SAFE Act for Colorado – Conclusions
(See an update to the post below here)
House Bill 09-1085 (download pdf copy here) outlines regulations effective August 2010 for mortgage loan originators. Each state is required to pass their version of the SAFE Act and this is Colorado’s version.
(See more links below if you are not in Colorado)
How does this bill effect Colorado real estate investors? Here are my own conclusions but of course I am not an attorney or giving any legal advice:
Does a seller need a license to sell us their home with owner financing?
No. “An owner of real property who offers credit secured by a mortgage or deed of trust on the property sold” is exempt.
Does a real estate investor need a license to sell to a buyer on owner financing?
No. See above. Transaction is exempt.
Does a private lender providing loans to real estate investors need to be licensed?
No. “Residential mortgage loan” means that it is primary used for personal, family, or household use that is secured by a deed of trust. The private loans we get are for business and investment use, therefore would not apply to private loans.
Sure glad I did not panic when all the hoopla about the HUD SAFE act started last year :)
Not in Colorado? Here’s more info…
- Safe Act for Texas – Update
- HUD proposes law that could affect seller financing
- Roop’s take on all the fear mongering around HR 1728
Comments below are welcome.
Regarding the safe act, is it necessary to be licenced to lease option a mobile home in a manufactured home community? I am a newly registered manufactured home dealer and am planning on doing many lease options and selling the options as investments. There is no bank lending on used mobile homes and this is the only way to keep working capital for continued growth.
Let me know what you think.
Thanks’
Paul Green
The SAFE Act applies to offering residential mortgage loans on residential real estate. On way to avoid the act is to buy on lease options or sell on lease options. A lease option is not considered a loan, and if it included an offer for financing at the end of the lease it would not apply to “vehicles” (mobile homes) just financing on real estate. Not legal advice :)
Not so in Montana. Turns out my state has been chomping at the bit to pass legislation like this for quite some time, and now that the feds have passed it, they’re going to enforce it to the fullest extent. Private lenders will have to be licensed to lend me money. That means my mother, who is my private lender, will have to get a license to loan me money.
Oh yeah, Wall Street and the Big Banks that are stealing trillions from all of us are exempt from this legislation. But don’t panic, that’s just a bunch of “hoopla”. It’s just another harmless piece of legislation from our silly old well-meaning Congress right? Nothing to worry about here, the “sky isn’t falling” or anything… The thousands of laws and hundreds of Executive Orders on the books right now are harmless aren’t they? Just a bunch of “hoopla”. As long as I’m still doing good, that’s all that really matters, right?
Maybe Goldman Sachs and BP dumping their stock a couple weeks before the oil spill is just a bunch of Hoopla too? Gee, I wonder how they knew to do that? I wonder how so many people knew to dump their American and United Airlines stock right before 9/11? Sounds like a bunch of “hoopla” to me! And please, whatever you do, don’t panic. You might wake up some people within your sphere of influence, and that’s the last thing we want. Then we’d have all kinds of Chicken Littles panicking all over the place! Just a bunch of little chickens running around talking about crazy stuff that has no basis in reality. Then we’d have to round them all up and incoculate them or if that doesn’t work, lock them up! We can’t have people talking about crazy conspiracy theories and “panicking” and disturbing the peace. Please, remain calm. Big Brother will be along shortly with a syringe and a billy club. Everything will be OK, as long as we don’t panic.
Richard,
Thanks for reviewing the legislation.
I guess the sky really isn’t falling after all( which is usually the case)!
Told ya so