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Big Brother is watching you! bad legislation that will launch new

Well, it seems that everything you do well, there's always someone else to do evil, do do evil or illegally. Enter Big Brother … "Well intentioned" legislator who wants to be reelected by adopting a law that protects innocent bad people, or their own stupidity.

What should I talk? Several states have adopted or are about to pass a wave of laws that will be a real estate investor a very difficult vocation. While I understand the need for SOME government guidelines and disclosures to ensure that people make informed decisions and are protected against bad people, these laws are throwing out the baby with the bath water and is likely to cause financial damage to the property markets in these states.

What follows is a review of some recent laws and bills that are pending or have passed.

IT IS IMPORTANT that you read this even if you are not in those states. When it comes to laws like these, is "monkey see, money as a result of a domino effect. The state may be next, so be careful. Visit Site Status and pending the review of accounts. Form a local political action committee. Being involved in the political process. If located in one of these States, by phone, fax and e-mail your representatives. E-mail to all your friends and business associates. Stitches of State buildings. Contact local news people. If you remains silent, has no right to complain!
Texas – Senate Bill 629 – PAST

This bill is an amendment to a previous law adopted in 2001, which governs contracts for the supply of land. Current law requires such contracts "binding" and requires certain, most are not much. However, penalties for noncompliance are significant and unrelated to the alleged injury to consumers if the information would not follow. It is basically a windfall for buyers who find a good lawyer to build a technicality that most investors are unaware.

SB 629 must keep one step classification Lease / Options "executory contracts", like land contracts. This is vital for investors who want to maintain the tax property benefits when selling on lease / option and taking advantage of the capital gains rate. If Texas calls a lease / option contract binding, is a sale, which will have a negative fiscal impact on the seller, you can defer income through an exchange in 1031, when the tenant exercises purchase option.
And we've only just begun …

The bill also prohibits an investor sells a property lease / Option or land contract if the seller has an underlying loan property without written permission from the lender. In recent years, if any, investors have full ownership, it would effectively eliminate the process of buying a property, financing, then sell it on a lease / option agreement or land.

This is unfortunate because it hurts, not only investors but anyone who has a house to move. Builders often sell properties on a "lease-purchase" basis, and will now be forbidden to do so if there is underlying financing on the property. What if you have return a solution, but are not able to sell the sake of money? Perhaps the lease / option would be the solution for you to cover mortgage payments, while obtaining a sale? It will not be possible in Texas if this bill passes.

And what's worse!

SB 629 states that you can not sell a property under a performance contract, unless the title. This means that you can not make sandwich lease option in Texas – period.

The Bill also has a lot of information and regulations on lease / options, none of which are unacceptable.

North Carolina – Bill 725 – (still pending)

HB 725 is an impulse of the Attorney General of North Carolina office, which has been a burden for some investors against time. Attorney's Office said that "hundreds of complaints" people who have been hurt by investors who bought properties "subject to" mortgage exist, then by default. I find it very hard to believe that more than a few complaints were ever filed. The way the bill is written clear that they simply do not understand how these operations work.

This bill is directed against an investor who buys a property subject to a loan existing sells the property for lease / option or land to a consumer. The bill a certain amount of information to all parties involved, some of which are very good and some are silly and unnecessary.

Proposed law requires the seller receives the express written permission from your lender before a property transfer subject to an existing trust deed, never likely to occur. And even if it were possible, the time required for the seller to get permission from your lender, then is in foreclosure is not realistic. This will damage the seller is in foreclosure and research simply "dump" your property so you can get. If the investor can not cure the arrears of the seller and / or negotiate a short sale with the lender throughout the world, is happy. If a Seller has no options, he will walk the property and the bank will have another REO. Everyone loses.

Now, admittedly, some unscrupulous investors or silent actions taken from the vendors, has committed to pay, then by default, leaving the salesman with the short end key. The right thing is to require disclosure so the seller enters the face understanding risk. Adjustable rate mortgages are very dangerous, too, so RESPA requires information. The government did not explode at the end of lending act and outlaw ARM.

Curiously, the bill exempts real estate agents of the law, which means a licensed agent could theoretically Buy a property to an existing object write without the lender without the same information as a non-licensed investor may be compelled to give. The suspicious side of me thinks that real estate agents are also behind this bill, trying to corner the market for investing or requiring an agent to help with these offers if they can benefit.

And the laughter most of the bill aimed at people like me who need all the educational seminars include a copy of the new law in our material. I suppose that the drafters of this bill took no account of the First Amendment, which forbids the government to restrict the content of freedom of expression.

Click here to read the bill: Bill 725
MARYLAND – House Bill 1288 – (adopted)

HB 1288 addresses the implementation of an investor mortgage to meet sellers in foreclosure.

The bill has two types of activities, "Foreclosure Consulting" and "The purchase of foreclosure." A consultant is someone who apparently charges a fee for advising the owners and / or assistance to negotiate with your lender or get a new loan. A consultant should provide their services in writing and provide a right to cancel this agreement at any time. The consultant can not purchase the property from the owner, or one of its "associates" (undefined). The foreclosure of the buyer also must provide certain information writing, including a fee of ten days to cancel the contract. This means that you can not get an act without the owner's 10-day "cooling off period. This is not necessarily a bad idea, but it can prevent an owner to sell a beating in the last minute. No matter how long the foreclosure process, Most homeowners wait until the week before taking final action.

