New Dodd Frank amendment


#1

So, with the amendment of the Dodd Frank bill passing now, it sounds like we are able to suggest a local bank or other loan options with customers but does anyone interpret the language for park owners to be able to set up loans to sell their inventory to a potential buyer?

Ken Lavoie


#2

I am eager for an answer to this as well please.


#3

@RishelConsultingGroup Any comments ?

I haven’t researched this much other than skimming a couple of articles.


#4

Does anyone have a link directly to the new bill? I have only found articles describing it.

Anyone know the actual bill name?

Edit - it is called the Crapo bill or S.2155 - Economic Growth, Regulatory Relief, and Consumer Protection Act.

Specifically section 107:

SEC. 107. PROTECTING ACCESS TO MANUFACTURED HOMES.
Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended—

(1) by redesignating the second subsection (cc) (relating to definitions relating to mortgage origination and residential mortgage loans) and subsection (dd) as subsections (dd) and (ee), respectively; and

(2) in paragraph (2) of subsection (dd), as so redesignated, by striking subparagraph © and inserting the following:

“© does not include any person who is—

“(i) not otherwise described in subparagraph (A) or (B) and who performs purely administrative or clerical tasks on behalf of a person who is described in any such subparagraph; or

“(ii) a retailer of manufactured or modular homes or an employee of the retailer if the retailer or employee, as applicable—

“(I) does not receive compensation or gain for engaging in activities described in subparagraph (A) that is in excess of any compensation or gain received in a comparable cash transaction;

“(II) discloses to the consumer—

“(aa) in writing any corporate affiliation with any creditor; and

“(bb) if the retailer has a corporate affiliation with any creditor, at least 1 unaffiliated creditor; and

“(III) does not directly negotiate with the consumer or lender on loan terms (including rates, fees, and other costs).”.


#5

Thanks Toben,
That’s quite the mouthful.

It looks like this amendment was designed to shield mobile home dealerships from licensing liability from helping consumers obtain outside financing. Unfortunately it doesn’t look like dealers offering seller financing will get much additional protection from this amendment, but I would love to be wrong on that.


#6

There may be more to it, I was searching for “manufactured” as in manufactured homes.

If anyone wants to read the rest of it, there may be other modifications related to mobile homes and parks. It is very long.


#7

Also left out Sec 3 - High-Cost Mortgage Definition, which also works in our favor. If you’re a licensed “retailer”, my read is that you’re now excluded from the definition assuming you don’t trip “compensation” issues, which is a bit unclear, but my guess is refers to usurious origination fees, etc, that we wouldn’t care about anyway. I’m curious to hear @frankrolfe view on this vs. rent credit or rent to own, and the pros/cons looking forward now. In a default scenario you’re dealing with a foreclosure process vs. a straight eviction which is more cumbersome, time consuming, and expensive. Nice to no longer have to deal with property taxes or insurance, but the reality is those costs can be baked into rent credit anyway.

SEC. 3. HIGH-COST MORTGAGE DEFINITION.

Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended—

(1) by redesignating subsection (aa) (relating to disclosure of greater amount or percentage), as so designated by section 1100A of the Consumer Financial Protection Act of 2010, as subsection (bb);

(2) by redesignating subsection (bb) (relating to high-cost mortgages), as so designated by section 1100A of the Consumer Financial Protection Act of 2010, as subsection (aa), and moving such subsection to immediately follow subsection (z); and

(3) in subsection (aa)(1)(A), as so redesignated—

(A) in clause (i)(I), by striking “(8.5 percentage points, if the dwelling is personal property and the transaction is for less than $50,000)” and inserting “(10 percentage points if the dwelling is personal property or is a transaction that does not include the purchase of real property on which a dwelling is to be placed, and the transaction is for less than $75,000 (as such amount is adjusted by the Bureau to reflect the change in the Consumer Price Index))”; and

(B) in clause (ii)—

(i) in subclause (I), by striking “or” at the end; and

(ii) by adding at the end the following:

“(III) notwithstanding subclauses (I) and (II), in the case of a transaction for less than $75,000 (as such amount is adjusted by the Bureau to reflect the change in the Consumer Price Index) in which the dwelling is personal property (or is a consumer credit transaction that does not include the purchase of real property on which a dwelling is to be placed) the greater of 5 percent of the total transaction amount or $3,000 (as such amount is adjusted by the Bureau to reflect the change in the Consumer Price Index); or”.


#8

Any idea what this actually means? Can we sell homes up to $75K without being a dealer or complying with all of Dodd Frank?


#9

Does anybody know yet (ref. Dodd Frank reform)? I sell a park with a decent down and owner financing (mortgage deed). Buyer fails to preform. How long to recover control of my property. Let a lot of deals walk because I don’t want a smoldering pile of rubble and a bunch of accrued debt 2+ years later. Courts treated recoarse of these deals near same as residential under orig. D.F. Amendment.


#10

don’t worry Jake I think you can keep washing and repeating while keeping your property. In fact, you can turn them faster. Its good news brah.


#11

To answer some of the earlier questions and in most instances, mobile home financing will now fall under FHA with an attractive minimum of 3.5% down. FHA loans are backed by the government so definitely this amendment should help with being able to secure relatively lower mortgage rates than prior. The originator of these type of loans, “MLO”, Mortgage loan officers must have a registered NMLS number to originate these loans to consumers via a bank or broker channels.

To the best of my knowledge, dealers offering seller financing will most likely continue to offer their programs.