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Act NOW or HR-4173 Could Put You Out of Business!
by Kelly Troy on June 26th, 2010
(Courtesy of Note Servicing Center, Inc.)
Congress, which is primarily under one-party rule, is again taking steps to overreach their constitutional boundaries and ruin your investing business. If you do not act now, they WILL be successful!
First the SAFE ACT, which required private investors and many private citizens selling their own property to obtain a Loan Origination License and Real Estate Brokers involved in seller financing to obtain an Endorsement on their License; and NOW along comes another 1900 page regulation – HR 4173. Take particular attention to Section 1073 and 1074 of the Bill which has provision for the government to regulate Equity Lending, Private Investor Loans and seller financing.
If you are a Private Lender, a Note or Loan broker, or an Investor HR 4173, the Wall Street Financial Reform Bill is making its way through the Senate. It has the power to put you out of business. If you are a developer/builder with plans to sell those lots or build houses on them and sell them, you may be surprised to find out you must meet the requirements set forth in HR 4173.
Your Representatives and Senators need to be contacted as well as the Conferees who will have final decision as to the inclusion of Section 1073 and 1074. Please review the draft letter (click her – ready to cut and paste on to your own letterhead) and the Fact Sheet (bottom of this post). Both items should be e-mailed or faxed to your Congressman. The 5th paragraph has a bolded sentence where you MUST personalize or remove the sentence. If you are not sure who your representative is, check this site: http://www.congress.org/congressorg/dbq/officials
The following is a list of the Conferees.
PLEASE contact them also with the suggested “draft letter” and fact sheet.
House Democrats:
Financial Services Chairman Barney Frank of Massachusetts
Howard L. Berman of California
Leonard L. Boswell of Iowa
John Conyers Jr. of Michigan
Elijah E. Cummings of Maryland
Luis V. Gutierrez of Illinois
Paul E. Kanjorski of Pennsylvania
Mary Jo Kilroy of Ohio
Carolyn B. Maloney of New York
Gregory W. Meeks of New York
Dennis Moore of Kansas
Gary Peters of Michigan
Collin C. Peterson of Minnesota
Bobby L. Rush of Illinois
Heath Shuler of North Carolina
Edolphus Towns of New York
Nydia M. Velázquez of New York
Maxine Waters of California
Melvin Watt of North Carolina
Henry A. Waxman of California
House Republicans:
Financial Services ranking member Spencer Bachus of Alabama
Joe L. Barton of Texas
Judy Biggert of Illinois
Shelley Moore Capito of West Virginia
Scott Garrett of New Jersey
Sam Graves of Missouri
Jeb Hensarling of Texas
Darrell Issa of California
Frank D. Lucas of Oklahoma
Ed Royce of California
Lamar Smith of Texas
Senate Democrats:
Banking, Housing and Urban Affairs Chairman Christopher J. Dodd of Connecticut
Tom Harkin of Iowa
Tim Johnson of South Dakota
Patrick J. Leahy of Vermont
Blanche Lincoln of Arkansas
Jack Reed of Rhode Island
Charles E. Schumer of New York
Senate Republicans:
Banking, Housing and Urban Affairs ranking member Richard C. Shelby of Alabama
Saxby Chambliss of Georgia
Bob Corker of Tennessee
Michael D. Crapo of Idaho
Judd Gregg of New Hampshire
The National Association to Protect Private Property Rights is a new Association formed to represent the rights of Citizens involved in Private Financing. The Association has hired an experienced lobbyist to represent them in Washington. Frankly donations are needed to pay the National Lobbyist, Barry Lefkowitz. To support this effort a tax deductible gift of $100 or more would be greatly appreciated.
Please send to:
National Association to Protect Private Property Rights (NAPPPR)
1725 East South Lake Blvd. Ste. #102
South Lake, TX 76092
Fact Sheet
Wall Street Reform and Consumer Protection Act
Sections 1073 and 1074 of the Senate Version contain sections that will impose severe restrictions on “seller carry-back” financing of real property (commercial, residential and agricultural), i.e. such a seller will only be allowed to finance one property every 36 months. Seller financing is a successful financial tool for small businesses and minorities alike.
The unintended negative consequences of these 2 sections are enormous:
1) Limits credit in urban and rural areas where institutional financing is scare.
2) Many times, seller financing is the only alternative available on properties in need of rehabilitation and renovation. Banks and institutional lenders are wary of lending on such properties. With less properties being renovated, less jobs in the construction trades will be needed, leading to even more unemployment and blight.
3) Many seniors contemplating retirement were counting on selling their rental properties and holding the mortgage (owner financing) and living on the monthly payments received. As bank accounts are paying 1-1.5%, the opportunity to earn 5-6% on Seller carry-back financing can be the difference between living their golden years independently or living in poverty.
4) Real estate will soften even more as there will be less capital and / or credit available to keep the market moving. Property under $60,000 is not likely even to be considered by financial institutions for loans.
5) Houses will become less affordable. Banks charge points, application fees; escrows, etc that often exceed $7,000 – $10,000 or more in closing costs. Seller carry-back financing rarely involves points, application fees, etc.
Currently there is a bill in the House Ways and Means Committee; HR 3440 “The Installment Sale Bill” that would have the opposite effect of the two sections described above than HR 4173. This bill would allow “dealers” to take installment sale tax treatment. It would have the effect of opening credit at no cost and expense to the US taxpayer, create jobs and increase revenues to the government. Rep. Bill Pascrell and Rep. Peter Roskam are the primary sponsors. Other sponsors include Rep. Adler and Rep. Andrews from NJ and Rep. Eric Cantor from VA.
We would urge the members of the Conference to seek to have the provisions discussed above eliminated from the final draft. Allowing them to remain will cause financial problems our nation can ill afford and is contrary to public statements of opening the financial markets to the public and the importance of helping small businesses.
Modifications supported by:
National Association to Protect Private Property Rights
Texas Land Developers Association
NJ Association Real Estate Professionals
Seller Financed Note Industry
Real Estate Investor Organizations
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