My E-mailed response to the AG of Oregon - Posted by Upset RE Investor

Posted by Joe Kaiser on December 17, 2003 at 23:09:22:

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My E-mailed response to the AG of Oregon - Posted by Upset RE Investor

Posted by Upset RE Investor on December 16, 2003 at 23:55:20:

Hardy,

The letter below is the actual letter I e-mailed to the AG of Oregon concerning his faulty letter posted on his website about real estate investors and the ability to obtain a new home loan.

Hardy,

The purpose of this letter is to highlight your false statements, incorrect accusations, and ask you some questions concerning your article/warning posted on November 26, 2003 titled “AG FILES AGREEMENTS WITH OPERATORS OF ‘DISTRESSED PROPERTY RESCUE SCHEMES’”. I am a real estate investor and mortgage broker who currently engages in said activity.

Your first bullet:

“A large percentage of these types of ?distressed property rescue schemes? appear directed towards vulnerable homeowners such as the suddenly unemployed, the elderly, couples in divorce proceedings and non-English speaking homeowners in financial straits,” Myers said.

Directed? Are the investors going door to door and forcing these distressed homeowners into something they don’t want to do? What about the homeowners that call the investors? Most of them run ads in a newspaper in the real estate section. These sections typically are placed before the personal ads for indivduals wanting to buy coins or stamps. If we used your analogy, we could say these money-hungry coin collectors who run ads in the newspaper would be acting deviously by targeting these such coin holders. How dare they!

Next, and this is one of your best comments:

If you are thinking about selling your home because of financial duress, consider options such as renting out the property yourself to make mortgage payments.
Remember that a company that offers to find a buyer for you won?t have any greater luck than you at the outset in disposing of the property and it may take a long time to find or qualify a new buyer.

This is amazing. Are you suggesting that a novice landlord would do just as good of job at finding tenants than an experienced landlord? Hopefully your letter won’t convince someone that just because their house is vacant they can now become successful landlords. Who do you think you would more than likely pay your mortgage payment: a professional renter that knows how long they have before they need to skip town and/or evicted or a professional real estate investor who has a vested interest in the property?

Your next comment:

Be careful; see an attorney or a licensed real estate professional if you are giving up control of your property but remaining liable on the mortgage loan.

The best part about this suggestion is that some of my customers will talk with a lawyer about my offer and they will tell them “absolutely not, don’t do it”. It’s funny how my solution to solve their problem isn’t a good one, but they themselves can’t offer any help with the exception of the “just don’t do it” response.

Then, after their lawyer doesn’t help them, their house goes into foreclosure. Now, they can’t buy another home for 2-3 years AND in some cases they owe the bank money b/c they owed $100,000 on their house and the bank could only sell it for $90,000 (and this happens all the time ). So, thanks to the lawyer telling them not to do it, they have a foreclosure on their credit and they are still in debt on a house they don’t know.

Your next statement:

Even though an arrangement may appear to avoid a default, you give up control over making sure mortgage payments and taxes are paid on time, which means there is still a potential for default and your credit could be decimated.

What happens to their credit if they don’t bring their mortgage current (to stop a foreclosure), or if they walk away from the property and simply stop paying all together? They already are in such financial straits when they come to me that if I take over their payments I would be SAVING their credit, NOT ruining it.

The next bullet:

There is a risk that the lender, particularly if interest rates are rising, will exercise a “due-on-sale clause” if the lender discovers that you no longer have a beneficial interest in the property and you are no longer living in the home.

If they walk away or stop making payments their house will go into foreclosure (which is what most consumers will do if we don’t help them) and they will have lost all rights to the property. Ergo, the “due-on-sale-clause” won’t matter a hill of beans to them b/c they won’t have an interest in the property anymore.

Your next statement:

Even if the seller avoids default, the seller may not be able to get credit since the seller still has a huge debt.

Now you have switched hats from real estate expert to mortgage broker. I don’t know which broker your staff called to verify your facts, but they obviously didn’t call one who knows anything about the mortgage business. Let me ask you a question Mr. Mortgage Man, what is easier to work around on a new purchase for a homeowner: a foreclosure a $600 house payment from another residence? Well, let me enlighten you, it is the $600 house payment. I have a handful of lenders that won’t even look at the property as a second mortgage payment unless you are trying to refinance that particual property. Simply put, the extra debt payment can be overlooked while a forclosure will never go unnoticed.

Simply put Hardy, the worst thing you can have on your credit report is a foreclosure. If someone comes along and offers a way out of your problems and sticks to his word, then they have saved that person a WORLD of grief. On the other hand, If the RE investors promises one thing and doesn’t deliver it, then yes, that would be something to make light of. I realize this is one of the purposes of your article, but unfortunately, there are more errors in your letter than there are facts.

Finally, I don’t know everything about politics, medicare, and social security, but the difference between us Hardy is that I don’t publish articles to the masses and boldface lie to them pretending I do. I suggest you heed the advice and seriously consider researching your facts before you post another errant letter. Please call me with any questions you might have; I can be reached at XXX-XXX-XXXX.

Sincerely,

my name…

Excellent! - Posted by William Bronchick

Posted by William Bronchick on December 17, 2003 at 20:10:43:

I emailed a similar statement to the editor of the Denver Post when they ran a whole series about how foreclosure investors where “scamming” little old ladies out of their properties. I corrected a half dozen statements he made about the law that were incorrect (for example, that a notary could not take an ackowledgement of a signature the day after it was made). Did he respond? Of course not!

Re: thats the spirit - Posted by mikeW

Posted by mikeW on December 17, 2003 at 08:54:16:

In this time where the average Joe believes everything the governement force feeds down their throats, its good to see citizens defending themselves and challanging the authorities.

“When governments fear the people, there is liberty. When the people fear the government, there is tyranny.”
-Thomas Jefferson