Every seller financing transaction signed after 1/10/14 needs to be in compliance with the Dodd-Frank Act to protect yourself and your company.
Screening Buyers ? There are easy and simple ways to comply by assembling pertinent information for each lease purchase tenant. There are companies that can help you the investor with seller financing with tenant/buyer screening. Real estate investors dealing with lease option deals, rentals, and all seller financing options need a trustworthy, inexpensive service for their screening needs.
Screening Buyers all investors need:
1- Verification of Income
2- Credit Report
3- Credit Analysis
4- Debt-to-Income evaluation
5- Background Check
6- Megan’s Law Check/National Sex Offender Search
Finding a service the investor can use that is turn-key, secure, and price conscious were our priorities in our research. Many services exist that can be used but one stood out more than other, Screen The Tenant (http://www.screenthetenant.com).
Screen The Tenant, Screening Buyers offers:
Verification of Income – They will contact your buyer and obtain a copy of their paystubs, W-2’s and/or income tax return. A validated “true and correct” copy will be provided with your completed package.
Credit Report – Report with detail (not simply summary). This item is not for resale or distribution and will not be provided to their clients.
Credit Analysis – A credit specialist will examine the buyer’s credit report. Suggestions will be made to assist in improving the client’s credit profile.
Debt-to-Income Evaluation – After receiving the buyers verification of income and credit report, they will provide a debt-to-income evaluation by using their DTI software which includes underwriting guidelines to today’s popular loans. A printout will be added to your package. They suggest you have this signed by the tenant/buyer with any other seller financing contract.
Background Check – The background check you will receive, if available, provides additional personal information about the buyer, any criminal records or possible matches to the buyer, possible relatives of the buyer, possible associates and professional contact information. It will also contain information on any Bankruptcies, judgments, and liens in the buyer’s name.
Megan’s Law Check/National Sex Offender Search– All results received even if the search results are zero will be in your Dodd-Frank package.
Mortgage MatchTM (optional) – Every loan request has its unique set of circumstances. They have a network of knowledgeable mortgage bankers and brokers who offer specialty products and services tailored for a tenant buyer transaction. They will place your buyer with the right prescreened lender after they get them ready and work with them until cashed out. If a mortgage lender runs a credit report while the buyer is engaged in credit restoration “item in dispute” will appear on the credit report disqualifying the loan application. They will coordinate running of the credit report with the mortgage professional to ensure this does not occur. The fee is $500, payable at closing and will be a HUD1 line item.
The steps to complete the process are 1) Complete the application at www.screenthetenant.com 2) inform the buyer we will be contacting him/her to obtain their income documentation and credit report. After receipt of their Income, Credit Report and your payment is processed your Dodd-Frank Assistance Package will be sent to you within 24 hours by email.
Screenthetenant.com provides the quality services that real estate investors need.