Dodd Frank Act & FHA Guidelines

Thanks for visiting my blog.  Below is a video I just shot about how the Dodd Frank Act effects us as Real Estate Investors and also about how FHA’s new guidelines effectively mark the return of the sub-prime lending market.  After you’ve watched the video be sure to leave me a comment below. I want to know what you think about it.

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Don’t forget to leave a comment below to let me know what you think about this.

Cameron Dunlap

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9 thoughts on “Dodd Frank Act & FHA Guidelines

If you’re selling on terms to non-owner occupant, you’re into the commercial realm, not covered by Dodd-Frank. Get it in writing if you’re selling to a non-owner occupant to CYA. Like all other free advice, verify for yourself if you’re not sure.

Paul R Carraro Solution Homebuyers Tampa Bay FL USA says:

Excellent overview Cameron and thank you for posting this video. If you still do business in Florida where I live now long after meeting you in 2002 back when I lived in Virginia in the Metro DC area, perhaps there is some business to be done on the next deal. Below are a few points I note, but of course I am no attorney and I don’t have near Cameron’s experience.

1) Thos is correct that the law does not apply if you are doing a deal with any given owner who will not be an occupant of the subject property. All the same there are usury laws in some states that must be followed that require the inclusion of any points or fees in the calculation of the maximum interest rate. The latter is also a point overlooked greatly in private lending. Interest rates are still low though for the most part in most states, it’s not the free-for-all as it was with private money perhaps 10 years ago.

2) Lease Options – You had the best take on lease options I have ever heard, but if the option involves conversion later to owner financing too, as investors still we must be mindful. All the same beyond many concerns with the use lease options in my state of Florida, I was always wary about the practice taught in too many a seminar of giving credits towards the purchase price in some part for payments of rent on time by the optionee/tenant-buyer. Beyond any violation of Dodd-Frank as reference by Cameron let alone the scrutiny, such a practice though it improves cash flow would just strengthen claims of the optionee/tenant-buyer of equitable interest especially here in Florida where the average contested foreclosure case will take you as an investor at least 2 years!

3) Return of Sub-Prime Under the Covers – This was the best revelation of the year so far, and I note ironically that I just began working with my first buyer of the year who was FHA-approved this week even though the lender has other programs with low-money down and lower mortgage insurance premiums and fees.

Essentially the progression after any given economic decline or bust seems to be to allow for the return of the subprime lending category first much like after the .com bust back in 2000-2002. Back then the politics of the times weighed in for more ‘affordable housing’ and the like rhetoric, and it’s not surprising to me that here we are again and in a few years we’ll have another cycle of unintended consequences to go with any positive results.

It seems to me that aside from getting a mortgage licensee involved as a middleman, which is an idea I don’t favour myself either, working with the new law will also require other ideas for business organisation.

I’d rather spend my energy and resources working with new ways to do business legally in investment real estate, for I have more control over the choices, than to subject myself to the whims of yet another industry that was rightly overhauled recently before Dodd-Frank (which I agree goes too far) for which there will be even more change on which also I have absolutely no control.

A beautiful example of growing govt. Grow bigger and tax more. Govt knows best so, we should tell all of the participants how to do business.
Let the market place determine. Where does the experience lie?
Thanks, Cam, for presenting this.

I know that I’m new to the real estate business, but after lessening to you I feel like I;m apart of the business already. What I like about you is that you give assurance that every-thing you say is backed up with an very good example. And I must say that I can envision a turning point in my life much sooner than I thought.I’m comfortably secured and it feels good. I just want to thank you for allowing me to be apart of your inter circle!

I just completed one of several calls to FHA lenders in my area as I thought the information you provided might be helpful to folks I come in contact with but every lender said FHA requires a 620 score and 2 years removed from bankruptcy, 3 years from foreclosure. Are they right or is there somewhere I can point them to for an update?

instead of rent credits, have the seller offer a discount on the sale price at closing.
for any late payment by buyer you deduct an amount from the discount to keep payments on time.

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