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Showing posts from February 15, 2011

UNSAFE: UNINTENDED CONSEQUENCES OF SAFE MORTGAGE LICENSING ACT OF 2008 MAKE IT HARDER FOR SOME LOCAL BUYERS TO FINANCE THEIR HOME PURCHASES

Local buyers hoping to finance their home purchases with a loan from a parent or other family member are going to need to change their plans. Quickly. Sellers offering financing to prospective buyers too.  As of January 1st, 2011, ONLY Illinois mortgage licensees, regulated/licensed banks, savings & loans, credit unions, insurance companies, and the like can make residential mortgages for gain or profit..

Non-interest bearing mortgage loans are still allowed.

The new rule was enacted to implement a Federal law intended to enhance consumer protection and reduce fraud in the mortgage industry. That protection it seems, comes at a cost. Consumers have no choice now. Licensed mortgage lenders are the only game in town. At least for residential transaction.

THE FEDERAL LAW:
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), was passed on July 30, 2008.  The federal obligated each of the 50 states to enact their own laws requiring licensure of mortgage loan …