Matt Speaks on Indiana’s new SAFE Act During TeleClass

Posted on | June 30, 2010 | 3 Comments

The Indiana SAFE Act regulates mortgage loan originators and mortgage transactions in Indiana, effective July 1, 2010. Surprisingly, it also regulates most land contract sales of residential properties. In this TeleClass, held on June 30, Matt talks about the new law and its wider implications. Listen in. . .

“MOST LAND CONTRACTS ARE NOW DEAD IN INDIANA”

Posted on | June 10, 2010 | 45 Comments

If you are engaging in any of these real estate transactions in Indiana, you should read this article-

● Selling residential property on land contract.
● Extending credit to any home purchaser.

In 2008, Congress passed and President George Bush signed into law the Housing and Economic Recovery Act, (Public Law 110-289) (HERA). HERA is designed to assist with the recovery and the revitalization of America’s residential housing market – from modernization of the Federal Housing Administration, to foreclosure prevention, to enhancing consumer protections. The SAFE Act is a key component of HERA.

The SAFE Act
The SAFE Act is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators. The SAFE Act requires states to have licensing and registration systems by July 31, 2010. Indiana’s SAFE Act law was passed last year and goes into effect in June 2010. An easier-to-read version of the Indiana law appears in the Indiana Administrative Code.

You Need a License, If You Are a “Loan Originator”
You need a loan originator’s license, if you are a loan originator as defined by the new Indiana law enforcing the SAFE Act. In a sentence, anyone who offers or provides a residential mortgage loan or extends credit for a home purchase is deemed a loan originator and is required to get a license.

“Anyone who offers or provides a “residential mortgage loan,” such as a land contract, is a loan originator and is now required to get a license.

You Might Be a “Loan Originator”
The SAFE Act defines “loan originator” as “an individual who (1) takes a residential mortgage loan application; and (2) offers or negotiates terms of a residential mortgage loan for compensation or gain.” This definition is broadly interpreted. If you sell a residential property on credit, such as is the case under a land contract, YOU ARE A LOAN ORIGINATOR under the SAFE Act.

Exclusions
There are exceptions under the SAFE Act. Here are a few:
• Selling a home you previously occupied/lived in as your residence.
• Certain clerical and administrative tasks.
• Selling a home to an immediate relative, as defined by the statute.
• Selling commercial buildings, as defined by the statute.
• An attorney who negotiates terms of a residential mortgage loan with a prospective lender on behalf of a client as an ancillary matter to the attorney’s representation of the client, unless the attorney is compensated by a lender, mortgage broker, or other mortgage loan originator or by an agent of such lender, mortgage broker, or other loan originator.

What Is a “Dwelling”
The SAFE Act’s definition of “residential mortgage loan” includes a loan secured by a consensual security interest on a “dwelling” and cross-references the definition of dwelling in section 103(v) of the Truth in Lending Act (TILA) (15 U.S.C. 1601 note). Regulation Z, which implements TILA, defines dwelling to mean “a residential structure that contains 1 to 4 units, whether or not that structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence.”

Conclusion.

Most small investors who sell residential property on land contract are now required to have a mortgage loan originator’s license. Obtaining a license is not easy, fast or cheap. As a result, most investor will no longer sell on land contract.

As always, feel free to contact this author for specific answers to your real estate investing and legal questions, or call for a consultation.   Good luck and Happy Real Estate Investing.

It’s a boy!

Posted on | June 5, 2010 | 6 Comments

I’d like to announce the birth of my son-

Blake Matthew Vivo Griffith

June 5, 2010 -  3:35 a.m.
7 lbs., 7 ounces
21.5 inches long

Baby and mom are doing great.  I’ll be in and out of the office next week.  Thank you for all the love, support and messages of encouragement.

Matt Appears on “The Buzz”

Posted on | June 4, 2010 | No Comments