What Will Happen To MAPS / AMPS IF New Regulations Takes Effect?


The Federal Reserve, which received sweeping new authority under the Obama regulatory re-authorization, wants to effectively eliminate seller-held (a.k.a. purchase money) mortgages. It will do this by enacting a rule for the Dodd-Frank Act prohibiting property sellers from taking back a mortgage unless the buyer essentially can qualify for conventional financing!

What’s more, Ma and Pa Homeowner, who create 95% of seller-held mortgages, won’t be able to qualify buyers under the same underwriting standards that banks are required to perform, and therefore the cash flow notes won’t be created.

If this is enacted it also will remove access to housing for millions of Americans, because seller “financing” is the only way people who can’t qualify for conventional loans can buy a house.

Moreover, it would allow a buyer a three year right of rescission (they can cancel the sale) if the seller did not properly qualify them. The right of rescission also applies to anyone who buys the note.

For additional information regarding the proposed rule please visit: http://www.gpo.gov/fdsys/pkg/FR-2011-05-11/pdf/2011-9766.pdf – This is a link to the Proposed Rule

http://www.federalreserve.gov/newsevents/press/bcreg/20110419a.htm – Original Press Release from the Federal Reserve Board for Governors


4 thoughts on “What Will Happen To MAPS / AMPS IF New Regulations Takes Effect?

  1. Sue

    I am disgusted by our government…they need to keep their noses out of the people’s business. Do they have nothing else to do but sit around and try to figure out what they can do to make life more difficult for the people of this country. How in the world can Obama get the authority to do all the things he’s doing by executive order? Why is he not being “checked” & “balanced” by the legislature?

  2. Robert Kim

    This is not good. If not able to seller finance, lotsa people gonna get stuck with properties that they don’t want or that they can’t sell. If this passes, it’s another example of the short-sightedness of our government leaders.

  3. Clifton E

    Thank you for the information Duncan! But WHAT can WE THE PEOPLE do about it? Please leave some links or instructions on HOW to fight this TOTALLY ABSURD move by our Gov. Officials whose salary WE THE PEOPLE are –FORCED– to pay…

    Thank you.

  4. Jim McFadzean

    Unfortunately as is the way with our country we look to pass blame. However the blame should not go to ma and pa homeseller who wants to create seller financing so they can move on, retire, or whatever, the blame should go to the major banks who knew all along that they were creating a toxic mess with all of their derivatives and the like.

    Investors can help the economy more than anybody, however they want to paint the picture that the investor is the dirty bird in this scenario, and for that I am sooo disgusted.


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