S.A.F.E Act Changes In Kentucky

　
BIG NEWS IN KENTUCKY!!! The Kentucky Department of Financinal Institutions 　("DFI") has announced　that the Secure And Fair Enforecement for Mortgage Licensing Act (a/k/a the S.A.F.E. Act) does NOT apply to INVESTOR BUYERS! 　

This is a new interpretation of the SAFE Act in Kentucky.　　In the past, we were told that Investor Buyers were not allowed to purchase with Private Financing or Seller Financing unless 1) the lender (seller or private lender) was licensed in Kentucky as a loan officer; 2) the lender was an owner occupant of the property being sold and financed at the time of the sale; OR 3) the lender was closely related to the Buyer.　

The definition of a "mortgage loan" in the SAFE Act refers to a loan given primarily for "personal, family or household use." 　However, the Kentucky DFI originally did not recognize "investor buyers" as exempt under the Kentucky SAFE Act. 　That has now changed.　 Even though the law hasn't changed, the DFI's interpretation of the law has.　

Therefore, effective immediately, Investor Buyers are able to obtain seller financing or private financing without the lender being a licensed loan officer, an owner occupant seller or a close relative.

The intent of the SAFE Act was to protect "consumers" (defined as　someone purchasing for personal, family or household use).　In our opinion,　Kentucky's DFI correctly exempts investors because they don't fit this definition.　

We have been pushing for this answer from Kentucky's DFI for nearly a year now. 　And finally, we have what we wanted.


Hopefully, in the future there will be an exemption that allows private lenders or sellers to give up to 3 or so　loans in a 12 month period, but that literally is going to require "an Act of Congress." 　But it does appear that Congress is moving in that direction.
From: Borders & Borders Attorneys

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