Legal: Seller-Financing Restrictions Under The Dodd-Frank Act

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The Dodd-Frank Wall Street Reform and Consumer Protection Act created the Consumer Financial Protection Bureau (“CFPB”), and with other laws, has expanded previous regulations concerning the licensing, training, screening, and compensation practices of loan originators, mortgage brokers, bank officers, and lenders in general, in consumer loan transactions.

On January 10, 2014, the Loan Originator Rule came into effect to implement the new Dodd-Frank requirements. This Rule was expanded to include certain restrictions on seller-financing in residential real estate transactions where the dwelling is secured by a mortgage, unless the seller is entitled to certain exclusions.[source]

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