller Financing: The SAFE Act

In 2008, President Bush signed the Secure and Fair Enforcement of Mortgage Licensing Act or SAFE Act, which requires licensing and registration of loan originators.
www.realtor.org/topics/seller-financing/the-safe-act – 2012-03-15
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Subject To in Texas – Coming Unwrapped

Article from BiggerPockets:

Subject To in Texas – Coming Unwrapped

Saw this news today and decided to share it on here.  The story is still developing but I think those who seek to do wraps, especially folks in the state of Texas, since that is where this is, should pay attention to how this is treated and the direction the state agencies take the charges.

When stories like this make headlines other folks who maybe Sellers into wraps may sit up and pay attention then wondering about their situation.  In the follow up story the company is being charged $1.0 Million in restitution.

More

 

Continue Reading…

El Paso Home Buyers, LLC, has never been a licensed residential mortgage loan company nor a residential mortgage loan servicer in Texas

At least 200 families in El Paso might have fallen victims to a real estate scam by an unlicensed company that is buying and selling homes without clear liens, according to Texas RioGrande Legal Aid, which is representing at least seven affected families.

Texas RioGrande Legal Aid claims that brothers Geoffrey and Thomas Schober, owners of El Paso Home Buyers, buy and sell houses fraudulently through “wraparound” mortgages, which means the original homeowner’s name is never taken off the mortgage.

“In representing these clients, TRLA uncovered a practice in which the Schobers sold houses through wraparound mortgages to defraud both homeowners and homebuyers out of nearly two million dollars over the last six years,” the Texas RioGrande Legal Aid said in a statement that urges prosecutors to begin a criminal investigation against the Schobers.

The Texas RioGrande Legal Aid argues that homeowners who are desperate to sell their homes, sell their property to the Schobers assuming their name will come off the mortgage loan. The Schobers then re-sell the house — with the first liens still attached to the home — to people who typically do not qualify for a bank loan and collect about $10,000 in down payment. Then the new homeowners make monthly payments to the Schobers thinking that the money is going toward the payment of the house.

However, the Texas RioGrande Legal Aid said that in many cases the Schobers do not pay the mortgages that are still under original owner’s names, resulting in foreclosures and evictions.

After Texas RioGrande Legal Aid filed numerous complaints, the Texas Department of Savings and Mortgage Lending last week issued cease and desist orders to the Schobers and El Paso Home Buyers LLC. The state order prevents them from selling more houses and stops their company from making loans and collecting payments from homebuyers.

The orders state that El Paso Home Buyers LLC has never been a licensed residential mortgage loan company, nor a residential mortgage loan servicer in Texas. The Schobers have 30 days to appeal the orders.

“The Department has concluded that Mr. Schober originated more than five mortgage loans within a 12 month period without being licensed with this Department,” the order states.

“When Mr. Schober failed to pay the first mortgages, the consumers learned of the wrap-around mortgages when the first lien holders began foreclosure proceedings. Several consumers have been evicted as a result of Mr. Schober failing to pay the first mortgage,” according to the order.

K-Sue Park, an attorney with Texas RioGrande Legal Aid, said the cease and desist orders were issued by the Texas Department of Savings and Mortgage Lending after learning that of more than 100 properties that the Schobers sold to homebuyers with mortgages under other people’s name, 85 percent to 90 percent were lost to foreclosure last year.

Last week, Park filed two civil lawsuits on behalf of the families.

The Schobers could not be reached for comment.

David Pineira said he purchased a home from the Schobers in July 2010, but he lost it last year after the Schobers stopped paying the mortgage.

Pineira said at the time he was 22 years old and did not have any credit history. He said he saw a yellow sign on the street that said, “Three bedroom house for sale. No credit history. $10,000 down payment.”

Pineira said he called the number on the sign and the Schobers found him a home. Pineira said he gave the Schobers a $10,000 down payment and for five years he gave $728 monthly payments to the Schobers.

Pineira said he was never late on the house payments and he invested thousands of dollars in the house thinking that it was his. He installed a new roof, a new air conditioning system, remodeled the bathrooms and added new windows and landscaping. But everything was lost last year when he received a notice of eviction, he said.

“They were not paying the original loan. All notices for foreclosure were going to the original homeowner,” he said.

Pineira said he lost his home, but somebody else lost their credit.

Adriana Murillo also responded to one of the street signs and bought her house through the Schobers in 2009. About three years ago, she received a letter in the mail addressed to the El Paso Home Buyers stating that the property was behind on payments. Murillo said she reached out to the lender and was told that she was not recognized as the owner of the house.

She then contacted Thomas Schober, who ended up paying the balance. Murillo said she now pays directly to Kaplan’s Mortgage Co. in Downtown El Paso, but the account is still under El Paso Home Buyers’ name.

Murillo said the purchase of the home has given her a lot of problems, but she has decided to fight for it because it’s all she has. She said she has made the payments on time with a lot of sacrifice.

Patsy Lopez, assistant county attorney, said currently the County Attorney’s Office does not have any cases against the Schobers. The County Attorney’s Office handles deceptive business practices cases.

Lopez said people are encouraged to file a report with the Police Department or the Sheriff’s Office for the attorney’s office to be able to look into a case.

Pineira said he reached out to law enforcement to report the case, but he was turned away by El Paso Police Department and El Paso County Sheriff’s Office. He then reached out to El Paso County’s office, which did not help him either. The El Paso County Sheriff’s Office on Tuesday said that because Pineira’s residence was within El Paso city limits, he needed to file a report with El Paso Police Department.

Murillo said she also reached out to the Police Department, but nothing has been done.

On Tuesday, El Paso police spokesman Darrel Petry said currently the department has ongoing investigations against the Schobers and their company El Paso Home Buyers, but declined to answer any other questions or provide any specifics on the investigations.

