H.R. 1728: The Death of Creative Financing

H.R. 1728 passed the House by an overwhelming majority in a record three days time. Now it’s in the Senate and is widely expected to pass quickly as well. Why the rush? Is AIG planning to hand out zillions in bonuses again?

My guess would be that our elected representatives and their banking benefactors would prefer that we don’t know anything about it.

Consider this scenario:

You own a house. You want to sell it.

Someone wants to buy it.

You decide to sell it to the person who wants to buy it and carry the paper yourself for whatever reason. Maybe you want the income instead of the cash. Maybe you’re just particularly fond of the buyer, I don’t know.

I’m sorry… you can’t. It’s illegal.

Huh? Excuse me. It’s my house… Why can’t I sell it to whomever I choose, however I choose.

Nope, sorry. You’ll have to become a “lender” and get a lender’s license.

Why? I’m not a lender.

Well, because you’re only allowed to sell your own house once every three years without going through the bank for a mortgage. And there are a lot more rules than that, believe it or not.

It has to be a 30-year, fully amortizing loan and you must comply with RESPA regulations, provide Truth in Lending documentation, and “verify” that the borrower is able to repay the loan, just like the banks don’t.

You can read the bill for yourself… I’m going to stop right here for a moment.

The moniker for the HR 1728 bill is the Mortgage Lending and Anti-Predatory Lending Act, so it sounds absolutely fabulous, doesn’t it? It sounds like something we’ve needed for a long time… a bill to stop “predatory lending”. Who could possibly be against that?

(Before I go on, I’d like to register my extreme displeasure at being treated like I’m four years old by our elected representatives. They obviously believe that I’ll be happy to eat cow pies if they’ll just call them Ding Dongs.)

Look, obviously this is an important piece of legislation. After all, just look at what caused this unstoppable catastrophic meltdown in the first place. If it weren’t for a bunch of individual homeowners selling their own homes to other people and carrying back the paper themselves we never would have gotten into this mess in the first place. Those sellers obviously have to be stopped.

There’s another clause in this bill that I found absolutely unbelievable. The bill says that if you own rental units and the government decides that you’re at risk of foreclosure, the government can seize your property… before you’re foreclosed on, mind you. Someone wakes up in the morning and decides that you might lose your units to foreclosure, and you are screwed.

You want time to go over that one again? It’s perfectly understandable if you do.

What it said was that the legislation makes it possible for the government to seize your rental units if they deem that you are at risk of losing the property to foreclosure. I assume the intent is to prevent renters from being put out of their rented homes, which is perfectly understandable because everyone knows that it’s only okay to put actual homeowners out of their homes.

Now, I know that usually I like to go into some level of detail on these types of things, but this time I’m keeping it short and sweet. A memo ought to do it…

Memo to the Members of the U.S. Politburo… I mean Senate:

Don’t even think about it. It’s none of your Goddamn business who I sell my house to, and if I want to get paid in marbles over 16 months with a 5,000 Twinkie balloon payment at the end of a year ending in 7, I don’t give a rat’s right foot what you guys in congress think about it. Want to know what else… get your lazy, self-important asses back to working on something that’s actually a problem, because we’ve got plenty of those and a big part of why we have plenty of those is that you guys can’t seem to stay focused on anything important for more than an hour or so. If you want to blow the banking lobby, do it on your own time… got it?

Now, back to the rest of us. Let’s get serious here. This is crap and we all know it. But the banking lobby is going to just keep throwing their heft around as they please until we put our collective foot on someone’s neck. I’m serious about this. If we don’t.. what’s next? You can’t sell more than one of your cars every eighteen months without becoming a car dealer, and providing floor mats?

People, we have HUGE problems that no one in our government has even come close to solving and this is what they’ve got time to work on? If we just sit back and say… “Oh well,” then we deserve everything we get in the future.

Remember AIG bonuses? We had congress jumping all over the place like they had ants in their pants over those bonuses. One week of pitchforks and torches and they were passing “90% Bonus Tax” legislation. Let’s flex our muscles on this piece of crap bill, and maybe after a time or two, our elected representatives will realize that we’re not playing around here.

Look… if you don’t agree, here’s what Sen. Barbara Boxer authored to add to a bill about a week or two ago:

A provision authored by Sen. Boxer requires homeowners to be alerted within thirty days if their lender sells or transfers their home mortgage loan. The measure would help homeowners whose efforts to avoid foreclosure have been complicated because they can’t find out who owns their mortgage. “Homeowners have the right to know who owns their mortgage,” said Sen. Boxer. “This measure will give homeowners another tool to fight unlawful foreclosures and renegotiate their loans so they can stay in their homes.”

Well… it’s about time. That’s exactly why my best friend lost his home… he couldn’t find out who owned his mortgage. It was soooo frustrating. They never even foreclosed. Finally, after missing five payments, he just gave up and moved out.

See what I mean. It’s out of Goddamn control over there. We have hundreds of bankrolled idiots running things in D.C. and they don’t even think there’s anything wrong.

Let’s let each of our respective senators know that if they even consider voting for this bill, we will all be actively campaigning against them Obama-style in their next election… no matter which party they’re attending.

Unemployment’s going through the roof, and we’ve had 1 million foreclosures since January 1, 2009. Fix that, you grandstanding morons. And leave my house alone. Don’t worry… the way things are going the bank will have it back soon enough.

And on a more serious note, in the years to come, seller financing will be the only way that hundreds of thousands of Americans can buy houses, so in terms of our eventual economic recovery, this bill can only hurt.

Here’s a link to the bill if you want to read it: http://www.govtrack.us/congress/billtext.xpd?bill=h111-1728

Let’s send each of our respective senators pairs of kneepads, and a map to the banks in their area. Seriously.

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