Why? The National Real Estate Investors Association (National REIA) informed our local Triad REIA of some upcoming legislation that could be harmful to our business practices as well as to property owners across the country.
What we found out right away that amazed me is how available and open most of our legislators are to hearing from their constituents. Did you know that, with an appointment, you can see almost any of your local House Representatives or Senators? Possibly more difficult in Washington, D.C. than while they are at home in your state but, even then, if they don't have the time to speak with your personally, you can make appointments to meet with their aides.
Did you know that a representative may change their vote after hearing from as few as only two of their constituents? They, for the most part, do represent you and want to hear from you, it's just that so few of us ever express our needs and/or concerns to them directly.
So, we did. First, we met with a number of National REIA members in D.C. Because we had registered ahead of time, National REIA had scheduled appointments for us to meet with the legislators from our home states and, where possible, our own districts. National REIA members from approximately 12 different states attended, 10 members were there from North Carolina alone.
Here's the problem we went to address; HR 4173, the Wall Street Reform and Consumer Protection Act. Nice name. Consumer protection is certainly popular. But does it really protect the people it intends to?
The Senate companion bill is the Restoring American Financial Stability Act of 2010. Again, sounds great.
Now, try reading the bills. Thousands of pages, literally.
It appears that the main reason for this legislation is to regulate Wall Street and the mortgage industry from unscrupulous lending practices that have hurt the public. If you don't read the entire bill and don't read deeply, you can, mistakenly, believe that is all that is covered. But, a lot of extras are often added into bills and we all need to pay attention to ensure that our rights are, in fact, being protected.
What concerns us with these bills is that we are all caught in one big net directed at mortgage regulation. You, me, your parents, your grandparents, everyone would, upon passage of this legislation, be required to become licensed mortgage lenders if we decide to sell, through owner financing, any property we own. Suddenly, if your parents own a property free and clear and decide to let you buy it from them with monthly payments, they would need licensing as mortgage lenders and you would have to qualify for the loan just like through any other lender.
Many properties, such as mobile homes or land, don't qualify for bank financing but would now have to. Why? Because purchasing from individuals by using a note would no longer be legal. Many of today's buyers can't qualify for a traditional mortgage and count on seller's financing. This would no longer be an option.
Congressman Howard Coble immediately termed this "over-regulation" and we agree. What we need is a Senator (or multiple Senators) to stand up and confront this problem in the bill. What we discovered is that most legislators don't know everything in a bill if they weren't the ones who wrote it. Apparently, even the ones who sign off on the bills don't know everything in them because much can be added to a bill once it goes to committee.
Hence, our need to read and "inform" our representatives. Everyone we talked with about this bill seemed genuinely concerned and a bit alarmed at the harm this one section could do to the general population, the "mom's and pop's" out there who may have paid off some rental properties for their retirement and now, with the new laws, would no longer be able to sell with owner finance securing themselves income during retirement. Consensus was that this could not have been the original intention of this bill. Most termed the situation an "unintended consequence".
So now we follow-up with our legislators through emails, letters and personal appointments when they're back in our home states. The bill, as written, has already passed the House and will soon be voted on by the Senate.
It was very empowering to take a part in the system and learn that we actually do have a say and we can be heard. How this bill turns out will be worth paying attention to by all of us.
Keep up with what we learn about this legislation going forward at Karen's Perspective.
Sequel Alert: Thank you to everyone for the fabulous comments. They are so well said and so varied that I wish you would repost them on my blog Karen's Perspective. Out of fear and, no doubt, reality that few of you will.. I'm going to do another blog post that is just comments to the post. This legislation is huge and I want my blog readers to know that many of us are concerned for and passionate about what's happening in/with/to our government.
Thank you all.