Complaints against the Schobers and their company by other alleged victims have been featured by Channel 14-KFOX and Channel 26-KINT in the past.

Aileen B. Flores may be reached at 546-6362; aflores@elpasotimes.com; @AileenBFlores on Twitter. 

How does a wraparound sale typically take place?

  • Homeowners with a mortgage lien decide to sell their home or to work with another person offering to sell their home for them to buyers who cannot obtain traditional bank loans to finance the purchase.
  • The person in charge of the sale will put up signs advertising the home (“For Sale” or “We Sell Houses”).
  • The buyer will contact the person in charge of the sale.
  • The buyer provides little or no proof of qualifying for the loan (“No Credit! No Credit Checks!”).
  • The sale typically does not take place at a title company.
  • The buyer typically receives a written contract and a Wraparound Warranty Deed. He or she may also receive a Deed of Trust and a Promissory Note. 
  • The buyer typically gets no warning that a first lien exists on the home.
  • The buyer gives the seller (or the person in charge of the sale) a down payment, moves in and begins making monthly payments to the seller.

Source: Texas RioGrande Legal Aid 




One of my favorite REI Sources is Cameron Dunlap, a serious REI in NY, who coaches many people in buying and selling houses.

I hope you enjoy his article here…..

All the best to you,

Brian

—————————————————————————————————

In a “Buyer’s Market”, where houses sit with little activity and prices stagnate or fall, it’s VERY easy to get great deals.

You can buy so cheap and so often your head will spin. It’s simple to get really good deals because they’re everywhere.

Then… your challenge is to sell but that’s easy too, when you know how.

I’ll address this here. This is where conventional wisdom steps in and will convince you that the opportunity ends… if you let it.

What most people don’t know is that if you are aware of the market conditions and, you know how to play the game, either type of market is good. It’s just a question of knowing how to do the business in the current, given, environment.

Think about the current market.

Sales have slowed, prices have leveled off and in some cases are falling and what this has caused is for many investors that have been in the business for the last few years to loose heart and in many cases GET OUT!
That’s good.

The fact is, if you don’t know what you’re doing, this market and what’s likely to follow doesn’t look good at all.

If you do know what you’re doing this market is the most exciting you’ve seen in a good 7 or 8 years and the best part is…the competition is leaving! Buh Bye!!!

So, no matter what anyone tells you… take it from someone who’s seen the cycles and been to the school of hard knocks. This is about the best time to get in or be in the business as is humanly possible.

Don’t listen to the untrained doomsayers and certainly don’t try to convince them they are wrong. Let them leave. Let them get out of your way and my way.

Think of the law of supply and demand. It ALWAYS prevails.

If foreclosures are up, houses are staying on the market longer and in general supply is up, that’s good.
Then consider all the untrained (I call them $9 book pinheads) investors that are leaving because properties are no longer appreciating 35% per year. Demand is down appreciation has leveled off and that’s good.

It all equates to more GREAT deals for you and me.

It’s important to realize that in this environment, appreciation is all but a fantasy that you can’t count on. I learned this when I got in the business in 1993, when appreciation was a bonus if I was lucky. It was a time when appreciation pretty much didn’t exist.

In the absence of appreciation, we make up for it by buying better.   Getting better deals. You know the old saying… “You make your money when you buy”.

While it’s true that you get your pay check when you sell, that old saying REALLY holds true in a Buyer’s Market. You’ve GOT to buy right.

Ok, so now to the burning question in your mind.

How are we going to sell?

If it’s simple to find great deals but it’s hard to sell. How are we going to see the big bucks?
Easy.

In every Buyer’s Market, you’ll need to plan to sell in one of the following 3 tried and true ways, and you will cash in while others are bailing out.

First is on “Quality”.

  1. Meaning you rehab the house and the others like it on the market, and make it pale by comparison.

The few qualified buyers in the market will want your house because it’s the best one in their price range and in the area.

2.   Or, on “Terms”.    Meaning we take payments on the house and focus on folks that have credit problems and can’t go to the bank.   We use a Lease Option or Seller Financing.

Think about this. Every borrower that loses their house to foreclosure because their ARM adjusted them right out of the picture is now a potential buyer for the houses you sell on terms.

3.  Then there’s “Discount. Meaning we sell the house at below market value and beat the competition by being cheap.

This can be the case when we’re wholesaling Junkers to rehabbers or when we’re selling houses that are in good shape but don’t qualify for the “quality” angle.

An example being we take the deed from a seller who’s house is pretty but that we are not going to rehab.

So, 1. Quality, 2. Terms or 3. Discount. Pick one.

Focus on those exit strategies and buy according to the one that fits the property and the deal and you’ll ROCK this business at a time and point where your $9 book pin head competitors are jumping like rats from a sinking ship.

To to summarize…

  • DON’T listen to conventional wisdom, it’s a trap for the broke.
  • DO look at today’s market as one of the greatest opportunities we’ve see in years.
  • DO make sure you buy RIGHT, there’s just no excuse not to. It’s a Buyer’s Market!
  • DO be sure to decide how you’re going to sell before you make your offer.
  • Then finally… DO get going.
  • This business is outrageously profitable and outrageously doable, regardless of the market conditions at any one point in time, when… you know what you’re doing.

So get trained and get in the game NOW!

Your timing couldn’t be better.

Cameron Dunlap
www.CameronDirect.com
A Free Resource For Real Estate Entrepreneurs

Seller Financing and Lease Options It is all about the TERMS of the Deal – If you can not get the PRICE low, get great TERMS – Good with little equity or sellers who can wait for their cash – Exit Strategy is either Sell It or Keep It – Create No Qualifying Financing for YOURSELF or YOUR NEW BUYER.