The last part of the block has a "delivery" ie, many of which remains the owner of the property under a lease, reserving the option to redeem the property the buyer at a later date. I do not like these types of transactions, since in general no, and sometimes they can be reclassified by the courts as a disguise loans. In addition, many homeowners facing foreclosure have no other way to save their property, and a free market should be allowed to participate in a transaction that allows them to try to save his house on the basis of informed decisions, smart. This legislation would require the investor to give the owner 82% of the proceeds from the sale when the owner can not redeem the property, which is impossible for any investor what even bother to try to help the owner. In short, this law would have done more harm of what owners are supposed to protect.

The 22 pages of requirements are very technical, so it should be reviewed in detail with a local attorney. The project House Bill 1288 – Full text PDF
COLORADO – LAW 06-071 of the Senate – (Approved)

The project is promoted by the Attorney General of Colorado and the Association Colorado Public Trustee (Colorado eviction process involves a public official, the county Public Trustee). This bill is a watered down version of Maryland bill, which also regulate "foreclosure consultants" and "equity purchasers."

Through efforts lobbying, we have gained the ear of the Office for good amendments to the bill that should lead to an important piece of legislation. As the The draft law of Maryland, Colorado The bill prohibits a consultant "or one of its partners to buy a property in foreclosure from the owner. The bill, as amended, defines better than a "consultant" to not confuse a person with a buyer "who will buy the property and not to provide Owner "tips for the money." The bill is still under discussion and we hope to clarify some delivery "provisions to be fair to investors and protect homeowners from predators.

Draft bill also adds penalties for violation of the law, which no doubt is frightening for the average investor does not understand how to comply. If you expect a seminar Colorado this summer to explain every nuance!
ILLINOIS – Bill Senate 2349 – (still in committee)

Illinois law is similar to Maryland law, but should pass a category. The bill would also apply to property "in danger", ie owners who are 90 days late, but he did not eviction. This is very dangerous because you do not need a deposit until the public began foreclosure proceedings, so there is no way of knowing who to blame! On the other hand, Bill would require Illinois to an investor to pay taxes of the seller prior to delivery of a foreclosure, that is, it does not take property under the loan existing and sell it on a lease / option. However, not allowed to take the items for sale and third.

The bill also contains Illinois "82% of the seller" provision, which effectively kills any intelligent investor to participate. Why buy a property and the risk of default owner, bankruptcy and take you to court more than 18% of gross profit? On the other hand, I see the argument that is manifestly unfair to owners of losing a property with a 50% interest for nonpayment of rent for a month, but these cases are rare. In any case, the court always has the power to call a fair contract of "inconceivable" when deemed necessary. The use of an arbitrary number by 82% can be possible only when the local real economy is in the bathroom and banks are selling properties at 60% of the value or less.

In short, the government should let the free market open to people who want to bid do, punish those who take unfair advantage, and to require mandatory disclosure so people can make choices.
CONCLUSION

I have mixed feelings about these new bills … first, are the answers rash side effects of a strong housing market, discouraging investors from getting involved operations and resulting in several properties to the bank.

Moreover, some of these bills of safety zones "for investors who follow the letter of the law. As there are very few laws that relate to "creative" real estate investment, the procedures for making a dispute between a seller or unhappy tenant or buyer more difficult. Hard to say, "do not show X, Y and Z", when in fact the law states that "A, B and C.

If these investors States Make Some Noise by contacting their state representatives immediately, a modified version of these projects can go Bill, everyone's happy. And if something happens in their own state, be involved in the process before a bad law that postpones company.

I recommend the following:

1. Getting involved early in the process. Discover pushing the draft law in your state, and why. Contact these groups and offer to assist in the process legislature to discuss the practical effects of these laws and other alternatives.

2. Get other groups involved in the process. Community leaders, such as associations real estate investors, business associations, mortgage brokers title, real estate commissions, etc. Remember that banks do not want the execution a mortgage on your inventory, so they need to bail out investors before the sale properties.

3. Talk to your local representatives. Legislators state are generally accessible by phone, fax, and even their offices. Let them know that you are a voter in your precinct who has concerns.

4. Speaking with the press. The media are pushing stories about how people in foreclosure are losing their homes, but there are two sides to every story. Talk local newspapers, radio and television personalities. Write letters to the editor of his newspaper (click here for a good example).

5. Hire a group pressure. The best way to access to legislators is the good old way – money. Pressure groups (also known as "public relations experts) have links with several legislators and you can get an audience to listen to your questions. Can see it's pros and cons of particular issues that can be modified or "kill" a bill introduced. Nationally, officials of the National Association Rebuilders and Investors (Www.NARHRI.org) was active in about 8 states.

Click Click here for more details Grande New Brother watching bad legislation coming your way

About the Author

Written exclusively for Legalwiz.com by Attorney William Bronchick, Certified Registered Nationally-known attorney, Author, Entrepreneur and Speaker.

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