What Property Owners Need to Know About the SAFE Act of 2008.
The SAFE Act improves the accountability and tracking of residential mortgage loan originators, enhances consumer protection, reduces fraud, and provides consumers with easily accessible information regarding the professional background of persons providing mortgage loan origination services. The SAFE Act's primary purpose is to place minimum licensure requirements on all mortgage-loan originators. However, the licensing requirements also expands to those who are offering to owner finance their investment or second home properties.
What does this mean to property owners and investors?
• A seller who wants to owner finance property must be licensed as a Residential Mortgage Loan Originator (RMLO) in ALL 1-4 family residential transactions that are not their primary residence or to a family member! (Property owners may finance the sale of their primary residence or provide financing to a family member without a license.)
• Applicants must complete education, submit fingerprints for background checks, pay association fees and pass an exam.
• Contrary to some rumors circulating, there are NO EXEMPTIONS for five or fewer transactions during a 12 month period.
UPDATE: The Department of Savings and Mortgage Lending has postponed the seller financing licensing requirement deadline until August 31, to allow time to discuss a proposal to allow sellers to finance up to 5 properties per year without a license. Stay tuned!
For more information, please visit the Texas Department of Savings and Mortgage Lending website.
Sources: Metrotex Realtor Assoc., www.HUD.gov, FDIC
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ReplyDeleteNice new look to the blog!
ReplyDeleteUpdate: The Savings and Mortgage Lending Commissioner has extended the licensing deadline--August 31, 2010. Remember, sellers will still have the option to offer financing for their primary residence and to immediate family members.
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