REAL ESTATE: OBAMA STRIKES AGAIN

Dodd Frank Real Estate Basics, What It Is and How To Protect Yourself

Published July 10, 2014 | By ListedBY

Chris Dodd and Barney Frank have long since retired, but the namesake legislation they crafted four  years ago is about to unleash sweeping changes in the mortgage and real estate markets.
 

According to real estate attorney Shari Olefson, who also wrote the book Financial Fresh Start, the changes took effect January 1st and few people even know about them.
 

“It’s not a bad idea to have less risky loans,” she says in the attached video. “The problem is folks are just not really ready for this. Banks have been preparing for this for a while, but folks on the street are just not aware of it.”

What she’s talking about is the coming dawn of the qualified or ‘’safe harbor’’ mortgage era. 

“Here’s the problem. In order for banks to benefit from a ‘safe harbor’ against lawsuits by borrowers, the loans they issue now under Dodd Frank have to be considered qualified mortgages,” Olefson says.

Specifically, she says that means debt-to-income ratio cannot exceed 43%, points and costs cannot exceed 3% and banks must independently verify that a borrower “has the ability to repay” via eight different criteria.

While the all sounds logical and well intentioned, Olefson foresees some problems.

“Here’s the catch, about 20% of people who have mortgages right now, will not be able to get qualified mortgages.  So what’s going to happen to those people is they’re going to have to go elsewhere for the new mortgage loans, or banks will have to price them more expensively because they don’t have these protections against lawsuits.”

What that means, she says, is that “it’s starting to sound like we may be seeing what used to be sub-prime loans again,” as well as the reality that more people will be pushed into the rental market.

Again, while this may be news to Mom and Pop, institutional money has been pouring into residential, single-family homes for years, and Wall Street is now poised to collect rent-checks until the real estate market rebounds enough for a suitable return on investment. As she frames it, private industry is stepping in exactly as Uncle Sam is easing out of the mortgage business.

Olefson also points out that all of this comes at a time when homeownership levels are already falling, from a peak of 69% to just 63% today. It’s a trend she fears could carry huge societal ramifications given the fact that 75% of American wealth has historically come from home ownership, or as she calls it, “essentially a forced savings account.”

Mess with that safety net, and it’s easy to see why she says the ripple effects of unintended consequences could easily outweigh the benefits of a four year old law.

http://blog.listedby.com/knowledge-centre/dodd-frank-real-estate-basics-what-it-is-and-how-to-protect-yourself/

First time?

Liberals and conservatives are both right...about big banks

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If Obama and the Democrats are re-elected in November, look for 25% unemployment because Atlas will have shrugged.

Mr. President the business of America is Business NOT Government

by Dick McDonald

I take President Obama’s latest slam against small business people personally.  I was a small business man for 30 years and during that time I did over 2,000 private placements to raise the capital to feed several million cattle. During that time the only obstacle I faced was government.  If it wasn’t SEC compliance, it was tax law concerns. If it wasn’t agricultural department red tape it was slaughter house regulations.

I conducted this business as a tennis shoe cowboy in Encino CA with the help of 2 or 3 clerical help.  To tell me I had to thank my lucky stars for government’s help is pure Marxian propaganda on the part of Obama.  Government restricted and limited my capabilities and opportunities at every turn. I won’t thank government I will fight it in the future to limit its powers.

With the passage of the Sarbanes-Oxley and Dodd Frank legislation I couldn’t afford to do what I did for 30 years as it would cost me $200,000 to $400,000 for EACH private placement even before I attempted to get an investor.  No wonder start-ups have slowed and unemployment is sky rocketing; raising money for new ventures is limited to only the very wealthy who can afford the cost of these new regulations. Let’s face it, these regulations favor the very wealthy contrary to the BS Obama is selling the middle-class and poor people.

If Obama and the Democrats are re-elected in November, look for 25% unemployment because Atlas will have shrugged.

TEXAS COMMUNITY BANK, SENIORS AND FREE ENTERPRISE GROUPS FILE SUIT CHALLENGING DODD-FRANK

Hot Air:

With every fiber of my being, I detest the woefully-orchestrated, unbearably intrusive disaster of a legislative package that is the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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